Whether you are a board member, C-suite executive, or division leader, a vacancy in your area can quickly throw you into the additional role of hiring manager. This added responsibility can become a full-time job of its own without the right help, especially for executive-level positions. That’s where the recruitment expertise of a retained executive search firm can convert the sense of overwhelmingness into strategy.
A retained executive search firm brings the experience, market savvy, and extensive networks to expedite the process of identifying and attracting the right leaders.
This guide explains what retained executive search is, how it differs from other recruitment methods, and why it offers a significant advantage for hiring managers tasked with filling critical leadership roles. Discover when and how to engage an executive recruiter so you can focus on your primary responsibilities while securing the high-quality leadership your organization needs.
Why Do Hiring Managers Partner with Retained Executive Recruiters?
Today’s executives require skills beyond their leadership and subject-area mastery, including the ability to navigate digital transformation and global market volatility, while possessing the emotional intelligence to integrate with their organizational culture effectively.
Busy hiring managers already have a full plate and, as McKinsey & Company points out, most companies aren’t very skilled at finding and keeping the right talent.
What is Retained Executive Search?
Retained executive search is a comprehensive and exclusive partnership between a specialized search firm and an organization seeking top-tier talent. Unlike other recruitment methods, retained search operates on an exclusive basis with a contractual commitment and upfront payment structure.
At its core, retained search is defined by several key characteristics:
- Exclusivity: The client works with only one search firm, and the search firm dedicates significant resources to that specific search.
- Comprehensive approach: The search firm manages the entire recruitment process from initial consultation through onboarding.
- Strategic partnership: Rather than a transactional relationship, retained search establishes a consultative alliance focused on long-term success.
- Access to passive talent: Retained firms specialize in approaching high-performing executives who aren’t actively job-seeking.
- Market intelligence: Executive search firms provide valuable insights into compensation trends, the competitive landscape, and talent availability.
Retained search is generally the most effective form of search for executive-level positions, which require extensive resources, comprehensive vetting, and an appropriate level of confidentiality and discretion. In addition, the financial investment of a C-suite or senior leadership position often warrants the specialized process that executive search brings to promote long-term retention of a qualified leader.
Retained Search vs. Other Recruitment Methods
Retained search isn’t the only form of executive recruitment. Some companies opt to utilize their internal human resources team to conduct hiring searches. When choosing an external executive search partner, you will encounter firms that work on a contingency basis, as well.
Below, we compare these three recruitment methods to help you uncover which model might work best for your search.
Retained Search
An exclusive partnership with a specialized firm for personalized executive search and placement.
Characteristics of Retained Search
| Strategic Factor | Retained Search Approach |
| Business Model | Exclusive partnership with dedicated resources |
| Payment Structure | Retainer paid upfront with installments throughout the process |
| Talent Pool Access | Extensive reach, including passive candidates not actively job-seeking |
| Process Depth | Comprehensive vetting, assessment, and cultural fit evaluation |
| Target Positions | Executive and leadership roles ($150k+) |
| Timeframe | Typically, three months to one year for executive placement |
| Commitment Level | High mutual commitment between client and search firm |
| Market Intelligence | Access to comprehensive compensation and talent environment insights |
Retained Search Benefits for Hiring Managers
- Time savings: Reclaim valuable time in your schedule while maintaining control of final decisions
- Exclusive networks: Access high-performing executives not visible on job boards
- Strategic guidance: Gain professional consultation on position requirements and competitive compensation
- Strict confidentiality: Ensure discretion when replacing underperforming leaders or creating new positions
- Balanced partnership: Delegate the most time-consuming aspects of recruitment while staying informed and active in the process
- Professional representation: Present your organization professionally to candidates through expert representation
Considerations for Executive Hiring Managers
Retained search offers a number of advantages, particularly in reducing the time-to-hire traditionally required for high-level roles. While requiring an upfront financial investment, this commitment ensures priority attention and resources, streamlining processes through proven methods and extensive expertise. For hiring managers under intense pressure to fill positions quickly or working with limited budgets, retained search delivers faster results than fragmented approaches and avoids the delays of a firm juggling competing priorities.
Contingency Search
A recruitment approach where firms are paid only upon successful candidate placements, typically focusing on mid-level management positions with standardized skill requirements.
Characteristics of Contingency Search
| Strategic Factor | Contingency Search Approach |
| Business Model | Transactional relationship with non-exclusive arrangements |
| Payment Structure | Payment only upon successful placement of a candidate |
| Talent Pool Access | Primarily active job seekers and database candidates |
| Process Depth | Less rigorous vetting, emphasis on speed to placement |
| Target Positions | Mid-level management and specialized roles ($50k-150k) |
| Timeframe | Faster process, typically one to two months |
| Commitment Level | Limited commitment with a focus on quick results |
| Market Intelligence | Basic market information focused on active candidates |
Contingency Search Benefits for Hiring Managers
- No upfront cost: Pay only when a position is successfully filled
- Speed to hire: Receive candidate resumes quickly, often within days
- Multiple options: Work with several recruiters simultaneously to expand reach
- Flexibility: Maintain parallel internal recruitment efforts while using contingency services
- Volume capability: Fill multiple similar positions efficiently at the same time
- Budget control: Manage recruitment costs with a predictable, success-based fee structure
Considerations for Executive Hiring Managers
For executive-level positions, contingency search often falls short in providing the depth of candidate assessment and market intelligence critical for strategic leadership roles. The focus on speed and transactional relationships typically limits access to passive candidates—often the most qualified executives—and may result in candidates who meet technical requirements but lack the leadership qualities and cultural alignment necessary for executive success.
Internal HR Recruitment
Utilizing your organization’s existing human resources department to identify, attract, and hire candidates through internal processes, job boards, and company networks.
Characteristics of Internal HR Recruitment
| Strategic Factor | Internal HR Approach |
| Business Model | In-house initiative aligned with company policies and culture |
| Payment Structure | Internal overhead costs, typically salaried HR team members |
| Talent Pool Access | Limited to company’s network and those responding to job postings |
| Process Depth | Variable depending on resources, often standardized processes |
| Target Positions | Variable, often lower to mid-level positions |
| Timeframe | Variable, often extended due to competing priorities |
| Commitment Level | Internal prioritization based on organizational needs |
| Market Intelligence | Limited to publicly available information |
Internal HR Benefits for Hiring Managers
- Deep company knowledge: Leverage HR’s understanding of company culture and requirements
- Direct communication: Maintain consistent interaction with the recruitment team
- Process control: Influence and adjust the hiring process as needed
- Cost efficiency: Utilize existing resources without additional agency fees
- Internal mobility: Identify and promote internal talent for leadership development
- Recruitment consistency: Apply standardized evaluation criteria across positions
Considerations for Executive Hiring Managers
When hiring for executive positions, internal HR departments typically struggle to access the level of specialized networks, competitive intelligence, and confidential reach required to identify and attract top-level leaders.
Without the partnership of an executive search firm, most internal teams have limited bandwidth to focus exclusively on executive searches while managing other HR priorities, and rarely possess the industry-specific expertise needed to assess executive-level competencies and leadership potential thoroughly.
How Does Retained Executive Search Work? The Process Explained
The retained search process begins with the firm learning the unique story of the organization and discovering what an ideal placement looks like. From there, the process moves through a formalized, yet customizable approach designed to identify and secure ideal executive talent:
Initial consultation The firm and client discuss the organization’s needs and the firm’s capabilities and approach. Once the parties are ready to proceed, a formal agreement is established. |
Fee structure and contract The firm’s fees are typically based on a percentage of the executive’s first-year total compensation, with an initial retainer and follow-up payments at agreed-upon milestones. The contract outlines exclusivity, confidentiality, scope, timeline, and guarantees. |
Comprehensive discovery The firm conducts in-depth meetings to gain a well-rounded understanding of the organization’s history, culture, challenges, and objectives. This is formulated into detailed profiles of the role and ideal candidate. |
Strategy development The search firm creates a comprehensive roadmap for the search, including the scope, research methodology, and timelines. |
Market research and candidate identification The firm maps the market, leverages its network of contacts, and conducts targeted outreach to identify potential candidates, including passive talent not actively seeking new roles. |
Candidate evaluation and assessment Shortlisted candidates undergo an extensive evaluation through structured interviews, competency assessments, and reference checks, resulting in detailed reports that include the firm’s observations and recommendations. |
Client interviews and selection The search firm arranges and manages interviews between shortlisted candidates and key stakeholders, providing guidance and feedback throughout the process. |
Offer negotiation and search closure Once the preferred candidate is identified, the firm handles due diligence, negotiations, and presents the final offer. |
Onboarding and transitional support Post-hire, the firm provides leadership transition assistance to ensure a successful integration. |
The typical timeline for a retained executive search ranges from three months to one year, with complex or global searches requiring the most extended timelines to ensure quality outcomes.
When to Use Retained Executive Search
Certain scenarios particularly benefit from the retained search approach –
- C-suite and board positions: When hiring for roles that significantly impact company valuation and strategic direction, such as Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Technology Officer (CFO), or any other C-suite or senior leadership roles, the depth and reach of retained search is invaluable.
- Confidential replacements: When discretion is paramount, such as replacing an underperforming executive or preparing for a significant organizational change.
- Specialized or niche roles: When the talent pool is limited and specialized expertise is required, retained firms can leverage their networks to identify qualified candidates.
- New market entry: When expanding into unfamiliar territories or launching new divisions requiring specialized leadership.
- Succession planning: When developing long-term leadership pipelines, the strategic partnership of retained search adds substantial value.
Warning signs that indicate the need for professional search assistance include repeated failed attempts to fill a position, limited internal networks within the relevant industry, or positions that require a transformation that exceeds the current organizational capabilities.
From an ROI perspective, you should weigh the investment of a retained search against the cost of a failed executive hire or prolonged vacancy of a critical position.
How to Select the Right Executive Search Firm
When seeking the best executive search firm for your needs, be prepared to conduct thorough research. Choosing the right search partner requires careful evaluation of several key factors:
- Industry expertise: Look for firms with a proven track record of success in your specific market and sector.
- Geographic reach: Ensure the firm has capabilities matching your search scope (regional, national, or global).
- Search methodology: Evaluate their approach to candidate identification, assessment, and vetting.
- Track record: Request specific examples of successful placements in similar roles and references from past clients.
- Consultant experience: Meet the specific professionals who will handle your search to assess their expertise and chemistry with your team.
When selecting a search partner, consider firms with specialized industry expertise and proven success. Millman Search has delivered winning executive leadership solutions to companies in the commercial real estate, retail, and hospitality sectors. Our recruiters bring insider industry knowledge to the search, allowing hiring managers to focus on their core responsibilities while we execute a thorough search. We have made over 4,000 successful placements because we stand by our hiring manager partners, ensuring they never navigate complex executive recruitment challenges alone.
Key Questions to Ask Potential Search Partners
As part of your evaluation of executive search firms, ask questions specific to your industry and the vacant position. Other important questions to ask include:
- “How long has your firm specialized in our industry?”
- “What is your completion rate for similar searches?”
- “What percentage of your placements remain in their positions beyond two years?”
- “How do you approach candidate assessment and cultural fit?”
- “What is your typical communication cadence during a search?”
Red flags include vague answers about methodology, excessive promises about the timeline, or reluctance to provide references.
Maximizing Value from Your Retained Search Partnership
As a hiring manager, you gain the most benefit from a retained search partner when you ensure you are getting the most out of what they bring to the hiring process. To achieve optimal results:
- Set clear expectations: Provide detailed information about the organization’s requirements, challenges, and define the ideal outcomes.
- Be responsive: Communication is positively essential. Expect and provide timely feedback on candidates, maintaining open communication throughout the process.
- Position your organization effectively: Help the search firm articulate your company’s qualities and unique value proposition to attract top talent.
- Trust the process: Be an active participant in the process, but allow the search firm to use the depth and breadth of its expertise. You can maintain appropriate oversight and control while letting hiring experts do what they do best.
- Prepare for integration: Develop a comprehensive onboarding plan to ensure the new executive’s success.
Common pitfalls include rushing the process, expanding requirements mid-search, or failing to adequately prepare for candidate interviews.
Success should be measured not just by the position filled, but also by the executive’s retention, performance, and long-term impact.
Final Thoughts
Hiring managers have numerous responsibilities beyond filling vacancies. Still, they must dedicate time, energy, and resources to securing the right talent. Recruitment is a time-consuming and critical business decision, especially when executive positions are involved, as leadership roles have long-ranging and wide-reaching impacts on their organizations.
Retained executive search is a strategic hiring move with benefits beyond those of traditional recruitment methods. By accessing the most qualified candidates, sharing critical market intelligence, and delivering expert support and consulting throughout the search, retained search firms are valuable partners in securing high-performing leadership.
As organizations face increasing competition for top executive talent, the role of executive recruiters remains critical. Many businesses partner with retained executive recruiters like Millman Search because the quality of leadership they provide can have a profoundly positive impact on business outcomes and organizational culture for years to come.
FAQs
How much does retained executive search typically cost?
Retained search firms typically charge a percentage of the placed executive’s first-year total compensation (including base salary, guaranteed bonuses, and sometimes equity).
This fee is usually paid in installments: an initial retainer (⅓), a progress payment at an agreed milestone (⅓), and a final payment upon successful placement (⅓).
While this represents a significant investment, the return on securing exceptional leadership often justifies the cost when compared to the impact of a poor hire or extended vacancy.
How long does a typical retained executive search take?
From firm engagement to accepted candidate offer, the standard retained search typically requires three months to one year.
This timeline can vary depending on the position’s complexity, market conditions, and geographic scope. Global searches or highly specialized roles may require additional time to ensure a comprehensive talent assessment.
While speed is important, quality should remain the primary focus — rushed searches often lead to suboptimal outcomes.
What guarantees do retained search firms typically offer?
Most reputable retained search firms offer placement guarantees ranging from three months to one year. If the executive leaves within this timeframe, the firm will conduct a replacement search at no cost or a significantly reduced cost.
Most guarantees do not cover departures due to organizational restructuring or similar circumstances.
Beyond formal guarantees, the best firms demonstrate their commitment to success through comprehensive support throughout the search and integration process.
