Are banks' in-house recruitment functions really full of failed headhunters?

Now that banks have been recruiting again, recruitment fees have returned as a major issue.

Some banks have turned to Recruitment Process Outsourcing to help fill middle and back office roles and keep fees down. Others, or are building, teams of in-house headhunters to compress fees further.

UBS is understood to have a team of in-house headhunters, for example; RBS is said to use in-house search consultants to fill senior back office roles.

Proper headhunters are highly scathing of these in-house cousins. "They don't even have business cards," says one. "I was once taken out for lunch and invited to join a bank's in-house recruiting team. I pointed out that they'd need to pay me as much as their head of HR," he claims.

Shaun Springer, the former chief executive of search firm Napier Scott, turned owner of Square Mile Services, says he's received multiple offers to join banks in a senior recruitment capacity, but has passed on them all.

"Most headhunters go into HR because they couldn't hack it in headhunting. A good headhunter will make multiples of what an HR person can make," says Springer. "All the rules and regulations surrounding HR would be an anathema to most headhunters. It's worst than being a traffic warden," he adds.

However, banks' heads of recruitment say they're very happy with the performance of their in-house headhunting teams.

"We're saving tons," says one. "The fees we'd pay on two senior hires from an external headhunter, cover the pay for our entire in-house team for a year."

"They're not really headhunting," says another. "We ask our senior bankers and line managers to make the initial calls, and the in-house recruiters follow-up and deal with the admin."