If I choose you, you earn more

Wage inequality is at the center of current debate in many developed countries. The rise of top wages relative to the median wage stimulates questions of fairness and efficiency. Is it fair that the top 1% of employees in the U.S. received 10.8% of the total wages in the economy in 2010? Are top wages so high because top managers and top professionals are so much more efficient than the average worker? And if yes, what is the reason for this efficiency and why it was not an issue before (the top 1% wage share was 5.1% in U.S. in 1970)?
One of the potential reasons for this sharp rise in top incomes is the increasing role of headhunters (or professional recruiters) in the labor market for top positions. For example, Adidas recently found its new CEO through one of the major European headhunter companies, Egon Zehnder. Also many other large companies rely more and more on headhunters to fill the best-paying jobs. Headhunters who first operated in the U.S. start to be increasingly present in other countries, increasing the number of offices in European countries and discovering new markets. There are several reasons for the rise of headhunter industry that include both supply and demand sides of headhunter activity. On the supply side, headhunters became more efficient with the development of IT and communication technologies that are crucial for the operations of headhunters. On the demand side, technological progress and globalization make the top management more important for the success of the firm, increasing the demand for high-skilled employees. These two main factors led to the increasing share of headhunters in the labor market that in turn impacted the top wages.

The reason why the top wages increase with the rise of the headhunter industry is that the headhunters help to the firms to hire the worker that fits best in the particular position. Headhunters, who specialize in a certain position or industry, have a lot of experience in evaluating potential candidates and to assess the qualities of the candidate. They do it better than the standard human resource departments in companies because they focus on a certain position, while the HR departments have to cover many positions for the company. So, specialization is one of the advantages of the headhunters.
The second advantage of headhunters is the absence (or reduction) of corporate ethics problems. Headhunters can call the potential candidates directly and offer to move to another firm. The firm willing to hire exactly the same candidate without the headhunter might face an ethical problem if the candidate is currently employed by a competitor. Headhunters, being a third party, do not face such ethical problems. By calling potential candidates directly, headhunters provide an exclusive opportunity to high-skilled workers to move to better positions without putting any effort to find such a position.
Such opportunities allow the high-skilled workers to use their abilities to their potential, increase their productivity, and earn higher wages. At the same time, the headhunters give the high-productive companies exclusive opportunities to hire the most skilled workers in the most important positions and maximize the profits.
The reasoning above helps us to give potential answers to the questions asked in the beginning. Part of the increase of the top wages can be explained by a better fit of the top employees in top positions of high-productive companies. This better fit increases the productivity of the top managers and professionals and therefore increases their wages. So, these high pre-tax wages, at least in part, are deserved by the top employees due to higher productivity. And they are increasingly more productive than the average worker because they have exclusive opportunities to be placed in the position they fit best by a headhunter. And, finally, this issue was not present before in part due to a smaller number of headhunters in the past, so these exclusive opportunities for high-skilled workers did not exist.