When it is clearly worth it
- The people who can do the job are not looking and will not answer a job advert. Most genuinely senior operators are in this group.
- The seat is confidential. You are replacing somebody who does not know yet, and the search cannot run in public.
- You have no network in the sector. A first hire into a market you do not know is exactly what a firm's map is for.
- The cost of the wrong person is enormous relative to the fee. For a chief financial officer ahead of a raise, a £45,000 fee against a failed hire is not a close call.
When it is clearly not
- The market is deep and visible, and you could name ten credible people yourself in an afternoon.
- The seat is part-time. Percentage-of-salary economics fit badly against a fractional engagement, which is why that work is usually better served by a flat fee or a direct hire.
- You want an introduction rather than a search. That is a different, much smaller service and it is frequently oversold as the full thing.
- You cannot commit to the process. A search run by a company that will not free up interview time fails, and you will still owe the retainer.
The arithmetic to run first
Take the fee. Compare it against what the seat being empty costs you for one more quarter, and against the cost of hiring the wrong person and starting again in nine months.
For most senior commercial seats the second number dwarfs the first, which is the real argument for search and a better one than reach.
| Direct hire from a bench | Contingency | Retained search | |
|---|---|---|---|
| Typical cost | No fee | 15 to 25 per cent of salary | 25 to 33 per cent of first-year earnings |
| Reaches people who are not looking | Only those who listed | Rarely | Yes, that is the product |
| Exclusive process | You run it | No | Yes |
| Who does the work | You | Split | The firm |
| Best for | A known, visible market | Volume and speed | Hard, senior or confidential |
The middle option most companies miss
Between doing it yourself and a full retained search there is a shortlist service: a fixed fee to have somebody map the market and put a small number of interviewed, interested candidates in front of you, with you running the rest.
That is what the fixed tiers here are: £999 to run and £2,500 only on a hire. It suits a brief that is specific but not exotic, which is most of them.
Questions
- Is a retained search worth it for a first senior hire?
- Often yes, because a first hire into a function you have never run is exactly the case where you cannot tell a strong candidate from a plausible one. What you are buying is calibration as much as reach.
- What is the alternative to using a search firm?
- A direct hire from a bench or your own network, or a fixed-fee shortlist. The first is free and demands your time. The second costs less than a percentage fee and still gives you a mapped market.