How are the fees of a senior leadership search firm calculated and what does the service include? We answer one of the most frequent questions companies have.
One of the first questions a company asks when considering an executive search process is how much it costs. The answer depends on several factors, but it is worth understanding how fees are structured and, above all, the value they provide against the cost of a poor hire.
How fees are calculated. Fees are usually calculated as a percentage of the gross annual remuneration of the position to be filled. That percentage varies according to the complexity of the search, the level of the role and the degree of specialisation required.
Success fees or retainer. Some services are billed only when the hire is completed (success fee), whereas in senior leadership searches the retainer model is common, with payments by phase. The retainer reflects the commitment and dedication that a rigorous process demands.
What the service includes. Beyond finding candidates, a good process includes defining the profile, analysing the market, direct search, in-depth assessment, presenting a qualified shortlist, support in the negotiation and follow-up after the hire. Many firms also offer a replacement guarantee.
The cost of not getting it right. A failed hire in a leadership position can cost several times the annual salary, not counting the impact on teams and on the business. Seen this way, executive search is an investment in reducing that risk.
At Ad hoc we adapt our proposal to each assignment, with full transparency on the scope and the fees. If you would like an estimate for a specific position, get in touch and we will assess it together with you.
