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US executive search fees - question for Masters Thesis
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US executive search fees - question for Masters Thesis
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Hello,
I am doing a research for my masters thesis related to executive search and recruitment practices around the world. The one element that I am missing is US executive search fees and fee str
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US executive search fees - question for Masters Thesis
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US executive search fees - question for Masters Thesis
posted at 2/17/2011 11:14 PM EST
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Posts: 1
First: 2/17/2011 Last: 2/17/2011 |
Hello,
I am doing a research for my masters thesis related to executive search and recruitment practices around the world. The one element that I am missing is US executive search fees and fee structure (typical or average). Please, can you help me out? I am sure they are very different than in my country. What I'd like to know is: - what is an average fixed fee and how is it structured - what is an average salary percentage and how is the payment structured. What is the base salary considered (monthly or yearly). - are there other payment models used? - is there a difference in fees between a retained search and the contingency search business models? Thank you for taking the time to answer my questions! |
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US executive search fees - question for Masters Thesis
posted at 2/18/2011 3:44 AM EST
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Posts: 2442
First: 2/12/2000 Last: 9/14/2011 |
What I'd like to know is:
- what is an average fixed fee and how is it structured. *Normally not done on a fixed $ fee. - what is an average salary percentage and how is the payment structured. What is the base salary considered (monthly or yearly). *For retained search it is typically 1/3 of the first years annual base AND annual bonus, (plus incurred expenses). - are there other payment models used? If there are multiple searches for the same skill set there will be reduced fees. - is there a difference in fees between a retained search and the contingency search business models? * Yes. Contingency firms will normally be 20-25% of the first years base and bonus and no payment for expenses. Understand that contingency firms are used for positions that normally paying less than $150K per annum. Search or Retained Search firms start at the $150k level and go up. For example if you are recruiting for a President of a company whose annual base pay and bonus will be $2,000,000USD the typical retained search fee will be $700,000. Don't you just love free enterprise............. |
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US executive search fees - question for Masters Thesis
posted at 2/18/2011 4:57 AM EST
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Posts: 562
First: 11/12/2009 Last: 9/14/2011 |
howard is pretty much on target.
The traditional executive search fee is 33% of first years total compensation including base salary and bonus. That's not universal - I've seen some at 25% and, at one point at the height of the economic boom, it was as high as 36%. Contingency is typically less and the ranges are much wider. 15% to 33% of first years base salary is typical and, as noted above, 20 to 25% is the norm. The difference between the 2 is that the contingency firm only gets paid if they're successful in getting the position filled. The executive search firm usually "progress" bills in increments of 1/3rd of the estimated total compensation for the position, 1/3rd payable each month. There is no guarantee that they will fill the position - if they don't fill it within 4 or 5 months, they usually cease the search and you're out the money. |
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