The Headhunter Blues

After years of relative calm, the overheating labor market for high-potential talent is giving headhunters cause for concern. In certain sectors hit by shortages, candidates are even beginning to dictate the terms.

After the rogue bosses, here come the hooligan candidates. In the fast-food industry, nearly half of the (young) executives contacted by this recruitment firm no longer even bother to give notice before canceling an appointment. Elsewhere, it is the corporate hierarchy that is lamenting: middle managers no longer hesitate to brandish resignation letters and signed job offers to drive up the bidding.

« It is a regular occurrence. They give their original company a chance to match the offer, in exchange for a raise. But be careful, as management does not take kindly to being held to ransom., notes Wilhelm Laligant, MD of Advancers Executive, a subsidiary of Vedior Groupe. This headhunter is feeling the blues: the high-potential candidates he pursues with such persistence for months on end show a frustrating tendency to slip through his fingers at the very last moment… Or to vanish without a trace once they have finalized negotiations behind his back.

One scenario, in particular, haunts his nightmares: a new hire failing to show up on their first day. « It happened to me this year. It was a close call, and the matter nearly ended up in court., says Henri Micheron, MD of Quadra. In the discreet world of executive search, such anecdotes are rarely discussed. Yet, everyone has one or two to tell: by a rough estimate, about 10% of placed candidates fall into this category « volatile », dreaded by both recruitment experts and their clients alike. Candidates whose overconfidence borders on insolence. But this hunter’s blues may only be just beginning…

Anticipatory Boom

Young professionals indeed have good reason to be confident. With the job market on the rise, there is particular demand for those with 3 to 6 years of experience. « Because they are rare », explains Antoine Morgaut, MD of Robert Walters. « In the banking sector, these are executives who entered the market in the midst of a crisis. Those who were able to carve out a niche and gain experience are now prime targets. Add a technical specialization and fluent English to the mix, and you’ll have the ultimate professional profile.

The same phenomenon is occurring in the IT sector, where the severe restrictions of the year 2000 have vanished. Here, too, veterans of the silicon era are being aggressively recruited. This is because growth appears to be here to stay. Furthermore, companies are realizing that their cautious approach to hiring over the last five years could prove costly, provided that order books begin to swell. In short, « it’s the Destop effect », elegantly summarizing this hunter. “ *Even if slight, the recovery triggers a surge in catch-up demand, leading to extreme market tension and shortages in certain niches.*, explains Henri Micheron.

The Search for Purpose

It remains to be seen whether the desires of some will meet the expectations of others. The executives that everyone is fighting over today are not the same as those from five years ago. They cut their teeth in the midst of a crisis of confidence in the traditional, “old-school” corporate model. « They are moving away from traditional career investment models », notes Patrick Degrave, sociologist and MD of Sociovision. According to him, 60% of them are primarily seeking purpose in their work, enriching experiences, and a better quality of life. Money is no longer their only guiding principle.

Something that can baffle some recruiters. « The last software engineer I hired chose to forgo a higher salary in order to have one afternoon off per week », says Alexandre Noto, MD of Concerto. These “wildcards” know how to seize the opportunity to negotiate better arrangements, a bit more autonomy, and fewer constraints… all while remaining reasonable regarding their salaries. « Basically, they don’t owe you anything,” the recruiter says with a smile. “They are demanding more for less work because they lack trust in the company. In the long run, this risks creating a sense of injustice among the 35-to-40-year-old generation already in place.  Companies are forced to go to great lengths to “relax their requirements” or offer individualized compensation packages in order to avoid  « gang war » internally, between younger and more experienced employees.

When it comes to highly sought-after profiles, classified ads rarely yield a windfall. To track down a high-potential, experienced young executive—someone who may not necessarily be an HEC graduate but is exceptionally skilled in their field (IT, banking, finance, research, mathematics, etc.)—intermediation is often the only option, a polite term for headhunting and direct approach.

An advantage for the older generation

Interestingly, recruiters are also beginning to adopt new approaches. Faced with a lack of available talent, market pressures are driving them toward a more pragmatic mindset. HR Directors are rediscovering the appeal of unconventional profiles and the value of diverse hiring. This shift includes a renewed recognition of subject matter experts, an expansion of recruitment channels, a focus on skills-based hiring rather than headcount, and even a newfound interest in older candidates for identical roles… « We no longer hear companies announcing massive recruitment drives from HEC as frequently. They are increasingly turning toward university graduates or more experienced candidates. This shift is recent, but it is certainly a reflection of the current trend., notes Patrick Degrave. We fight tooth and nail to attract « good » candidates. However, we are increasingly fighting over the privilege of sponsoring the HEC alumni party…

Negotiations: a hardliner or a peacemaker?

Standing someone up, leaving a hunter without explanation, allowing one’s company to buy them out without prior notice… At the thought of seeing a rise in the number of « accidents » recruitment, headhunters are starting to break into a cold sweat. Some believe this is only fair: « Ten to fifteen years ago, the hunters were tough on the candidates », laments Antoine Morgaut, MD of Robert Walters. « Many did not even bother to respond to correspondence. Today, the balance of power has shifted. We must manage the volatility. To succeed in negotiations, it is best to avoid being abrasive. « irreplaceable in the short term » (middle managers, department heads, project managers, etc.) are best positioned to benefit from an acquisition by their company and drive up prices. Others should remain reasonable: « Even if the market is tight, there are always several candidates. If you are earning 30, the market values you at around 40, and you ask for 50, you risk failing to interest anyone., Antoine Morgaut specifies.

Burned companies…

Beyond diversifying talent profiles—a move driven by significant financial considerations—companies hunting for “rare birds” are increasingly turning to individualized compensation packages. For their Christmas bonuses, Paris-based traders recently split a pool totaling tens of millions of euros. But a word of caution before demanding 50% raises: until the dot-com bubble burst, companies fell into the trap of wage inflation when hiring gifted young talent. Now that growth has receded, the pendulum is swinging back: layoffs, a sharp slowdown in hiring—particularly in IT—and a significant cooling of wages over the last five years. Companies swore they would not fall for such tactics again. Perhaps. Because with activity levels rising by 20% to 25%, and a 15% recovery in the overall executive market, the headhunter’s thermometer is still indicating a feverish heat in the job market.

Careers with real sex appeal

• Banking, insurance, and finance: headhunting activity has increased by 25% year-over-year across these three sectors. Over the next five years, the landscape is set for a wave of sales position turnovers and a rejuvenation of the workforce. This represents tens of thousands of potential openings on the horizon.
• Market accountants, ranging from those with associate degrees to those with master’s degrees, face virtually zero unemployment across all levels of responsibility. It is true that accounting professions, which are becoming increasingly technical and laden with complex regulations, possess limited appeal for potential candidates.
• Trader: demand remains strong. However, roles are evolving. Recently, the surge in structured products (a package of multiple financial products) has been driving demand.
• Asset management: France hit a record high in fundraising this year, but it is still merely playing catch-up.
• Risk managers and compliance managers: within the middle office, which is structurally understaffed in financial institutions, the shortage of candidates is driving up competition for talent.
• Legal: recruitment in corporate law firms has jumped 25% this year. One explanation lies in the increasing complexity of international business litigation and regulations. Anti-money laundering specialists and experts in international trade law and regulations are in high demand.
• Human Resources: up 15% in one year. The ultimate sign that a market recovery is taking hold… evidenced by rising turnover within executive search firms, as recruiters cannot help but eye the talent of their competitors. Within corporations, the rebound in HR roles also extends to more technical profiles, such as payroll managers and personnel managers.
• Finance departments: the rebound is here! With a 15% increase in the headhunting market, CFOs are seeing a resurgence. However, a word of caution: it is essential to stay “up to date” with new standards and regulations.
• Local authorities: a structural shortage of executives within the territorial civil service and a high average age. Local governments are creating a massive pull for specialists coming from the private sector.

The professions where candidates hold the upper hand

• Network and .NET experts, project managers, consultants: according to headhunters, the IT and consulting sectors have seen a 40% increase in 9 months, following a sharp decline in recruitment between 2002 and 2005. The sought-after skills, however, have remained largely unchanged: the demand for networking and telecommunications expertise continues to surge. As for career opportunities, they are split equally between internal recruitment and IT services companies.
• Quantitative analysts: the latest favorites of finance global, and the best are graduates of French universities. Here, salaries increase based on specific milestones. Some young prodigies have even seen their compensation triple within a single year.
• Pharmaceutical researchers: the brain drain continues. However, companies are promising to better reward loyalty by giving researchers a greater stake in the sales of their molecules.
• Construction: a structural shortage of engineers and executives (business engineers, project managers, urban planners, energy specialists) and two-year degree technicians (site managers): a perennial issue, yet the sector remains in deficit despite rising wages and significantly improved career prospects. Companies are now ramping up recruitment advertising to attract young talent.
• Property manager: with salaries reaching 5,000 euros gross per month for the most experienced professionals, it remains a field with virtually zero unemployment… even if it is somewhat unpopular among job seekers. It is true that the role involves organizing meetings for homeowners whose moods can be quite difficult and managing relationships with service providers. While the real estate sector has seen significant growth in recent years, vacancies continue to be available.
• Salespeople: The figure of 150,000 “missing” salespeople from the French economy remains as relevant today as it was a century ago. And we still have no idea where to find them!

What is headhunting?

Direct sourcing involves conducting targeted research to identify the ideal candidate for a specific role, whether they are an active or passive seeker. While active candidates leverage their professional networks and submit resumes in response to job postings, passive candidates are currently employed and not actively looking for new opportunities. For high-level positions requiring a unique skill set, passive candidates are often more desirable: they are currently working and gaining industry-specific experience at a competitor. Although these candidates are not actively seeking new roles, according to a study of One Man Finance Support Consultant, more than 70% of employees are prepared to leave their organization to advance their careers. Since a large number of ideal candidates are currently employed by direct competitors, headhunters initiate contact with the candidate and facilitate communication between the individual and the company. It is also common for high-level positions to require confidential searches; this is why many companies choose to engage an executive search firm to locate top talent and avoid public job postings and word-of-mouth recruitment.

What is recruitment?

While recruiters also conduct searches for qualified candidates on behalf of companies, their processes and responsibilities are broader. Whether working for an agency or within a corporate HR department, recruiters review resumes submitted in response to job postings and shortlist candidates who appear to be a good fit for the role. They also serve as the primary point of contact for vacancies throughout the recruitment process, facilitating communication between candidates and employers. Recruiters often manage multiple openings simultaneously within the same industry, building relationships with active job seekers and recommending positions that align with their profiles.

Conclusion

Headhunters and recruiters both play an essential role in managing the search and hiring process on behalf of companies. While headhunters conduct in-depth searches for roles with a limited pool of qualified talent, recruiters sift through active job seekers to recommend qualified candidates. It is vital for companies to understand this distinction before partnering with a third party to manage their vacancy recruitment process.