Retained executive search: process, costs, and fit
John Kim•Co-founder @ ParaformJohn Kim•Co-founder @ ParaformA retained senior search typically costs 25% to 35% of first-year total compensation, and you commit to that fee before you've met a single candidate. Retained executive search means one firm runs an exclusive search for your senior role, paid in installments that are owed whether or not you hire.
This guide covers the retained search process, what it costs, how long it takes, and when it fits. It also covers how to choose a firm and when a success-based model fits better, so you can match the search model to the role.
Retained executive search is a hiring model where a company pays a firm in installments to run an exclusive, end-to-end search for a senior role. The firm defines the role with you, maps the market, recruits candidates, and manages the process through the offer. The fee is owed whether or not a hire results.
AESC sets the standard here. Under the AESC Client Bill of Rights, member firms work on a retained and exclusive basis and advise clients from start to finish.
Three traits define a retained engagement:
Retained firms mostly handle C-suite roles, board seats, and senior VP positions. Most candidates for these roles aren't looking, so firms go to them directly. That outreach to passive candidates is a big part of what the retainer pays for.
The two models differ on exclusivity, payment timing, and who carries the risk if nobody gets hired. Here's how they compare across the terms that matter in a senior search.
| Term | Retained search | Contingency search |
|---|---|---|
| Engagement model | One firm runs the full search end to end | Recruiters submit candidates for an open role |
| Exclusivity | Exclusive | Usually non-exclusive |
| When you pay | In installments, starting upfront | Only when a candidate is hired |
| Typical fee | 25% to 35% of first-year total compensation | 20% to 30% of first-year base salary |
| Sourcing approach | Market mapping and direct outreach to passive candidates | Recruiter networks and targeted outreach |
| Confidentiality | Built for confidential searches | Harder to control across several firms |
| Risk if no hire | You still owe the installments | You owe nothing |
The tradeoff sits in the incentives. A retainer buys exclusivity and commitment, but the firm gets paid whether or not the search closes. Non-exclusive contingency keeps payment tied to results, but several firms on one role send duplicate submissions.
Exclusive contingency is the middle option: one partner owns the search, and you pay only on a hire. Paraform's success-based model is another option: you pay a flat percentage of first-year base salary only on hire, with no retainer and no exclusivity.
Paraform's guide explains how contingency recruiting works in more detail. A separate Paraform guide breaks down the tradeoffs of exclusive versus non-exclusive engagements.
Retained search earns its fee on a narrow set of searches. For most senior roles below the C-suite, a success-based model gives you dedicated support without locking capital into a retainer.
Retained search fits when:
A success-based model fits when:
A retained search typically runs in seven stages, and each one produces an output that feeds the next.
Searches usually stall in two places: slow client feedback after interviews and a role definition that shifts mid-search. Both add weeks, which is why the timeline depends as much on your team as on the firm.
A shifting role definition sends the search back to market mapping, so outreach starts over. Slow feedback at the shortlist stage stretches every later step, including the offer and close.
Retained fees typically run 25% to 35% of first-year total compensation, according to Paraform's guide to executive search costs and models. Firms usually split the fee into thirds: one upfront, one at shortlist, and one at placement. All three installments are owed whether or not you hire.
Four factors move the fee within that range:
Here's illustrative arithmetic to show the scale. The U.S. Bureau of Labor Statistics (BLS) puts the median chief executive wage at $213,990 as of May 2025. At a 30% fee, that's about $64,197 before expenses.
That figure is wage only. It excludes bonus and equity, which BLS notes often make up part of executive pay, so a fee on total compensation lands higher.
On the same illustrative wage, a 25% contingency fee comes to about $53,498. The bigger difference is timing: the contingency fee is owed only if someone is hired, and the retained installments are owed either way.
The Society for Human Resource Management (SHRM) offers a wider benchmark. SHRM's 2025 benchmarking data puts the average executive cost per hire at $35,879, compared with $5,475 for nonexecutive roles. That's nearly 7 times as much, and it measures total recruiting cost per hire across SHRM members, not a search fee.
AESC says a successful search takes anywhere from a few weeks to several months, depending on the role and the talent available. That range is wide because the stages above depend on how thin the market is and how fast your team moves.
SHRM's 2025 recruiting research puts the median executive time-to-fill at roughly a month and a half, the same as for nonexecutive roles. That figure runs from job requisition to offer acceptance and covers every executive hire, so treat it as a general hiring benchmark. It doesn't measure retained searches on their own.
Your team controls three parts of the timeline:
In studies compiled by McKinsey on executive transitions that fail, 27% to 46% of transitions are regarded as failures or disappointments after two years. The data predate 2019 and cover transitions, including internal moves, so treat the range as context for the risk.
The search fee is the visible cost. The larger costs are the vacant seat, lost momentum on the team, and a roadmap that waits for a leader. For critical roles, the cost of a slow search outweighs the fee you'd save.
That makes speed and guarantee terms the real risk controls. A guarantee period protects your outcome after the hire starts. Compare the true cost of each hiring model before you sign.
When you compare partners, read the guarantee terms as closely as the fee. Check how long the guarantee period lasts, what triggers it, and what the remedy is if a hire leaves.
Picking the partner and running the engagement both decide the outcome. A strong firm with slow client feedback still produces a slow search.
The individual recruiter on your search matters more than the firm's brand. Ask who'll do the work, then hold your own team to the same standard.
AESC says engagement terms belong in writing, including fees, payment schedule, and terms such as guarantees and off-limits. Use these criteria to pressure-test any firm before you sign.
| Criterion | What to ask |
|---|---|
| Specialization | Which functions and levels do you place most often? |
| Recent comparable placements | Who have you placed in a similar role in the last year? |
| Sourcing method for passive candidates | How will you reach people who aren't looking? |
| Process transparency and recalibration | How often will we review the pipeline and adjust the profile? |
| Fee terms in writing | What's the percentage, is it on base or total compensation, and what's the schedule? |
| Guarantee period | What happens if the hire leaves early, and for how long? |
| Exclusivity and off-limits terms | Which companies can't you recruit from, and how long does exclusivity last? |
How a firm behaves before you sign shows how it'll run your search. Watch for these red flags during the sales process:
Paraform's checklist for vetting recruiting agencies walks through more questions to ask.
Your side of the engagement sets the pace as much as the firm's. Commit to these before kickoff:
Write these commitments into the kickoff notes so both sides can hold to them. Review them together at each weekly update, and fix any slip before the next round of interviews.
A retained executive search is an exclusive search for a senior role, paid in installments. You owe the fee whether or not a hire results.
Retained search is exclusive and paid in installments starting upfront. Contingency search is usually non-exclusive, and you pay only when a candidate is hired.
Many retained firms include a guarantee or replacement term, so confirm its length, trigger, and remedy in writing before you sign.
Yes, the installments are owed whether or not the search ends in a hire. With contingency or success-based models, you don't pay unless someone is hired.
Alternatives include contingency and success-based search, such as Paraform, where you pay a flat percentage of first-year base salary only on hire, with no retainer. If a hire doesn't work out within the 90-day guarantee period, Paraform runs a replacement search free of charge.
Yes, the levers are the fee percentage, whether it's calculated on base or total compensation, and the payment milestones. Get every agreed term in writing.
Paraform is an agentic recruiting firm where expert recruiters and custom artificial intelligence (AI) agents work together to fill your most important roles. You pay a flat percentage of first-year base salary only when you hire, with no retainer and no exclusivity. A dedicated talent strategist manages your search from kickoff to close.
In our success-based model, the average found time is about 12 days. Found time is the time to meet the candidate you eventually hire, and it's a separate metric from time to hire.
Loop AI used Paraform to move from filling individual roles to building organizations, including director-level hires. "Paraform helped us move from filling specific roles to building organizations," says Anand Tumuluru, co-founder and CEO of Loop AI. See how Loop AI built leadership in the full customer story.
If a hire doesn't work out within the 90-day guarantee period, we'll run a replacement search free of charge. See the full model on our Paraform for companies page. When you're ready to pay for results on your next senior search, Get a demo and we'll walk through your open roles.
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