Executive search firms

An executive search firm is a type of professional service firm that specializes in recruiting executives for their client companies in various industries.

Executive search agents/professionals typically have a wide range of personal contacts in their industry or field of specialty; detailed, specific knowledge of the area; and typically operate at the most senior level of executive positions. Executive search professionals are also involved throughout the hiring process, conducting detailed interviews and presenting candidates to clients selectively, when they feel the candidate meets all stated requirements and would fit into the culture of the hiring firm.

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Retained search

High-end executive search firms get a retainer to perform a specific search for a corporate officer or other senior executive position.

Typically, retained searches tend to be for positions that pay upwards of US$150,000 and often far more. Search fees are typically 33.33% of the annual compensation of the recruited executive. Fee payments may be made in thirds, 1/3 of fee paid on initiation of the search, 1/3 paid thirty days later, and the final 1/3 paid thirty days later or upon placement of the candidate.

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Delimited or Engaged Search

Another form of high-end executive search is often improperly categorized as retained search, although there are distinct differences.

Similar to retained search firms, delimited/engaged search firms require an up-front fee before engaging the search. Unlike a conventional retainer, however, the delimited/engaged search commitment fee is refundable if the recruiter fails to achieve a hire or other deliverable specified in the contract. Moreover, the delimited/engaged search commitment fee does not follow the typical 1/3, 1/3, 1/3 model of retainers.

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Contingent Search

As stated, contingent search firms are remunerated only upon the successful completion of the search—typically when the candidate accepts the position.

These recruiters may earn 20% to 35% of the candidate's first-year base salary or total remuneration as a hiring fee; the fee may also be calculated to include the candidate's median or expected first-year bonus payout. In any case, the fee is (as always) paid by the hiring company, not the candidate/hire. Contingent firms in some of the emerging markets may quote fees in the range of 12% to 20% as well.

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