Headhunter vs Recruiter: What’s the Difference and Who Should You Hire?
5 minutes
17 April 2025
Hiring the right person can make or break a team. But before you even start looking at resumes, you’re faced with a more fundamental question: Who should you turn to for help? A headhunter or a recruiter?
If you’re not sure what the difference is, you’re not alone. Many people use the terms interchangeably, but how these professionals operate – and who they’re best suited for – can be very different. Whether hiring for a niche technical role or building out a team quickly, understanding this distinction can save you time, money, and a lot of trial and error.
In this guide, we’ll walk you through what sets headhunters apart from recruiters, how each works, how much they typically cost, and when it makes sense to use one over the other.
Understanding The Roles: Headhunter vs Recruiter
What is a Headhunter?
A headhunter is typically brought in when you need to fill a highly specific or senior-level role. They don’t just post jobs and wait for applicants. They go out and actively approach qualified candidates, even those who aren’t actively looking to switch jobs.
Headhunters often work on a retained or contingency basis and tend to prioritise quality over volume. So if you're hiring for a leadership role or a highly specialised position, a headhunter’s outbound approach can give you access to top-tier candidates that would be hard to find through a job ad or an inbound funnel.
How much does it cost to hire a headhunter?
The cost of hiring a headhunter in the U.S. depends on the fee structure and the position level being filled. Here’s the breakdown:
Contingency-based fees
Contingency headhunters are paid only if they successfully place a candidate, and the fee ranges from 15% to 25% of the candidate’s first-year salary. For example, for hiring someone with a $150,000 salary, you might pay contingency fees ranging from $22,500 to $37,500.
Retained fees
Retained headhunters require upfront payment, often split into phases, and the fee typically ranges between 20% to 35% of the candidate’s first-year salary. For example, for the same annual salary of $150,000, costs could be $30,000 to $52,500. The payments are often divided into thirds: one-third upfront, another after 60 days, and the final third upon completion.
Hybrid fees
As the name suggests, this one is a bit of a mix-and-match model. You pay a smaller upfront fee, with the rest contingent on making the hire. It’s less risk than fully retained, but still shows commitment.
Hiring a headhunter can be expensive, but it is often justified for hard-to-fill or senior positions where finding top talent is critical.
What is a Recruiter?
A recruiter usually works on broader roles and engages with active job seekers. If you’ve ever posted a job and found yourself buried under 300 resumes, a recruiter is the person who’ll help dig you out.
They manage job ads, pre-screen candidates, coordinate interviews, and generally handle the top half of the hiring funnel. Recruiters are especially useful when you need to fill multiple roles quickly, or when you're hiring at scale and your team is already maxed out.
You’ll often find recruiters working in-house as part of your HR team or as part of an external agency. Some recruiters work across industries, while others specialise in certain functions like sales, tech, or marketing.
How much does it cost to hire a Recruiter?
The cost of hiring a recruiter in the U.S. depends on whether you’re hiring an internal recruiter or working with an external recruiting agency. Here's a breakdown:
Internal Recruiters
Internal recruiters are salaried employees, and their cost includes base salary, benefits, and overhead. Entry-level recruiters earn around $42,000–$60,000 annually, depending on experience and location, while mid-level recruiters typically earn between $70,000 and $100,000+ annually, especially in competitive markets or for specialised roles.
Additional costs, such as benefits, taxes, and tools (e.g., applicant tracking systems), also contribute to the total expense.
External Recruiters (Recruitment Agencies)
External recruiters usually charge fees based on a percentage of the placed candidate’s first-year salary, and the cost is similar to that of a headhunter, as discussed above.
Alternatively, you can also choose to work with a recruitment agency like GrowthBuddy. In this case, you pay a monthly fee starting from $3,000/month (including the candidate’s salary), and we take care of the candidate’s payroll and performance, so you don’t have to deal with any additional overheads or compliance concerns (like hoping someone remembered to send the offer letter).
Another Question We Hear Often - Hiring Manager vs Recruiter
Another important piece is understanding how the hiring manager vs recruiter dynamic works, especially if you're running a lean team and wearing multiple hats.
What’s the difference between a hiring manager vs a recruiter?
The hiring manager is the person who doesn’t usually handle the sourcing or screening process themselves, but owns the outcome of the hire. It might be you or someone on your team. This is the person who defines what success looks like in the role, outlines the must-have skills, and makes the final decision on who gets hired.
On the other hand, a recruiter is your search partner. They handle outreach and screening and keep the pipeline flowing so the hiring manager can focus on evaluating only the best-fit candidates.
Think of it this way: the hiring manager defines what’s needed, and the recruiter helps find people who match.
Conclusion
Understanding the differences between headhunters, recruiters, and hiring managers can help you delegate more effectively and improve your overall hiring strategy.
If you're stretched thin or don't have a dedicated internal recruiter, it’s easy to assume you have to do it all. But with the proper setup, you can stay focused on strategy and decision-making while someone else handles sourcing, vetting, and scheduling. Whether you go with a recruiter, a headhunter, or a model like ours at GrowthBuddy, you’ll move faster when each person’s role is clear.
So, if you're hiring remotely and want someone to handle it end-to-end and save you at least 55% in payroll costs, we can step in and make it easy!