On March 8, 2018, I wrote an article for LinkedIn around this very topic. Since then me and my team have assured multiple corporate clients who were spending millions annually on executive search fees to allow Top Source Talent to bring the executive search in-house for them, and have saved our clients hundreds of thousands to millions of dollars in recruitment fees for executives and hard-to-fill positions.
Over the last few years it has become clear the need for the large executive search firms is waning, especially with the 33-35% fees they charge (on average), which includes base wages, bonuses, and in some-cases stock.
To provide a comparison for retained vs. in-house recruitment fees, here is a key example:
If you hire an c-suite level executive at $300k base pay plus a 35% bonus and $250,000 in restricted stock units (RSUs) – vested over 3 years, you could pay upwards of $170,000+ in search fees to a large executive search firm at a 35% fee for the entire compensation package for said executive.
Using a boutique agency with expertise in executive search and experience as an in-house corporate consultant, your costs drop between 70-75%!
Average in-house executive consulting wages are $150/hour. An executive search should take (max) 250-300 hours. At 300 hours x $150/hour, your in-house consulting wages (fees) would cap at $45,000.00 vs. $170,000+, a savings of $125,000+.
As our U.S. economy trudges the hill to recovery, it will be even more important to look at corporate recruiting costs, especially for high-profile executive searches. All recruiters utilize the same tools now: LinkedIn, Indeed, corporate websites, Yahoo, Google, association journals and publications, and internal executive networks. Even those of us with pre-LinkedIn recruitment expertise have learned to leverage key tools for expeditious sourcing, recruiting and placement. Time-to-fill is of key importance to most clients.
Costs associated with finding candidates for hard-to-fill and executive level positions, including diversity candidates (gender, race, veteran, LGBTQ, etc.), should become a key budget discussion as our economy recovers and beyond! There is no need to pay huge executive recruitment fees as we move into the future. The data is obviously out there to support this expanding discussion. Executive search and recruiting budgets can also have a ‘new normal’ with a much needed positive spin.
Experience the Difference
Top Source Talent, LLC is a boutique, minority, woman-owned, small business.
We can provide you with additional information around in-house executive search consulting and cost-saving recruitment solutions.
Reach out to us today, contact us at directly at 970-562-4891.