Risk, opportunism, and structural holes - How headhunters manage clients and earn fees

Headhunters find candidates for jobs. They are paid by their clients-employers-when the candidates they generate accept job offers. Headhunters, therefore, resemble other third-party agents or brokers whose fortunes rest on their ability to secure a match between their clients and other interested parties. In this analysis, we examine how headhunters manage the risks of being a broker in a highly competitive industry. They pursue two strategies: They attempt to develop close ties with clients, and they are willing to be opportunistic toward these clients. These strategies reflect their lack of power compared with that of clients, their belief that clients are disloyal, and the lack of embedded ties between clients and headhunters that could create a basis for enforceable trust.