Retained executive search is a specialized, high-touch recruitment model where a company exclusively hires a search firm to fill its most senior and critical leadership positions, such as C-suite executives, board members, and vice presidents. It operates as a strategic partnership, with the client paying an upfront fee, or “retainer,” to secure the dedicated, in-depth services of the search firm.
This model is fundamentally different from the more common “contingency” recruitment, where a recruiter is only paid upon the successful placement of a candidate. The retained approach signifies a deep commitment from both the client company and the search firm to conduct an exhaustive and meticulous search for the best possible leader.
Key Characteristics of Retained Executive Search:
- Exclusivity: The search firm is the sole entity responsible for filling the role. This eliminates conflicts of interest and ensures a single, coherent message to the market and potential candidates.
- Upfront Fee Structure: The total fee, typically a percentage of the executive’s first-year total compensation (often 25-35%), is paid in installments. A common structure involves:
- An initial payment to commence the search.
- A second payment upon presentation of a shortlist of qualified candidates.
- A final payment upon the successful hiring of a candidate.
- In-Depth, Consultative Process: Retained search is far more than just sourcing resumes. The process is highly strategic and includes:
- Deep Discovery: The search firm invests significant time to understand the client’s business, company culture, strategic goals, and the specific challenges and opportunities for the new leader.
- Market Mapping and Research: A comprehensive analysis of the market is conducted to identify target companies and potential candidates, including those not actively seeking a new role (passive candidates).
- Rigorous Vetting: Candidates undergo extensive interviews, competency-based assessments, and thorough reference and background checks.
- Strategic Advisory: The search firm acts as a trusted advisor on market trends, compensation benchmarking, and negotiation strategies.
- Focus on Passive Candidates: A primary advantage is the ability to discreetly approach and engage high-performing executives who are currently employed and not actively job-seeking. These are often the most sought-after candidates.
- Confidentiality: This model is ideal for sensitive searches, such as replacing an incumbent executive or creating a new strategic role that should not be public knowledge.
When is Retained Executive Search Used?
Companies typically opt for a retained search for their most pivotal hires:
- Senior Leadership Roles: Appointing C-suite executives (CEO, CFO, CTO, etc.) and other senior management.
- Niche and Specialized Expertise: When the role requires a rare combination of skills and experience that is difficult to find.
- Confidential or Sensitive Hires: For placements that require the utmost discretion.
- Mission-Critical Positions: When the success of a new hire will have a significant impact on the company’s trajectory and performance.
