Hiring_Best_Practices_body.jpgby Iris Dorbian.

As CEO of Steinreich Communications, an 11-year-old PR firm in Fort Lee, New Jersey, Stan Steinreich often works with headhunters. Usually they are tapped to help him fill top-level spots at his firm, such as media relations professionals or department heads. For the most part, this hiring strategy has worked out well for Steinreich although he does offer a few words of caution to small business owners:

"Use headhunters for very specialized or targeted searches," he says. "When they're selected in that context, they can be very valuable and really add an expertise to those different situations."

Yet not all extol the use of headhunters for small business hires. Tom Armour, co-founder of High Return Selection, a consulting firm that helps small to medium-sized businesses attract and retain talent, feels that headhunters have become largely antiquated thanks to professional social networks such as LinkedIn.

“Fifteen years ago before social media, you needed a headhunter to access a network,” he says. “Now with LinkedIn, that network of accountants is totally searchable.”

How then can a small business owner determine if it’s worth the time and money to retain a headhunter? Here are a few tips to consider before bringing on a recruiter.

Communicate expectations clearly
When meeting with a recruiter to discuss a possible working arrangement, be clear. State specifically what you are looking for in a job candidate as well as your expectations for the agency.

Elisa Sheftic, president and managing partner of The Right Executive Search, a four-year-old, search firm, concurs. Early on, she says, there needs to be “a conversation that defines expectations on both sides.”

She continues: The client needs to know: How long will it take to receive viable candidates? How do you source and screen candidates? What is the fee structure? What is the guarantee period? Do you do a background check or drug testing?

“[Similarly], the agency needs to know the skill requirements for the position and the compensation parameters. What is the interview process? How long will the interview process take? What is the process for submitting candidates? Will there be feedback in regard to each candidate so the agency can tweak the search if need be?”

Once all these questions have been answered, get it in writing. A contract, signed by both parties before the search begins, ensures that each side is clear on what to expect from the other.

“[A small business] should not work with any agency who cannot clearly define their process verbally and on paper,” insists Sheftic.

Consider the expense
Before signing on with a headhunter, determine if you can afford it. Recruiters usually get paid one of two ways: either upfront on a retainer basis, or on a contingency basis, which means after the client has hired one of their candidates. For the latter, the headhunter often takes a certain percentage of the hire's salary as well as any related cash bonuses.

Armour says the cost for a contingency search “typically ranges from 15 percent to 25 percent depending on the person they hire.” For a position that pays $100,000 a year, that fee can amount to anywhere from $15,000 to $25,000. Although some small businesses can afford it, that sum may be too steep for many.

Don't rush the interview process
Once a headhunter begins sending over viable candidates, be sure to do your part. That means taking an appropriate amount of time to meet with and evaluate each person. It’s a smart idea to bring other people into the process as well.

Steinreich says at his firm, job candidates, even those interviewing for junior-level spots, always meet with three or four people first before getting hired. The team will then discuss the strengths and weaknesses of each candidate—a committee approach that Steinreich maintains is essential to the vetting process.

Further, Steinreich says he will meet with job candidates during the first round of interviews as opposed to later on. The reason is simple: “I don't like being in a situation in which my team members have invested a lot of time in looking for somebody and that person gets to me and I say [to myself], ‘Oh my goodness. What were they thinking?'”

Trust the headhunter’s judgment—and yours
Hire a recruiter who either specializes in your industry or has a keen understanding of the nuances of the job you want to fill. Because they’re familiar with the kind of business you have, their recommendations of candidates should be trusted.


“A headhunter saves us a lot of time because they know who's out there and who's available,” explains Steinreich. “By the time we get those couple of candidates to come and see us, they are all fairly qualified. We know that in advance. It actually is very cost-efficient in that situation for us to go with a recruiter.”

In addition to trusting your recruiter's judgment, you should also trust yours. If you have a question about a candidate being the right fit for your business, ask him or her about it during the interview. In addition, do your own due diligence. Search engines such as Google or other social media can be used to verify an applicant's credentials.

The hiring process is never easy and a recruiter—when chosen wisely—can be a tremendous asset. Taking the time to be as selective with a headhunter as you are with a job candidate is smart business and can prevent costly hiring mistakes.