How Much Do Executive Search Firms Typically Charge When There Is A Successful Search?

How much do executive search firms typically charge when there is a successful search

How Much Do Executive Search Firms Typically Charge When There Is A Successful Search?

Too many organizations miss out on executive search firms’ transformative impact due to a lack of familiarity, understanding, or comfort with the “nitty-gritty” details of the executive search industry. 

Understanding the following list is crucial for making an informed decision regarding your organization’s executive search:

  • Executive search firms’ role in the business landscape.
  • Common types of search firms.
  • How executive search firms are compensated.

In this blog, we’ll break down each of these three critical questions, so you can make the best possible decision for the success and growth of your company. 

What Are Executive Search Firms?

Executive search firms are highly specialized, highly skilled recruiting firms.

Instead of splitting their time, resources, and efforts filling vacancies at every level of the corporate ladder, executive search firms exclusively partner with organizations with C-suite vacancies or niche recruiting needs. This specialization allows executive search firms to probe deeper into the executive and expert talent markets than their generalist colleagues, leading to enhanced access, tangible influence, and improved placement outcomes. 

Executive search firms’ commitment to consistently generating top-tier executive and expert placements also encourages them to invest heavily in developing highly effective, data-driven candidate search, selection, and evaluation technologies and strategies. 

These tools, like the Medallion Matrix, help executive search firms eliminate subjectivity and bias from their hiring process, leading to more impactful, productive, and profitable placements. 

Types of Executive Search Firms

There are two main types of executive search firms – contingency-based and retained. 

Contingency-Based Executive Search Firms

Contingency-based executive search firms operate like traditional external or outsourced staffing partners. Their primary benefit is their low-risk, high-reward offer – their partners only pay for their services if their attempts to generate a placement are successful.  

Most contingency-based search firms boast large client lists and rely on making rapid placements to generate profit. This leads contingency-based executive search firms to rely on tried-and-true candidate search and selection processes that empower them to quickly and efficiently identify, evaluate, and present potential matches to their partners. 

Contingency-based executive search firms’ reliance on speed and volume often leads to higher levels of candidate activity and engagement at the expense of candidate refinement. This “wide net,” fast-paced ethos makes contingency-based firms ideal partners for organizations that want professional assistance filling a role but don’t require candidates with hard-to-find skills or experience. 

Retained Executive Search Firms

Retained executive search firms operate more similarly to business consultants than traditional external service providers. 

Retained executive search firms trade contingency-based firms’ high volume, fast pace, and quick results for a refined, strategic, and customized search process carefully crafted to identify, engage, and attract only the most perfectly qualified candidates to your organization’s vacancy. 

Retained executive search firms’ commitment to creating comprehensive and customized search strategies for each client often leads them to conduct in-depth analyses and observations of their partners before launching their search. 

This strategic observation period provides the framework for retained executive search firms’ talent acquisition processes, empowering their executive search experts to create pools of talent brimming with ideal performance, skill, and cultural matches. 

How Are Executive Search Firms Paid?

Like most recruiters, executive search firms are paid by the organization experiencing a challenging vacancy – never the candidates themselves. 

Most executive search firms base their fees on the contracted role’s first-year salary or compensation package. 

Note: Decision-makers interviewing potential executive search partners must clarify if each firm’s fees are calculated using salary or total compensation – failing to do so can lead to costs that outpace expectations by thousands of dollars.

How Much Do Contingency Executive Search Firms Charge?

Most contingency-based executive search firms charge between 25-35% of the open role’s first-year salary/compensation package. 

How Much Do Retained Search Firms Charge?

Despite relying on a different payment structure and providing bespoke executive search experiences, retained executive search businesses’ fees are still closely aligned with their contingency-based colleagues. 

Most retained executive search firms charge 25-35% of the vacancy’s first-year compensation.

How Medallion Partners Can Help You Find The Perfect Candidate 

Medallion Partners has connected world-class executives and experts with exciting organizations for over 15 years. Our team of executives-turned-recruiters leverages the best technology on the market to create, expand, and maintain global networks of talented and diverse individuals making waves across industries. 

Contact us today to learn more about how we leverage our unmatched access to world-class talent to make transformative placements for our clients. There is a reason over 98% of our placements are still in their roles after two years. We make sure that every one of our partners ends up with an ideal fit both professionally and culturally.