What Does Executive Search Cost?

Executive search fees in the retained model are typically 20 to 30 percent of the first-year total compensation of the placed candidate. For a VP of Engineering at $250,000 base with a $50,000 bonus target, the fee would be in the range of $60,000 to $90,000.

This number often creates sticker shock for companies that haven't used retained executive search before. It is useful to understand what that fee covers, what it doesn't, and how it compares to the alternatives — including the alternatives that don't appear on any invoice.

What the fee covers

Brief development. The intake process that produces a well-defined brief — typically four to six hours of time from experienced search professionals, followed by a written document reviewed and agreed with all stakeholders — is real work that shapes the quality of everything that follows.

Market mapping. A thorough market map for a VP or C-suite role involves researching 100 to 300 potential candidates: identifying who holds relevant roles in relevant companies, assessing their backgrounds from publicly available information, and qualifying the list down to a sourcing pool of 30 to 60 people. This is several days of focused research work.

Outreach and candidate management. Personalised outreach to 30 to 60 candidates, followed by responses, qualification conversations, and the communication management that keeps candidates engaged throughout a 30 to 45 day process, is a significant time investment — particularly for candidates who require multiple conversations before they're ready to engage with the opportunity seriously.

Candidate evaluation. Each candidate who advances to shortlist status receives a thorough assessment: a structured interview, a written brief presented to the hiring team, and context from the relationship the search firm has built with the candidate. For three to five shortlisted candidates, this is several full days of work.

Reference checking. A thorough reference process — reaching beyond the candidate's reference list, conducting structured calls, and triangulating across multiple sources — takes four to eight hours per finalist candidate.

Offer management. The offer stage requires managing communication between the hiring company and the candidate, often navigating competing offers, compensation negotiations, and the specific concerns that arise when a strong candidate is deciding between multiple options.

A replacement guarantee. Most retained search firms, including Majhi Group, offer a replacement search at reduced or no fee if the placed candidate leaves within the guarantee period. This is real risk being absorbed by the search firm — and it reflects the firm's confidence in the quality of its process.

What the fee does not cover

The fee does not cover the hiring decision. That remains with the company. The search firm surfaces, assesses, and presents candidates. The decision about who is right for the role belongs to the people who will work with that person every day.

The fee also does not guarantee a successful outcome — it guarantees a thorough process. A thorough process produces a better outcome than an unthorough one the large majority of the time. It does not produce perfect information or eliminate the inherent uncertainty of any people decision.

How to think about the total cost

The 20 to 30 percent fee looks different when compared against the full cost of the alternatives.

Internal search at VP level. Running an executive search without a search firm requires someone with significant sourcing capability, the market knowledge to identify the right candidates, the seniority to approach them credibly, and the time to manage the process from brief to close. Most companies don't have all of these in one person. The internal search that takes six months and produces a poor hire has a total cost — in recruiter time, in the cost of the unfilled role, in the time of every internal stakeholder involved in a process that didn't close — that is significantly higher than the search firm fee.

Contingency search at this level. Contingency recruiters for VP and above typically charge 20 to 25 percent of first-year compensation. The fee is similar. The process is different: non-exclusive, incentivised toward speed over quality, and without the upfront investment that produces a thorough brief and a comprehensive market map. The contingency search that closes in six weeks on the right person costs about the same as retained. The contingency search that runs for four months and produces a wrong hire, followed by a six-month replacement process, costs significantly more.

An executive who leaves in 12 months. The specific cost of a VP who leaves within a year varies by role and company, but typically includes: the search firm fee for the original hire, the cost of the role being underperformed or unled during the tenure and after the departure, the time of every executive involved in the process of managing the performance issue and eventual transition, and the cost of the replacement search. For a VP-level role, this total routinely exceeds $500,000.

The retained search fee, evaluated against these alternatives, is the cost of a process that is structured to avoid the most expensive outcomes.

Majhi Group's fee structure

Majhi Group charges 20 to 25 percent of first-year total compensation, structured as: one-third at signing, one-third at shortlist delivery, one-third at placement. The replacement guarantee is 90 days. Exclusivity is required.

The fee reflects the engagement model: a fully retained process from brief to close, with experienced search capability at every stage.

Request an assessment to discuss fee structure and scope for a specific search.