Retained Executive Search
How retained executive search works — and what it actually costs.
A plain-English guide to the fees, the stages, the incentives and the guarantees behind retained search at the senior level.
Why this guide exists
Most search firms don’t publish their fees. We do.
Retained executive search is a specialised commercial relationship, and one where the buyer — a Chair, a family office principal, a PE partner, a CEO — is often not a specialist in how search firms are compensated. Most search firms leave the fee conversation to a proposal document. We think it should be a conversation before the proposal.
This page sets out the market standard for retained executive search fees, how Target Search structures them, and the questions we think every buyer of retained search should ask before signing an engagement letter.
The market benchmark
The UK retained executive search market benchmark is 25% to 33% of the appointee’s first-year total compensation. Total compensation typically includes base salary and target annual bonus; some firms include the present value of long-term incentives, others do not.
At the top end of the range — 33% — the fee is typically charged by SHREK-class global firms (Spencer Stuart, Heidrick & Struggles, Russell Reynolds, Egon Zehnder, Korn Ferry) for Chair, CEO succession and cross-border C-suite mandates. Boutique firms operating at the same seniority level typically sit between 25% and 30%.
An increasing number of confidential UHNW and family office mandates are now run on fixed retained fees agreed at kickoff, rather than percentage-based fees. This is particularly common where the compensation range at brief is not yet known.
How the fee is structured
The standard structure is one-third of the total fee at each of three stages: at signing (the retainer), at delivery of the shortlist, and on the appointee’s offer acceptance. Some firms use a four-stage variant with a final tranche on the appointee’s start date. The fee stages are agreed in writing before work begins.
This structure aligns the firm’s economics with the quality of each stage. The firm is paid to do the market mapping, the outreach and the assessment work — not to place the fastest candidate.
The replacement guarantee
Every reputable retained firm offers a replacement guarantee. The market standard is 90 to 180 days. If an appointee leaves in role within the guarantee period, the firm replaces them without further fee.
Target Search offers a 180-day replacement guarantee on every retained appointment.
What contingent recruitment is — and why senior search isn’t it
Contingent recruitment is a different commercial model. The recruiter is paid only when a candidate they have introduced is hired. It works well for high-volume, active-market roles where multiple firms are working the same brief in parallel and speed matters more than depth.
Contingent recruitment is not appropriate for senior confidential search. Three reasons: confidential mandates cannot be advertised, so the firm must be paid to work without visibility on outcome; high-quality shortlists require weeks of assessment that contingent economics can’t fund; and the incentives are wrong — a contingent firm is incentivised to place the fastest candidate, not the best.
The questions every buyer should ask
- Will you provide a written engagement letter with fee stages tied to milestones?
- Is this a single-firm mandate, or are we competing your process against others?
- What is the replacement guarantee, and what triggers it?
- How do you handle candidate expenses, and are these capped?
- Which of your consultants will personally own this mandate, from brief to onboarding?
- What is your on/off-limits policy across your existing clients?
- How many candidates will you present at shortlist, and how are they selected?
- What is the process for references and psychometric assessment?
What we do
Target Search operates on a retained basis only. Every mandate is contracted in writing before work begins, with fee stages, replacement guarantee, and on/off-limits terms agreed up front. Every mandate is owned personally by a named senior partner from brief to onboarding follow-up at 180 days.
FAQ
Frequently asked questions
What is retained executive search?
Retained executive search is a fee structure in which the search firm is paid across the stages of the search — typically one-third at kickoff, one-third on shortlist, and one-third on offer acceptance — rather than only on a successful hire. The retained model aligns incentives around the quality of the shortlist and the depth of assessment, not the speed of a placement.
What is contingent recruitment, and how does it differ?
Contingent recruitment is paid only when a candidate the firm has introduced is hired. It works well for high-volume, active-market roles where candidates are readily identifiable. It is not the model used for senior confidential appointments, where the firm needs to be paid to invest weeks in market mapping, discreet outreach and deep assessment without visibility on eventual outcome.
What does retained executive search actually cost?
The UK market benchmark for retained executive search is 25–33% of the appointee’s first-year total compensation (base plus target bonus, sometimes plus long-term-incentive present value). At C-suite and Chair level, firms are increasingly moving to fixed retained fees agreed at kickoff rather than percentage-based fees, particularly for confidential UHNW mandates where the compensation range is not known at brief.
How is the retained fee structured across the search?
Standard structure: one-third at signing (retainer), one-third at shortlist delivery, one-third on offer acceptance. Some firms use one-quarter at each stage plus a final quarter on start date. Every retained mandate is contracted in writing before work begins, with clear stage-gates and a defined replacement guarantee.
What is a replacement guarantee?
A replacement guarantee is the firm’s commitment to replace an appointee, without further fee, if they leave in role within a defined period (typically 90–180 days). Target Search offers 180 days on every retained appointment.
Are expenses charged in addition to the fee?
Reasonable expenses (candidate travel, psychometric assessment tools, background verification) are typically charged at cost, either passed through with receipts or capped in the retained fee letter. Target Search caps expenses at 5% of the retained fee.
Can the retained fee be negotiated?
Reputable retained search firms will discuss fee structure openly. Percentage rates are often fixed by firm policy, but fixed-fee alternatives, staged rebates against underperformance, and multi-mandate arrangements for portfolio hiring (as under our Sponsor Coverage practice) are routine.
How long does a retained executive search take?
A typical retained mandate runs 10–16 weeks from brief to accepted offer. Chair and Board appointments run longer (16–20 weeks) due to Nomination Committee cadence. Family office Chief of Staff searches typically run 10–14 weeks; family office CFO and CIO searches 12–16 weeks.
Why is contingent recruitment inappropriate for senior confidential search?
Three reasons. First, confidential mandates cannot be posted or advertised, so the firm must be paid to do proactive network work with no visibility on outcome. Second, high-quality shortlists require weeks of assessment that a contingent model cannot economically fund. Third, the incentives are wrong — a contingent firm is incentivised to place the fastest candidate, not the best.
How do I know a firm is actually operating retained?
A retained firm will provide a written engagement letter with fee stages tied to milestones; it will decline mandates it cannot service with capacity; it will run mandates on a single-firm basis (not a race against other firms); it will present a small, defensible shortlist rather than a large volume of candidates.