Article by Christian Obenaus

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Recruiting vs. headhunting: What is the difference and when is each approach worthwhile?

When companies are looking for new employees, two terms often come up: recruiting and headhunting. Although they may seem similar at first glance, there are clear differences in how they work, their objectives and their benefits for companies. While recruiting usually targets candidates who are actively seeking employment through traditional channels, headhunting focuses on directly approaching passive talent. In this article, you will learn which method is suitable in which situation – especially in the financial sector. We also highlight typical application scenarios, advantages and challenges, and provide decision-making aids for HR managers.

CONTENT

Short answer: Recruiting targets candidates who are actively seeking employment, while headhunting targets passive talent. The appropriate approach depends heavily on the position and market situation.

Brief overview: Recruiting vs. headhunting

Criteria

Recruiting

Headhunting

target group

active seekers

passive talents

approach

reactive

proactive (targeted direct approach)

typical positions

HR, assistance, administration

CFO, Head of Controlling, M&A

confidentiality

low

high (confidential processes)

area of application

broad recruitment, high number of applicants

key positions, tight markets

Definition: What recruiters do?

Focus on active candidates

Recruiters are primarily responsible for organising and handling the entire application process.

Typical tasks of recruiters:

  • Consultation with departments regarding job requirements

  • Creation and publication of job advertisements

  • Screening of applications

  • Conducting initial interviews

  • Support during selection processes

  • Coordination of contract offers

Advantages of recruiting compared to headhunting

  • Efficient for roles with a high number of applicants

  • Faste time-to-hire for standard positions

  • Lower costs compared to headhunting

Challenges of recruiting compared to headhunting:

  • Limited reach among passive candidates

  • Less suitable for specialists or executives

Use case: Ideal for standardised roles with a high volume of applicants.

Recruiters act reactively, i.e. they process applications that are received after a job advertisement has been published. This approach is particularly efficient for positions with a broad candidate market (e.g. assistants, HR, clerical staff).

Definition: What headhunters do?

Specialists in discreet direct approach

Headhunters take a completely different approach: they contact specifically selected candidates, often those who are not actively looking for a new position but would be willing to change jobs in principle. Headhunters identify suitable personalities, conduct confidential preliminary interviews and coordinate discreet change processes.

Typical tasks of headhunters:

  • Analysis of the vacant key positions

  • Creation of a targeted search profile

  • Identification of talent (targeting)

  • Direct approach (by telephone, via networks, in person)

  • Confidential preliminary discussions and pre-selection

  • Advising the client on selection and contract negotiations

Advantages of directly contacting passive talents:

  • Access to an exclusive pool of candidates

  • Discreet recruitment for sensitive positions

  • Strategic advice throughout the entire process

Challenges compared to recruiting:

  • Associated with external costs

Use: Ideal for leadership roles, sensitive succession situations or competitive industries.

Headhunting is particularly in demand when leadership positions in the financial sector (CFO, Head of Controlling, M&A Lead, etc.) need to be filled, as there is often a certain time pressure, discretion is required, or the competitive environment is intense.

Which model is right in your situation?

Whether recruiting or headhunting is the better choice depends heavily on the position to be filled, the target group and the market situation.

Recruiting is ideal when:

  • similar positions need to be filled regularly (e.g. assistants, HR generalists).

  • the company has greater visibility on the job market.

  • a standardised recruitment process is desired.

Recruiters often take on process support tasks, particularly in medium-sized companies and internal HR departments, for example during periods of growth or when there is a high demand to fill new roles.

Headhunting is the right model if:

  • the position should not be advertised publicly.

  • the position involves a key person within the company.

  • experience in leadership roles is necessary.

  • specific industry knowledge or sensitive circumstances (e.g. succession, turnaround) are involved.

  • the market is narrow or highly competitive (e.g. CFO roles, private equity finance, treasury experts).

In the field of finance and controlling in particular, headhunting is often the best way to identify suitable candidates who are not actively looking for a job but would be willing to change positions.

FAQ: Frequently asked questions about the difference between recruiting and headhunting

Recruiting vs. headhunting: what is the main difference? 

Recruiters act reactively via job advertisements, while headhunters specifically target passive talent directly.

When do I need a headhunter? 

For key roles, discretion, a tight market situation or when there is a lack of active job seekers.

How much does a headhunter cost? 

The costs depend heavily on the position, the market situation and the effort involved in the search. Typical headhunting fees amount to 25-33% of the gross annual salary.

How much does Schulmeister's headhunting service cost? 

Thanks to our clear specialisation in the financial sector, our efficient processes and our direct access to relevant candidates, we can offer our headhunting service at a lower price than traditional headhunters. However, as each vacancy is unique, we cannot quote a flat rate. The best thing to do is to send us a non-binding enquiry – we will then give you a concrete estimate of the effort and cost involved.

SUBMIT NON-BINDING ENQUIRY NOW

Are there any models that combine recruiting and headhunting? 

Yes, many recruitment consultancies – including us – offer hybrid approaches combining recruitment and headhunting. This allows the most suitable search method to be selected depending on the position.

How long does it take to fill a position through headhunting? 

The time it takes to fill a vacant position depends heavily on the position itself, the market situation and the availability of suitable candidates. Depending on the role, it usually takes between 6 and 12 weeks. For highly specialised positions, it can take longer.

How long does it take to fill a position through headhunting with Schulmeister? 

While some vacancies, such as accountants, can be successfully filled within a few weeks, highly specialised or particularly sensitive roles, such as CFO or Head of Controlling, usually require more time. Quality, discretion and the right fit are always our top priorities. Once we have provided more detailed information about the vacancy, we can give an approximate estimate of how long it will take to fill the position.

Recruiting or headhunting – what role do recruitment consultancies play?

Recruitment consultancies often operate at the interface between traditional recruiting and targeted headhunting. They often combine elements from both worlds. While headhunters specifically approach suitable candidates for individual vacancies, recruitment consultants usually work on a longer-term basis: they build networks, already know many talented individuals personally and assess their suitability even without a current job vacancy.

For complex or difficult-to-fill positions, they also take on the task of directly approaching candidates – similar to a headhunter. This makes it clear that recruiting and headhunting are not mutually exclusive, but rather complement each other in a meaningful way.

Conclusion: Both models have their merits – depending on the objective.

The terms recruiting and headhunting are often used interchangeably, but they fulfil different functions in the hiring process. While recruiters oversee broad search processes, headhunters focus on targeting suitable candidates for specific positions.

In practice, this means that for positions with many applicants and a standardised hiring process, traditional recruiting is often sufficient. For exclusive or hard-to-fill positions where discretion, targeted direct approach and access to passive candidates are crucial, headhunting is often the more appropriate approach.

Top-Talente im Finanzbereich finden!

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As a recruitment consultancy specialising in the financial sector, we understand the requirements of CFOs, finance managers and HR managers. We help you attract suitable candidates – discreetly, purposefully and individually.

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