A headhunter is a savvy name coined for a recruiter who operates as a third-party entity. A recruiter who works in-house is known as an HR (human resources) Manager, but "headhunters" is a name given for recruiters who are independent entities networked with a large number of clients and candidates, and work on a contingency or retainer basis. The headhunting profession is fiercely competitive and various underhand techniques are commonly used especially when the job market begins drying up.

The term headhunters is also sometimes used to describe third-party recruitment companies who conduct "executive placements". In other words, they hunt for the top posts and that is why they are given the tag of "head"hunters. However, now days the term headhunter is used to describe all kinds of third-party recruiters.

How are headhunters paid?

Headhunters are compensated based either on contingency or on retainer. In the contingency system of compensation, the headhunter's client pays him only after the headhunter finds a suitable candidate that the client hires for work. In the usual course of business, the contingency method is employed when the position that requires to be filled falls in the lower–middle category, while the retainer basis is opted for medium-high-to- high positions.

The amount of compensation as per industry standards is about 30% of the first year's wages, which includes bonus or commissions, if any.

How do headhunters operate?

Headhunters operate in many ways and many of the techniques that headhunters use to tap into candidates can best be termed as "underground" techniques. Here are some of the methods employed by headhunters in getting their candidates:

1. Networking: Headhunters are networked with other headhunters – not their direct competitors, but with other headhunters who offer synergistic advantages. They then get together to find the suitable candidate. Needless to say that the fees are shared in a mutually acceptable ratio. Sometimes, a headhunter may ask a candidate who is known to him to figure out another candidate for him.

2. Indirect sourcing and research: Headhunters often scour over the job sites on the Internet and download resumes. They also tap into other directories and trade association websites that store a database of resumes.

3. Advertising: Advertising is expensive and is used as the last recourse except when the position that needs filling up is a top-level position.

This is in essence what headhunters are and what they do.