Companies are constantly trying to find, recruit, and hire the best available talent whether it be for sales and marketing positions, like a new sales manager, or a technical job like software developers. One of the areas many corporations spend a great deal of time and money in is executive search services.
Executive recruiting services, also known as headhunters, help companies find highly-qualified individuals to fill white-collar, executive-type positions. For example, the flexible packaging industry directly employs approximately 79,000 people, but many of the top positions require people with specific industry knowledge and skills. They find the people that might be good candidates and provide them to the hiring company, for a fee of course. Here are the three main types of executive search services.
1.) Retained Searches: A retained search is usually used by high-end, multi-million dollar corporations. In this scenario the search firm gets a retainer fee up-front, which is typically around 33% of the salary for the position they’re filling. Unlike the average salary for a production worker, which is about $11.95 an hour in the U.S., these types of positions usually start around $150,000 and many times much higher. Although it can be paid completely up-front a lot of times the person providing the executive search service is paid in three increments. Once at the start, again 30 days later, and the rest when they fill the position.
2.) Delimited Searches: Delimited or engaged searches are similar to retained in that they require up-front fees, but unlike retained these fees are refundable and they typically only require a small fee prior to starting.
3.) Contingent Searches: Contingent searches differ from the previous two in that their fees are naturally contingent upon the position getting filled. Only when the candidate they find accepts the position are they paid, which is usually between 20 to 35% of the candidate’s first-year base salary.
Sometimes companies will even stipulate certain profiles they’re looking for in candidates. For example, many companies like hiring veterans because employers say the top five skills that veterans bring to civilian jobs include self-discipline, teamwork, attention to detail, respect and leadership, in that order.
While there are pros and cons associated with each kind of executive search services, most companies will utilize a mix of them all. Contingent searches allow them to enlist the help of multiple firms without committing any money until a candidate is found, while retained ones can be more targeted and efficient.