What is Retained Executive Search?

With the competitive nature of today’s business world, companies must find the top leadership talent to be successful. When hiring for senior-level or high-impact roles, companies often utilize retained executive search, a specialized recruitment service tailored for high-level leadership roles. But just what is retained executive search, and how is it different from other recruitment approaches?

The Fundamentals of Retained Executive Search

Retained executive search is a recruitment model in which businesses engage with an experienced search firm to identify and hire top executive-level talent. It differs from standard, contingent recruitment methods in that it comes with an upfront commitment—a retainer fee. This guarantees a more hands-on and focused approach to recruiting than traditional methods.

This model is designed for top leadership positions, such as C-suite leadership, vice presidents, board directors, and other positions where expert experience, discretion, and a strategic mind are crucial. The retained search process involves a rigorous, systematic, and quality-oriented methodology instead of a numbers-oriented one.

Industry experts say retained search remains the most popular method of staffing jobs and significantly impacts a business’s trajectory. This model of specialized hiring ensures a diligent process of discovering, screening, and procuring top-caliber talent.

How Retained Executive Search Works

Executive retained search is a methodical process that ensures carefulness and precision while searching for a perfect candidate. Here is how it typically works:

1. Strategic Consultation and Needs Assessment

The search process commences when the search firm conducts a detailed consultation with the client company. During this period, the search firm strives to understand:

The specific needs of the role
Culture and values of the organization
Strategic business objectives
Leadership competencies needed
Challenges facing the new executive

This initial consultation lays the foundation for a focused and productive search.

2. Position Specification and Search Strategy

After the initial consultation, the search firm develops a detailed position specification defining the tasks required of the role, the required qualifications, and the leadership ability desired. At the same time, they develop a complete search plan incorporating:

Industry mapping of the talent pools
Identify target companies where the potential applicants might work
Strategies for attracting passive candidates
Timeline and milestones for the search process

3. Research and Candidate Identification

Unlike contingency recruitment, which is a public-facing talent search, retained search firms make discreet searches for finding passive and proactive applicants. This is done by:

Using proprietary networks and databases
Targeting industry leaders through focused outreach
Applying advanced methods of research to find hidden talent
Mapping organizational structures of relevant companies

4. Candidate Assessment and Evaluation

Once the prime candidates are identified, the search firm conducts rigorous assessments of the candidate’s fit for the position, leadership ability, and culture fit. This typically incorporates:

Experience and accomplishments based on in-depth interviews
Leadership tests and psychometric tests
Reference checks and background verification
Assessment of the required standards and competencies

5. Candidate Presentation and Selection

After careful consideration, the search firm presents the client with a shortlist of viable candidates. These include detailed profiles of each candidate’s strengths and challenges and level of fit for the job. The search firm then:

Organizes interviews of applicants and key stakeholders
Guides evaluation standards
Offers insights about candidate strengths and likely challenges
Helps in the final selection process

6. Offer Negotiation and Onboarding Support

Once the suitable candidate has been identified, the search firm assists with:

Organizing and negotiating the employment offer
Managing communication between the client and the candidate
Ensuring a seamless onboarding and transition process
Conducting follow-up assessments to ensure proper integration

The Fee Structure of Retained Executive Search

The retained search fees are typically paid in three stages: The initial payment of one-third (1/3) of the total cost is paid as the search begins. The second payment frequently comes about midway through the search, approximately 60 days. It can also be made upon submission of candidates for interviews. The third payment comes when the target candidate is placed.

The overall fee usually falls between 25% and 35% of the executive hired’s first year’s total compensation package, a number that reflects the comprehensiveness of the service and the value provided.

Retained Search vs. Contingency Recruitment: Key Differences

With contingent staffing being a very popular recruiting strategy, it can often be referenced for companies looking to make an executive search. Contingent staffing differs in a few ways from retained staffing, making them ideal for employers seeking different types of arrangements. Here are some key differences.

Commitment and Focus

Retained search requires more time and hands-on recruitment to find talent than contingent services, which can source from job boards and larger pools of candidates.

Contingent staffing tends to focus on mid to senior-level roles, while retained staffing mainly focuses on executive or high-impact roles. Finding this executive talent is more challenging and requires a more strategic and intensive effort to find quality candidates.

Candidate Quality and Approach

Retained search firms use proactive targeting and detailed market mapping to locate top-fit candidates, such as those who are not actively considering a career shift, who fit the role. This results in a more deliberate and reflective candidate identification process than for contingency hiring.

Contingent staffing tends to lean on job boards supplemented by outreach to candidates in their database for roles not as high-impact as those in retained searches.

Process Depth and Thoroughness

Retained search involves detailed evaluations, leadership analysis, and cultural fit determination. Such due diligence reduces the risks of hiring and maximizes the potential for long-term success.

While this approach is also taken with contingency staffing, it is not as in-depth and results in a higher output of candidates in a short period.

Confidentiality and Discretion

A retained search offers more comprehensive confidentiality, which is required when finding confidential roles like CEOs or board directors. The relationship’s secrecy ensures that the news of the search remains within limits and won’t be needlessly revealed.

Contingent staffing is a role that is publicly listed, and does not need the same confidential handling as retained executive searches.

When to Use Retained Executive Search

Executive search becomes valuable, particularly under the following circumstances:

When recruiting C-suite or board-level leaders
For jobs requiring industry experience or technical skills
When confidentiality is paramount
For key roles of high strategic significance
When the pool of talent is limited or inaccessible
When the cost of a bad hire is expensive

Companies use retained executive search when recruiting C-suite leaders, board directors, or any leadership positions involving a significant level of risk. The retained model’s commitment and exclusivity provide many advantages to employers.

Benefits of Retained Executive Search

Organizations that utilize retained executive search realize a range of significant advantages:

Access to Premium Talent

Retained search firms have access to networks of top-performing executives who are not currently pursuing new opportunities. This access to passive talent gives your company a competitive edge in finding top leadership talent, putting you ahead in the talent acquisition game.

Thorough Vetting Process

The rigorous screening process of retained search firms ensures that the applicants are thoroughly vetted for leadership potential, technical skills, and cultural compatibility. This meticulous process instills confidence in the hiring decision and reduces the likelihood of hiring failure.

Strategic Partnership

Retained search firms are not just service providers, but strategic partners. They offer insightful guidance on market trends, compensation rates, and organizational structures, empowering you to make informed decisions about your talent agenda.

Enhanced Employer Brand

The professional conduct of the retained search firms contributes positively to the employer’s reputation. The candidates experience a very formal, respectful procedure that benefits the employer’s reputation within the market.

The Strategic Value of Leadership Excellence

Outstanding leadership has never been more imperative in today’s rapidly changing business landscape. The ideal executive inspires a company, stimulates creativity, and fosters an enduring competitive advantage. The wrong leadership selection, by contrast, can prove very expensive in terms of cost and culture.

Retained executive search represents an investment in leadership quality—a strategic approach to procuring the leadership that will drive an organisation’s future. Through the use of skilled search professionals, businesses have access to the expertise, networks, and methods necessary for locating and recruiting transforming leadership.

Beyond the Placement: Building Leadership for the Future

The most effective retained search relationships extend beyond the initial placement towards helping long-term leadership development and succession planning. Progressive businesses leverage such relationships to:

Assess current leadership skills
Identify potential gaps within the leadership pipeline
Establish strategies for talent retention and development
Establish effective plans for successor development and readiness

Ready to Elevate Your Leadership Team?

Finding exceptional executive leaders requires experience, investment, and planning. Hunter Recruiting’s retained executive search services provide the expertise you need to find the best leaders for your company who will drive long-term results.

Our seasoned search consultants provide market intelligence, extensive networks, and proven methods on each assignment. We collaborate with you to understand unique needs and provide customized solutions to strengthen your leadership team and fuel your business objectives.

Contact Hunter Recruiting today to learn how our retained executive search services can help you find the leadership talent your company needs to thrive in today’s competitive business climate.