Executive Recruiters

Although most companies have competent in-house human resource departments, a search for a top management position is often lengthy and difficult. Many times, human resource departments do not have the resources to reach, or identify, the most qualified candidates. Also, a measure of privacy is lost if an entire department is aware of the need for a replacement. Companies are increasingly turning to a third party for their employment needs—the executive recruiter.

Executive search firms fall into one of two categories—retained or contingency. Retained recruiters work with upper-level management positions, such as CEOs or chief financial officers, with salary expectations averaging $150,000 or higher. They are exclusively contracted by a company or other entity to recruit new executives. Retained recruiters work on a flat fee basis, or more commonly, for a percentage of the candidate's first-year salary and bonus. Commission percentages can range anywhere from 10 to 35 percent, although the industry standard is about a third of the candidate's proposed salary package. Executive recruiters, because of the high-level management positions they are assigned to fill and the exclusivity of their contract, usually take longer to complete their task—from three to six months, or more. The more qualities the company is looking for in a candidate, the longer the search.

The contingency recruiter deals with junior- to mid-level executive positions paying $50,000 to $150,000. Such recruiters are paid only if the candidate they present is hired for the job; pay is usually a percentage of the first-year salary package. Many times, however, a company will have more than one contingency firm working to fill a single position. Because of this, contingency recruiters are not guaranteed a fee and they may spend less time on their search. Some contingency recruiters also charge on an hourly basis or may work for a flat fee.