5 reasons why companies partner with retained executive search firms

Posted 03/06/20 Team Vaco

Retained executive search firms specialize in finding top candidates for executive roles. Retained search fees are typically higher than contingency search rates, so it’s important to understand the difference between retained executive search and contingency search. In this post, we’ll cover the top 5 reasons why companies partner with retained executive search firms.

#1 — The costs of not hiring a search firm outweigh the retainer

Executive search firms charge approximately 33% of the position’s total compensation package. Companies that are thinking about engaging a search firm should carefully weigh the costs of not filling the role or the risk of filling the role with the wrong candidate. If the cost of not filling the position with the right candidate (or leaving the position unfilled) is higher than the cost of the search, then it’s time to start interviewing search firms rather than candidates.

#2 — Really good really isn’t good enough

Internal promotion, referrals, word-of-mouth, job postings, and LinkedIn can only get you so far. 

When your internal human resources experts are unable to identify the kind of visionary talent your company needs, it may be time to find a search partner that will work with your team to find the right captain. To carry our sports metaphor a step too far: if you need a game-changing leader, it’s time to reach for an all-star recruiting firm. 

“Often we identify candidates who aren’t even actively looking for a new opportunity. We’re able to use our resources and our reputation to grab the attention of A-list candidates,” says Connie Adair, managing partner for Focus Search Partners.

#3 — You need that special someone

If you’re seeking a candidate with an unusual skillset, a highly specialized background, or an unconventional career trajectory that lines up with your company’s vision for the future, then working with a search firm may be the only way to identify that rare gem. Recruiting firms can also become a valuable advisory resource as you balance your job description against the importance of skills, knowledge, experience, culture, diversity, soft skills, emotional intelligence, and drive.

“We have the expertise of identifying specific candidates within a given ecosystem. So even though we may not know them right now, we will. We have an entire team of researchers and analysts who are constantly bringing us new information and new candidates for our clients,” says Adair.

#4 — Discretion is key

It’s never pleasant, and we won’t pretend that it’s easy, but should your company need to replace an under-performing or scandal-plagued CEO while they’re still sitting at the head of the table, a retained executive search team can provide the invisibility cloak your search team needs at the start of the process. 

“Discretion is necessary for several reasons. First, if the executive finds out, he or she may become disengaged, and might even poison the waters for whoever the replacement is. Also, research shows that when executives are told, they often try to influence the selection process in a way that could cement their personal legacy rather than going by what’s best for the company” (Harvard Business Review).

Retained search firms can also help companies navigate search timing and candidate privacy, as well as protect the company’s image, reputation, and position in the stock market. 

“Discretion is very much a part of what we do every day, all day long, on the client side. And on the candidate side, I would say 1% of the candidates we place are not actively working. So the other 99% have jobs … important and very visible jobs.  Maintaining confidentiality on the candidate side is just as important,” notes Adair.

#5 — When identifying next-gen leadership becomes a priority

According to the Association of Executive Search Consultants’ (AESC) The State of Executive Talent in 2025, “Organizations are looking to the next generation of leaders to find the talent they need. ‘Developing next-gen leaders’ was chosen by business leaders as the number one business issue in the next five years, along with creating/maintaining a culture of innovation.”

If your C-suite and VP-level executives are thinking about retirement or have an eye on new opportunities, making proactive senior-level hires can help improve diversity, develop younger talent, and strengthen your corporate culture. Retained executive search teams can help you identify rising, senior-level leaders so you can begin prepping your next CEO. 

Looking for a few more reasons why companies partner with retained executive search firms? Check out our eBook, Transforming Your Leadership Team With Retained Executive Search.

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