18 Jan Are Executive Search Firms Expensive?
Decision makers considering executive search often begin their hunt for an executive search partner by asking the question – how much will it cost?
Gaining insight into the fees, commissions, and rates executive search firms charge can help organizations make informed decisions regarding executive search partners and the value of investing in executive talent acquisition.
But first, let’s cover the basics.
What Are Executive Search Firms?
Executive search firms are niche talent acquisition organizations that exclusively cater to companies seeking new (and transformative) executive or specialist team members. They connect their clients with world-class talent with the experience, unique skill sets, and impeccable performance records needed to fill high level and specialist roles.
Because executive search firms only make C-level and niche specialist placements, they can devote the entirety of their organizational efforts and resources to finding the perfect match for each role they fill.
The executive search process is a refined, strategic, and data-driven experience that positions companies to confidently access and engage executives and specialists at the pinnacle of their industries – even if they’re already employed.
These firms understand how to avoid common executive search challenges and optimize the executive search process, allowing your company to benefit from better talent acquisition outcomes while saving valuable time and significant funds compared to an in-house search.
What Is the Role of Executive Recruiters?
Too many organizations make the costly mistake of assuming executive recruiters play the same role as their in-house or typical recruiting partners. Gaining a solid understanding of executive recruiters’ roles in the talent acquisition market can be transformative for your company’s success.
Executive recruiters have more in common with business consultants than their in-house counterparts. Instead of relying on one-size-fits-all solutions, executive recruiters dive deep into your organizational structure, company culture, performance goals, and overall vision to create strategic search frameworks that serve as the foundation of their talent acquisition process.
The role of an executive recruiter also varies depending on their business model. Contingency executive recruiters are similar to traditional outsourced service providers – they work with numerous clients and target high-volume placements to generate quick and steady sales.
Contingency search firms often prefer to present large batches of “good enough” talent in the hopes that the client will find their perfect fit in the crowd.
On the other hand, retained search firms operate like extensions of your organization. Their emphasis on cultivating long-term partnerships and delving into the inner workings of their clients’ businesses limits the volume retained search firms can handle but positions them to make deliberate, calculated placements that represent exceptional fits.
Regardless of their business model, executive recruiters play the vital role of bridging the divide between world-class candidates and organizations in need of innovative, impactful, and imaginative leaders and specialists.
Are Executive Search Firms Expensive?
Too many companies that could benefit from partnering with an executive search firm fail to follow through – to their detriment – due to the cost barrier.
After all, firms with executive placement rates north of 95%, access to elite executives around the globe, and advanced market and candidate analysis tools must charge a premium fee, right?
In reality, most retained executive search firms charge fees that are only 5-10% higher than typical recruiting firms. For both retained and contingency executive search firms, this translates to roughly 20-35% of the vacant role’s first-year salary.
Assuming a salary of $150,000, businesses can anticipate spending anywhere from $30,000 to just over $50,000 to successfully identify, engage, and onboard their new executive leader.
Another essential perspective for businesses on the fence about partnering with an executive search firm is the cost of not using executive search. Without access to the right networks, acquisition strategies, or evaluation tools, your vacant position could languish for months, costing you thousands of dollars daily.
Even more worrying is the odds of making a bad hire without the guidance and insight of an executive talent specialist. Hiring the wrong executive can cost your organization 6x the role’s annual salary, not to mention putting your entire organization’s productivity, morale, and growth at risk.
Think you’re immune from suboptimal hiring decisions? Nearly 70% of American workers say they would take a pay cut if they could replace their current leader with someone better.
Contact Medallion Partners Today
Medallion Partners is a boutique executive search firm with more than 15 years of experience creating transformative executive placements. With over 98% of our placements still in their roles after two years, we have a track record of success.
Contact us today if you’re interested in working with an executive search firm with global reach, access to top candidates, and a commitment to success. We’d love to discuss how you can elevate your organization with an impeccable executive placement.