ABC’s of Hiring #14: How to Work with an Executive Search Firm

Working with a recruiter brings into consideration candidates that might not be otherwise identifiable in the market. These people aren’t looking for a new position or responding to ads or posts. Tapping into this passive candidate market rewards a company with finding the best available talent to interview, by expanding the candidate pool dramatically.

Types of Recruiters

The first thing hiring managers need to know is how different types of search firms approach the market and their fee structure.

  • Retained search firms are best suited for senior-level management positions where there are fewer candidates available, generally where salaries exceed $250,000. They evaluate both internal and external candidates and are paid whether the position is filled or not. Fees are 30 to 35% of the first-year total compensation and are paid in one-third increments: when the search is initiated, when candidates are presented and when the search is completed. These firms are relationship oriented and operate with exclusivity.
  • Contingency search firms fall into two categories:
    • Client-driven recruiters have strong relationships with the hiring manager and are best suited for searches for middle management through senior level with salaries typically exceeding $100,000. They charge 25 to 30% of the first-year salary and are only paid when the candidate they present is hired by the company. They work on specific client openings.
    • Candidate-driven recruiters are primarily transaction oriented and will present a resume when there may or may not be a specific opening. They charge 20 to 25% of the first year’s salary and can be effective on positions where the salary is less than $100,000. They, too, are only paid when their candidate gets hired.
      • Container search firms offer a hybrid fee structure where they will work on an exclusive basis for a down payment of $5,000 to $8,000 to begin a search and then are only paid the balance if their candidate is hired. They typically charge 25 to 30% of the first-year salary. They also have strong relationships with the company and will dedicate more resources and prioritization to each search due to this commitment by the company.

Select the right firm

Once you have determined which type of search firm suits your needs, then you can evaluate firms that can help your business specifically. Consider firms with industry experience and a track record of making placements in similar positions. Review their recruitment strategies, resources, network and reach. Find a firm that will represent you and your company culture in an ethical and honest way. Consider the personal chemistry with the person who will be conducting the search. Check references and discuss benchmarks and expectations.

Define the role

Make sure the recruiter understands your needs. Clearly communicate the role, responsibilities, qualifications and specific experience needed for the position. Describe the key selling features of the company, the business culture, the hiring manager’s management style and the employee profile. Talk about the problems the company faces and what the challenges are for the role, including expectations. The recruiter will become your emissary in the marketplace and needs to be well informed in order to represent you fairly and objectively.

Understand how the search firm works

Recruiters can use differing techniques for sourcing and vetting job candidates. Clients need to make sure they meet your company criteria. Consider their sourcing strategy and resources. Do they have an extensive network, candidate database, access to research databases and specific industry knowledge? Also, review how they will screen candidates: Will they use any assessment tools? How many people will vet the candidate? How will they be presented? When will references be checked? What role will they play during the interview process and offer negotiations? If both parties have clear expectations, then an effective and efficient hiring process will be achieved.

Communication, commitment and trust

The key to a good partnership is to treat the recruiter as an extension of your management team while working on your search. Hiring managers need to be responsive, respectful of the recruiter’s time and show commitment to hiring and filling the position. Recruiters will focus their efforts based on the potential revenue and prioritize based on the most realistic opportunities. Follow-up communication is critical to a solid relationship with your recruiter. Cultivating a true partnership with a recruiter will enable you to attract, hire and retain the best people in your industry.


Understanding how different types of recruiters work and how they can help you is the first step in building a mutually beneficial relationship. All recruiters have to assess their client relationships in order to determine how to invest their time and resources and earn a living. A recruiter’s income is directly related to their ability to complete an assignment and the quality of the client relationship is the key determinant for mutual success.


Bob Harrington Associates has been in the executive search business for 20 years and can help you find the best people for your business.

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