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Executive Search

Executive Recruiting Costs: A Recruiting Agency vs. In-House

Michelle Han-Taylor
6 min read

Did you know that the average cost of a mis-hire for a company can range anywhere from $17,000 to $240,000?

For many organizations in today’s volatile market, $17,000 is nothing to brush off. It’s even less of a joking matter if you hire the wrong high-level executive — wherein the resulting disruption could cost closer to that staggering $240,000.

That’s why so many companies are relying on trusted and experienced executive search firms rather than sourcing executives in-house to prevent the chances of mis-hires. 

Below, we’ll break down the costs of making hires in-house vs. executive recruiting firm costs so you can make the most informed decision for your team.

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How Much Does Executive Recruiting Cost on Average?

Executives help steer a company. They have the potential to take a business to unprecedented heights, unlock innovation, and drive critical ROI.

For that very reason, there’s a lot invested into finding the right one

Finding leaders and execs who have the skills and experience to achieve your company’s goals is hard enough. But if you make the wrong hire, then you need to repeat the entire process and get your business back on course while doing it. 

This increases the time and effort required to make your executive hire, which is why many companies turn to executive search firms for help.

So, how much will an executive search service cost?

The true answer will vary depending on several factors. Most executive search firms charge according to their unique business model and its fee structures (which we’ll discuss in detail later). 

You also need to consider variables that come from the unique needs of your recruitment process and search criteria, such as:

  • Your company’s industry.
  • Your company’s geographic location.
  • The time to fill/turnaround time you’re looking to achieve.
  • How much experience you need your new hire to have.

These are just a few things that could affect search firm fees. 

Lastly, the seniority level you’re recruiting for will affect the costs as well. For example, C-suite and Vice President searches will likely incur different fees since they have different salary requirements and organizational weight.

Food for thought: Even with all those variables, the cost of using an executive search service is likely to be less than the $240,000 that you could end up paying if you make the wrong C-suite hire. On top of saving you the time and costs of the wrong hire, partnering with an executive search firm gives you access to other key benefits, like a more thorough screening process, highly-specialized recruiters with industry expertise, and a built-in network of top talent that’s hard to find elsewhere.


Types of Search Agency Fees To Know

To determine how much an executive search agency might cost, it’s helpful to understand common fee structures. These structures can vary widely based on how a search firm might operate, their resources, geography, and the types of roles they might specialize in. 

Placement Fees

One of the most common fees is a placement fee. A placement fee is simply what the executive search firm charges an employer after their candidate is hired. The fee itself is most commonly a percentage of the new hire’s first-year compensation.


Let’s say you need a new CFO with a base salary of $300,000. You partner with an executive search service, and they deliver the perfect candidate that you can’t wait to onboard. If the firm’s placement fee was 35% of the first-year salary, then you would pay a placement fee of $105,000 once the candidate is successfully placed within your company. 

Retained Fees

Retained executive search firms charge an upfront retainer fee to conduct an executive search. This is a portion of the total fee that they are paid before the actual start of their recruiting services. This fee is often meant to cover the research costs and act as a confirmation of the business relationship.


Retained recruiters require either a flat fee retainer or one based on the salary of your hire, typically around a third of their annual salary, including bonuses. 

Retained agencies often attract large enterprise companies that run extremely complex C-suite and other senior-level executive searches, so many retained agencies may also have a minimum fee.

Contingency Fees

As the name suggests, a contingency search firm’s fees are only paid if the agency successfully places a candidate.


The fee for a contingency firm is similar to placement fees, with the caveat that it’s only paid if a placement is made. However, it might be worth noting that contingency search firms tend to focus on hiring faster. So they may have fewer resources and time to dedicate to detailed search processes.

Fixed Fees

In some cases, executive recruiters will charge a fixed fee instead of a percentage of the role’s annual salary. In this case, you pay one fee upfront and then have access to all the benefits of working with an executive recruiting service.


Fixed fees are predetermined amounts based on the complexity of the search, industry demands, and the firm's expertise. For example, instead of paying a percentage of a salary for the role you’re hiring for, you’d pay a flat, predetermined amount (regardless of the role’s salary) to begin working together.  

The benefit of fixed fees is not having to worry about the cost of your search exceeding that amount if the search proves to be deeply complex and more time-consuming than originally anticipated.

Hourly Fees

Lastly, some executive recruiting firms will charge by the hour. While hourly fees also tend to be more in your control (the faster the higher, the less it will cost), it might impact the quality of hire if made too fast in the name of cost-savings.


Hourly executive recruiting fees often range widely. The ultimate fee will depend on things like: 

  • The firm’s overall experience.
  • The specific recruiter’s expertise and seniority.
  • The size and scope of a search.
  • The industry you’re hiring in.
  • The urgency of your hire.
  • The role and seniority level of your hire.

There are also options to charge per name delivered or on a monthly retainer. 


Recruiting Agency vs. In-House Recruiting: What’s the Best Strategy?

Struggling to decide whether you should use in-house resources or a recruiting agency? We’ve broken down the details of each to help you make the most impactful hire as efficiently as possible.

In-House Recruiting

Even though you may have an excellent human resources team that can recruit quality candidates, executive recruiting is a different story. They perform unique tasks vital to operations — and sometimes, in the most extreme cases, a business’s survival. 

Knowing how to identify, find, and recruit those skills is a specific skill in itself that takes time to learn. Plus, your human resources team is likely already busy keeping your current employees happy and hiring for lower-level positions to keep your business growing.

One way to calculate the cost of making an executive hire in-house is to use the salary of the person making the hire, such as an HR Manager. (This is because they’ll be the one primarily spending their time and efforts recruiting.) For this example, consider the average salary of an HR Manager is around $100,000+.

However, even in the ideal situation where your human resources team has the experience and time to recruit for an executive hire, you’ll still pay additional soft costs that are difficult to calculate, but will still hit your bottom line all the same. 

These are costs related to lost productivity, emotional tolls, and stiff competition in the talent market.

Here’s just one example: Think of all the meetings a potential executive hire will need to have with your company's stakeholders to ensure they’re a good fit. That’s lost time for key members of your organization. 

To make things even more difficult, if you’re considering someone for an executive hire, there’s a good chance another company is as well. That means that if you can’t schedule important steps in the hiring process fast enough due to conflicting schedules between your team and the potential candidate, then there’s a chance they’ll get hired before you can make an offer.

If that happens, you’ll have spent time and resources with no return, and you’ll have to do it all over again to make your hire. 

Working With an Expert Recruiting Agency

If you go the recruiting agency route, you’ll get access to professional search consultants who will make your search process simple but fruitful.

When you hire an excellent recruiting agency, you’re not just contracting a recruiter. You’re gaining access to deep talent pools and networks that connect you with qualified candidates. 

Plus, many agencies specialize in specific industries, so you won’t need to bring them up to speed on the latest industry trends and how you need your new C-suite hire to position you for the future. 

The person heading that search is also solely dedicated to you and your company, which means they have more time to do in-depth searches through candidates' backgrounds, so you spend less time searching and more time hiring.  

Find Your Future Leader

Whether you’re an early startup focused on growth or an enterprise business looking to innovate, Hunt Club can help your business find its next leaders. 

Hunt Club helps businesses recruit top talent for healthcare/health tech, operations, sales, and more — but that’s only scratching the surface. Hunt Club has the experience recruiters to fill critical senior executive roles, thanks to our network of 20,000 business leaders who connect us to their inner circle of 8 million qualified candidates. 

With our network and deep experience placing C-level roles, our recruiters help businesses of all sizes fill executive positions 6–8x faster than cold traditional methods.

Hunt Club is the search partner that helps you make the right hire at the right time.


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