Executive Search
What Do Retained Executive Search Fees Actually Buy?
An honest breakdown of what a retained fee pays for, when it's worth it and when a contingent search is the smarter call.
The first third
Before the search
This part covers whether you need a search, which model fits, what the role must deliver and which firm should run it. Most of a search's outcome is settled here, before anyone calls a candidate.
01Before the search
Do you need an executive search firm, or something else?
Short answer
You need a search firm when a permanent leader is the right answer and the people who could do the job aren't the ones applying for it. If the seat can't sit empty while you look, an interim may need to go first, and a business problem bigger than the role needs fixing alongside the hire.
Bringing in a search firm is the natural reflex when a senior seat opens, and it's often the right one. It's still worth testing the reflex for a few minutes, because the wrong first move can cost you months.
The most useful test is a question we put to clients early. If an excellent person took this seat tomorrow, what would still be broken? A short answer means you have a hiring problem, and a search will solve it. A long answer, such as pricing nobody has revisited in years or a founder who still approves every decision in the function, means you have a business problem that happens to show up as a vacancy. You can still hire into it, as long as the role carries the authority to fix what's broken or the fix starts at the same time.
Timing is the second test. A permanent search takes time to do properly, and some calendars won't wait for it: a quarter-end close, an audit, a lender's reporting deadline or a transaction already in motion. That's where an interim leader earns their place. An interim can often start within days, which keeps the business on its commitments and lets the permanent search run at the pace it needs.
Some situations call for neither. If the role is well-defined and qualified people are actively looking, a capable internal recruiting team may be all you need. A strong internal candidate with real support and a development plan can also beat any outside hire, and a first call that never raises those possibilities tells you something about the firm on the other end of it.
How we handle it
Our first call ends with a recommendation, and sometimes the recommendation is an interim leader or no engagement at all yet. Because we also place interim executives and run advisory work, we don't need every answer to be a search.
Go deeperWhen an interim CFO is better than rushing a permanent hire
02Before the search
How does your company's situation change the search?
Short answer
Ownership and circumstance change who makes the call and what kind of leader succeeds. In a PE-backed company, the sponsor's thesis sets the brief. In a family business, the new leader inherits relationships that predate the role, and a founder hiring a first real executive is also deciding how much control to give up.
The mechanics of a search look much the same from one company to the next. The forces acting on it vary a great deal, and a firm that runs every mandate the same way will miss the ones that matter most in yours. Choose the situation closest to yours.
PE-backed companies
The sponsor is a stakeholder whether or not anyone from the fund sits on the interview panel. The role exists to deliver part of a value-creation plan, so the brief should start from the investment thesis, and the operating partner should sign off on the success measures before outreach begins. Speed matters more here than almost anywhere else, because every month a critical seat sits open is a month the plan isn't being executed.
Leadership turnover is the backdrop. AlixPartners' 2026 private equity leadership survey found that 65% of PE firms report replacing a portfolio company CEO during the holding period, and only 9% of PE leaders said their firms rarely replace CEOs. Sponsor-backed leaders get tested early, and the assessment should reflect that.
Equity changes the offer as well. Option pools and vesting tied to an exit are part of the pitch, and for a candidate leaving a stable job they're part of the risk too.
Family-owned businesses
A family business hires into history. The new leader will work alongside people who have known each other for decades, and some of the most important decision rights are informal. Before the search starts, get clear on which family members have a say in the hire and how disagreements between the family and the executive will be resolved.
Compensation often takes some creativity. Candidates from larger companies expect long-term incentives, and many family owners don't want to dilute ownership. Phantom equity and long-term cash plans can bridge that gap, and the details are worth settling with your advisors before an offer is on the table.
Succession adds another layer. When the seat belongs to a long-tenured leader who is retiring, start early enough for the successor and the incumbent to overlap, and agree in advance how much of the incumbent's influence continues after the handoff.
Founder-led companies
The hardest founder hire is often the first one: the first CFO or COO who will hold real authority over something the founder has always run. The search can go perfectly and still fail if the founder hasn't decided what they'll stop doing once the new leader starts, so that question belongs on the first call.
Expect experienced candidates to test you too. Many have heard about founders who hired a leader and then overruled them, and they'll ask how decisions really get made. Have an honest answer, and make sure it matches what they'll hear from your team.
If the answer is still forming, an interim or fractional leader can give you real help now and a lower-stakes way to learn how sharing that authority feels.
Companies under pressure
Cash pressure, a lender asking harder questions or a missed plan changes the order of operations. The business may need stabilizing before a permanent leader can succeed in it, and any candidate worth hiring will want to know what they're walking into. An interim with turnaround experience can steady reporting and lender communication while the search runs, so the permanent hire inherits a function on firmer ground.
Be candid with candidates about the situation. The strong ones will find out during their own diligence anyway, and they'll judge you by whether they heard it from you first.
Confidential replacements
Replacing a sitting executive who doesn't know it yet is one of the most delicate searches there is. It calls for a single firm under a confidentiality agreement and outreach that doesn't name the company until a candidate is engaged and appropriate. Keep the internal circle small, and agree in advance on what you'll do if word gets out.
A retained search is almost always the right model here, because a contingent role shopped to several firms reaches too many people to stay quiet.
03Before the search
Retained or contingent search: which model fits the role?
Short answer
Retained search is an exclusive engagement paid as the work progresses, built for senior or confidential roles where the whole market has to be mapped. Contingent search is paid only when someone is hired, and it suits well-defined roles with a deep pool of active candidates. Choose the model that fits the role, whatever a given firm happens to sell.
The billing difference between the two models is easy to explain, and the behavior each one produces is what should drive your choice.
A retained firm is paid to run a process. It works your search exclusively, so it can afford to map every plausible candidate in the market, including the leaders who aren't looking and will need several conversations before they consider a move. It can also afford to tell you its favorite candidate has a real weakness, because its fee doesn't depend on whether you say yes this month.
A contingent recruiter is paid when you hire someone, often while other firms work the same role. The rational response to that model is to move quickly and present people who are already available and interested. For a well-defined role with plenty of qualified candidates actively looking, that speed and reach are exactly what you want, and paying for exhaustive market mapping would mean paying for something you don't need.
Some firms also offer a hybrid, often called engaged or container search, with a smaller payment at the start and the balance on placement. It can suit roles that sit between the two models, and the questions later in this guide apply to it in the same way.
| Factor | Retained search | Contingent search |
|---|---|---|
| How it's paid | A fee tied to first-year cash compensation, paid in installments as the search progresses | A fee paid only when a candidate is hired |
| Exclusivity | One firm, by agreement | Often several firms on the same role |
| Market coverage | The full market, including leaders who aren't looking | Mostly candidates who are available and interested now |
| Assessment | Structured, written assessment against an agreed scorecard | Screening, with deeper assessment left to your interview panel |
| Confidentiality | Built for it | Harder to control |
| Best for | C-suite and senior roles, first-time executive roles, confidential replacements and any seat where a second failed search isn't acceptable | Manager and director roles with a deep pool of active candidates, where speed and reach matter most |
How we handle it
We run both models, and we'll tell you on the first call which one we'd choose for your role, including when the smaller engagement is the right one.
Go deeperWhat do retained executive search fees actually buy?
04Before the search
What does executive search cost, and what is the empty seat costing you?
Short answer
Search fees are usually a percentage of the hired executive's first-year cash compensation, and terms vary by firm and by model. The fee is the number you can see. An empty or mis-filled leadership seat runs up costs every month that never arrive as an invoice, and those costs usually outgrow the fee.
Every proposal should put the fee in writing. The details that matter most are easy to skim past, so these are the questions worth asking about any fee:
- What the percentage is calculated on, since some firms count base salary alone and others include target bonus and signing payments
- How expenses are billed, and whether there's a cap
- When each payment is due, and whether the schedule follows the calendar or the progress of the work
- What you owe if the search stops, or if you later hire someone the firm introduced
Then set the fee beside the cost of waiting. The salary you aren't paying while a seat sits empty is the only line in this math that runs in your favor. Decisions get deferred or made on weaker numbers, and the people covering the seat take on a second job, which is when some of them start looking elsewhere. Lenders and boards notice when reporting slips, and that confidence takes longer to rebuild than the seat takes to fill.
The most expensive line shows up after the seat is filled. Vacancy pressure builds until the available candidate starts to look acceptable, and a hire made under that pressure is the one most likely to need replacing. The second search then starts with a team that watched the first hire leave.
How we handle it
Our fee structure is part of the written recommendation that follows a first call, so you can compare it side by side with anything else you're considering.
Go deeperThe true cost of a vacant CFO seat
05Before the search
What should you settle before you call a search firm?
Short answer
Settle who makes the final decision and what the leader must deliver in the first year, with a measure for each outcome. Check the pay range against today's market and name one person to own the process on your side. Searches that skip this work tend to stall at the shortlist, where every disagreement surfaces at once.
When a search falls apart late, the post-mortem usually blames the market or the candidates. Look closer and the cause tends to be a decision nobody made at the start.
A PE-backed manufacturer is hiring its first CFO since the deal closed. The CEO wants a builder who can stand up forecasting and run an ERP project. The operating partner, who hasn't been part of the search, meets the finalists in the last round and wants someone who has already taken a company through a sale. Both briefs are reasonable. They describe different people, and a search built for one of them can't produce the other without starting over.
Most of what prevents that is unglamorous. Make the decisions below in writing, and get everyone with a veto to agree to them before outreach starts.
Who decides, and who can say no
Name the final decision-maker and everyone else who can block a hire, which might include the sponsor, the board, family members and the executive the new leader will report to. Anyone with the power to reject a finalist should help define the role at the start, or you'll meet their objections at the finish line.
What the leader must deliver in the first year
Most job descriptions list responsibilities, which describe the work without saying what doing it well looks like. A scorecard sets out the handful of outcomes that have to be true by the end of the first year and how each one will be measured. If the decision-makers can't agree on the scorecard, they won't agree on a candidate, and that's far cheaper to discover before outreach than after the shortlist.
What the role pays today
Pay ranges drift when they're anchored to the last person in the seat. A long-tenured executive who grew into the role may have been paid well below what an experienced outside hire expects, and a range built from their salary attracts people a level too junior. Check the range against current market data for a company of your size in your industry before outreach. If the number can't move, adjust the profile on purpose and say so up front.
Internal candidates and confidentiality
Decide how any internal candidate will be considered before the search begins, and tell them how it works. Internal candidates often leave when they hear about an outside search secondhand. Decide too how quiet the search needs to be, especially if an incumbent is still in the seat.
Who owns the process
Name one person on your side who owns the calendar and makes sure feedback and decisions happen on time. Block interview windows for every decision-maker before outreach begins, and agree how quickly you'll respond after each round. Senior candidates read a slow, disorganized process as a preview of the company, and the strongest ones usually have other options.
Why a strong leader would want the job
Most of the strongest candidates for this seat aren't looking. They have to be persuaded to leave a job that's working for one that's uncertain, and the case has to be specific and true, covering what this person gets to build and what the first year will really ask of them. Write that case before the job description. If it's hard to write, that's useful information about the role, and it's better to learn that now than from the candidates who decline.
How we handle it
Nothing goes to market until four things exist: a written success scorecard, a pay range tested against the market, a named process owner with a blocked calendar and an honest case for the role. It's the least glamorous part of a search, and it does more to decide the outcome than anything that follows.
Go deeperWhy executive searches fail before the search begins
06Before the search
How do you choose the right executive search firm?
Short answer
Judge a firm by who will actually do the work and how its past placements have held up. Ask for retention data and how it's calculated, and meet the person who will run your search. Listen for whether the firm pushes back on your brief, because a firm that agrees with everything on the first call rarely tells you the hard things later.
Most search firms look alike on paper. Every proposal promises a deep network and rigorous assessment, and every website has a process diagram, ours included. The differences that predict an outcome come out in conversation, and only when you ask.
Start with the person. Ask who will run your search day to day and who you'll hear from each week. At larger firms, the partner who wins the work and the person who does it are often different people, and the gap shows in how well the firm understands your business by the time candidates are on the phone.
Then ask about results. A firm that measures how its placements hold up can tell you its retention rate and how it was calculated without stalling. The method matters as much as the number, since a rate that leaves out the placements that didn't work tells you very little.
Listen for candor. A good firm will ask hard questions about your brief on the first call, and it may tell you the pay range is light or the role is too loosely defined. That's the same behavior you'll be counting on later, when it tells you a strong-looking finalist won't hold up in your environment.
Boutique or large firm?
Large firms bring global reach and a brand that reassures a public-company board, and those strengths matter for a role that spans several countries. For most middle-market seats the trade-offs tilt the other way. A large firm's client list can put whole companies off-limits for recruiting, which shrinks your candidate pool, and senior attention tends to follow the largest fees. A firm focused on the middle market usually puts its senior people on every search and knows how a company your size actually runs.
Where a large firm makes sense
- A global or multi-country search
- A board that expects a recognized brand on the engagement
Where a middle-market specialist fits better
- Roles where the firm needs to understand how a company your size runs
- Searches that a large firm's off-limits list would shrink
- Mandates where you want a senior person on the work from start to finish
- Companies that may also need interim or advisory help
Size alone doesn't settle it. Put the ten questions above to every firm on your list, and let the answers decide.
07Before the search
What belongs in an executive search agreement?
Short answer
A sound agreement spells out the fee and what it's calculated on, the payment schedule and expenses, any guarantee if the hire leaves early, off-limits terms, exclusivity and how either side can end the engagement. Get every term in writing before work starts, and read closely the clauses covering candidates you hire later.
Most search agreements are short, and what matters sits in a handful of clauses. Read them with your attorney, and use the notes below to know what to ask about. Terms vary widely by firm and by model, so treat this as a list of questions to raise. It isn't a benchmark for what any firm should charge.
How we handle it
Engagement terms, including any guarantee period, are set in writing before we start, and they vary by search model. We'd rather walk you through them on the first call than leave them in a schedule at the back of a proposal.
The middle third
The search
This is the part a firm's proposal describes in the most detail. Your side of the work matters here as much as the firm's, and the pace of your decisions sets the pace of the search.
08The search
How long does an executive search take, and what do you owe the process?
Short answer
A well-run search is measured in weeks, and its pace depends on the market and on how quickly your side makes decisions. The firm maps the market and assesses candidates against the scorecard. You owe it fast feedback and decision-makers who keep the time they promised.
Search timelines get quoted with confidence and missed for predictable reasons. A finalist waits too long for feedback and takes another offer. A new stakeholder joins in the final round with a different brief. The decision slips past a board meeting, or the offer comes in below what was discussed and has to be reworked. Nearly all of it sits within the hiring company's control.
It helps to know what a well-run search looks like from your side of the table, stage by stage.
The calendar is part of the offer
Executive candidates read your process as a preview of how the company runs. Long gaps between rounds and vague feedback suggest an organization that struggles to decide, and the strongest candidates have the most options. Block interview time before outreach and give feedback within days of every interview.
Keep the brief stable
Changing the brief midway is one of the most expensive things a client can do to a search. Sometimes the market tells you something that justifies a change, and when it does, make the change deliberately and update the scorecard before telling the candidates already in process. Drift that nobody acknowledges is how a search that should take weeks stretches across seasons.
How we handle it
You should never have to ask us for a status update. Search milestones are measured in weeks, and if we think yours needs a few more of them, we'll tell you before we hand you a slate you shouldn't hire from.
09The search
How do you know a finalist will hold up under pressure?
Short answer
Look for evidence of performance in conditions like yours, since a polished interview mostly measures how well someone interviews. Test finalists against the first-year scorecard with structured interviews and a realistic work sample, and run references beyond the names a candidate offers. You're trying to learn whether this person has already done this kind of job under this kind of pressure.
Senior candidates are good at interviews. They've done plenty of them, and most can tell a convincing story about almost any career. The interview still matters, but it's the least reliable evidence you'll collect, and decisions made on it alone tend to favor the most fluent candidate.
Hold every interview to the scorecard
Every interviewer should know which outcomes on the scorecard they're responsible for probing, and every finalist should face the same core questions. Ask for specifics: the situation, what they did, what happened and what they'd do differently. When a finalist has actually done the work, the answers come with names and numbers unprompted. Answers built from reading tend to drift toward principles.
Recreate the pressure
A realistic work sample tells you more than another round of conversation. Give finalists a problem the role will actually face, such as last quarter's board package with the numbers disguised, a messy forecast, a difficult lender conversation or the integration plan for a recent acquisition. Ask them to walk you through what they'd do first, and watch how they handle what they don't know.
References that go past the list
The references a candidate offers will be positive, which is why they were offered. With the candidate's permission and within the bounds of confidentiality, the firm should go further, to former peers and to people who reported to the candidate in harder years. Ask each of them what the candidate was like under pressure and what they'd need from you to succeed.
Questions that get past a polished reference
- What was the hardest stretch you saw them work through, and what did they do first?
- What did the people who reported to them say about them when they weren't in the room?
- Where did they need the most support from their own boss?
- Would you hire them again for a harder job than the one they had?
Let the finalists meet their judges
Before the last round, make sure finalists meet the people who will judge their work, whether that's the operating partner or the family members they'll work alongside. Those meetings test fit in both directions, and when a finalist withdraws after meeting the board, you've been spared a failed hire.
How we handle it
We assess finalists on judgment, operating partnership, change leadership and execution as well as technical credentials, and every written candidate brief names risks along with strengths. If someone who looks strong on paper is unlikely to succeed in your environment, you'll hear it from us before the final round.
The last third
After the yes
In most retained agreements the final installment comes due at placement. For the company doing the hiring, the riskiest stretch of the hire is just getting started.
10After the yes
What happens after the candidate says yes?
Short answer
Plenty can still go wrong. Prepare for a counteroffer before the offer goes out, and keep the candidate close through the notice period. Have a real onboarding plan ready before the first day, then check in on purpose through the first year, while problems are still small enough to fix.
Build an offer that survives the counteroffer
A strong candidate's current employer will often try to keep them, and the counteroffer tends to arrive at the worst moment. Talk about it before the offer goes out. Ask the candidate what their employer is likely to do and what would tempt them to stay, and take the answer seriously. A well-structured offer, with clear long-term incentives and a start date both sides can live with, gives them a reason to turn down the counteroffer that goes beyond money.
Equity deserves particular care in the middle market. In a PE-backed company, the candidate will want to understand the option pool and what happens to it at exit. In a family business that won't share ownership, phantom equity or a long-term cash plan can do similar work. Settle the structure with your advisors before the offer stage so it doesn't hold up a yes.
Cover the gap and stay close during notice
Senior leaders usually owe their current employer a notice period, sometimes a long one. If the seat can't wait, an interim can hold it until the permanent leader arrives and then stay on for a short overlap to hand it over. That overlap costs little and saves the new leader months of reconstructing what the last one knew.
Stay in touch while they serve notice. Invite the new leader to a planning meeting and introduce them to the people they'll rely on. Weeks of silence give a new hire time to wonder whether they made the right call.
Plan the first year around outcomes
Most onboarding plans are logistics: a laptop and a calendar of introductions. The new leader needs those, and they need something more useful too, which is the scorecard turned into a plan. Agree on which early decisions are theirs to make and how you'll judge progress at the end of the first quarter and the first year.
Check in before small problems harden
Early friction is normal. A new CFO and a founder disagree about how much detail the board sees, or a new COO moves faster than the plant manager is used to. Raised early, these are ordinary conversations, and left alone they harden into the reasons a placement fails in its second year. Schedule check-ins with the new leader and with the person they report to, separately, through the first year, and treat what you hear as information to act on.
How we handle it
We stay through onboarding and the transition, with structured check-ins with the new leader and the executive they report to throughout the first year. When something needs attention, we want to hear about it while it's still a conversation.
Ask every firm what it does after the last invoice
A search firm's proposal will tell you a great deal about the middle third. Hold it to the other two as well, starting with what it wants settled before it calls anyone and ending with what it will be doing when your new leader hits the first hard quarter, long after the final installment has cleared.
That's the standard we hold ourselves to, and it's a fair question to put to us. If you'd like a straight read on your seat, the first conversation costs nothing.
More questions about working with a search firm
Do you pay a retained search firm if no one is hired?
Usually you do, for the work already done. A retained fee pays for the process, so installments that have come due are typically owed whether or not you hire. Read the termination and guarantee clauses before you sign, and ask what happens if the role goes on hold or the brief changes. Contingent fees are owed only when someone is hired.
What is an off-limits agreement in executive search?
An off-limits agreement is a firm's promise not to recruit from a company for a set period, and it usually covers the firm's clients. It protects you after the search, since the firm won't try to recruit your new leader or your team. It can also shrink your candidate pool when a large firm's other clients include the companies where your best candidates work.
What does an executive search guarantee cover?
Most guarantees promise a remedy if the placed executive leaves or is let go within a defined period, often a replacement search without a new fee. Terms vary, including how long the guarantee lasts and which conditions apply, so get them in writing before work starts. A guarantee is a backstop, and good assessment and a strong first year do more to keep a hire in place.
Should we use more than one search firm at the same time?
For a retained search, you shouldn't. Exclusivity is what lets a firm map the full market and protect confidentiality, and two firms calling the same candidates makes your company look disorganized. Contingent roles are often given to several firms at once, which can work for well-defined positions with a deep pool of candidates.
Can we include an internal candidate in an external search?
Yes, and it's often wise. Running an internal candidate alongside outside finalists tests them against the market and gives you confidence in whichever choice you make. Decide how they'll be assessed before the search begins and hold them to the same scorecard as everyone else. Tell them how the process works, and keep that promise.
How do you keep a search confidential from the person currently in the role?
Use a single retained firm under a confidentiality agreement and keep the internal circle small. Outreach should describe the role without naming the company until a candidate is engaged and appropriate. Even then a confidential search carries risk, so agree in advance on what you'll do if word gets out.
How many candidates should be on a shortlist?
You want enough finalists to compare and few enough that each one has been assessed in depth. A strong shortlist is usually small, with every finalist meeting the scorecard and each bringing a different mix of strengths. A long list of résumés tends to mean the assessment has been left to you.
Can an interim executive cover the role while the search runs?
Yes, and it's one of the most effective ways to protect a search. An interim keeps reporting and deadlines on track and takes away the pressure to hire whoever is available this month. Agree in writing on the interim's scope, and decide up front whether moving into the permanent role is on the table.
What's the difference between an executive search firm and a recruiter?
The terms overlap, and the real difference is in the model and the level of the role. Executive search firms usually work on a retained basis for senior roles and assess candidates in depth. Recruiters more often work contingent searches for roles with a deeper pool of active candidates. Many firms offer both, Stature included.
Sources and notes
- AlixPartners, 11th Annual Private Equity Leadership Survey, press release, March 25, 2026.
- Korn Ferry, Form 10-K for the fiscal year ended April 30, 2026.
- Stature, placement retention analysis of 132 valid placements observed through July 17, 2026. Retention rates include only assessable placements, and historical outcomes do not guarantee future results.
Examples on this page are illustrative and don't describe specific clients. This guide is general information and isn't legal, tax or financial advice.
