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Fees: Cost Of A Typical Retained Executive Search

Gerry Beatley, President and CEO of Beatley Palmer

The question that always comes up when discussing an employment search with a potential client is, “How much will this retained executive search cost?” Several factors come into play when determining cost:

  • The complexity of the search.
  • The level of the person sought.
  • The duties and responsibilities of the position.
  • The relative availability of potential candidates.
  • The compensation package to be offered. How does this compare to the market?
  • Whether it is a local, regional, national or international search.
  • The client’s interview process.

There are many ways in which we can help a firm – from a very targeted search to referrals of likely candidates to consultative needs based on our experience. Below, we’ve provided an example of a particular position and potential costs involved. However, Beatley Palmer would like to have a conversation with your firm and learn what your needs are, before we can provide more exact costs.

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An Example of an Open Position and Cost to Place

At Beatley Palmer, our Retained Search fees are based on a percentage of the expectant starting salary of the successful candidate. Let’s say you are a professional service firm with annual revenues of approximately 15 million and are looking to replace your current CFO who will be retiring in 6 months. The current CFO is currently making a base of $225k, plus a bonus ranging from 10-40% of his/her salary. Your current CFO has been with your organization for over 20 years and has been a significant contributor to your firm. Over the years, besides overseeing your accounting and financial department, they have also taken on the supervision of your IT and HR departments, as well as Office Administration. It is recognized that the incumbent’s compensation package has grown not just because of their contribution to the firm, but also their longevity and loyalty.

Will the new CFO be responsible for the same departments as the incumbent or will they have less responsibility? This decision will affect the experience level of the prospective CFO and correspondingly affect the compensation package. Let’s assume it is determined that the compensation range for an appropriate candidate would be a base salary of $130-170k with a bonus of up to 20%.

How much would this search cost?

Beatley Palmer’s search fees are based on a percentage of the expectant starting salary (the bonus does not enter into the computation). A non-refundable retainer is due upfront of approximately 20% of the expectant fee.

  • The typical percentage ranges from 20% to 30% depending on the complexity of the search, level of position required and commitment to hiring.
  • Based on the factors listed in the example above, this search would warrant a percentage of 26%.
  • The range of the expected starting salary for the example given above is $130-170k, or an average of $150k. Therefore, the expectant fee will be $39k. ($150k x .26 = $39k)
  • A non-refundable retainer of $7,800 would be due at the start of the engagement. ($39k x .2 = $7,800). No other monies would be due until the search is completed.
  • After the successful candidate is selected, the remaining $31,200 would be due upon the candidate’s start date.
  • Sometimes a client agrees to a salary range. In the example above, it is $130-170k. However let’s say the client really does not want to pay more than $160k and would only go to $170k in unusual circumstances. Depending on the circumstances, Beatley Palmer may “cap” the fee. In this case, the fee would be “capped” at $41,600 ($160k x .26). If a candidate were hired at a base pay of $170k, the total fee would remain at $41,600.
  • In addition, any reasonable direct expenses incurred during the search such as travel and videoconferencing will be billed at cost. If it is a local search, there are typically no direct expenses. Specific requests for criminal, credit or any other background checks must be made in writing by the client’s representatives and will be billed at cost. Usually, the client has set internal procedures for criminal & background checks and they use their own resources for these tasks.
  • If during the search, circumstances cause the client to put the search on “hold”, it isn’t a problem. The search will resume when the client indicates they are ready to continue. There will no adjustments to the original agreement. This assumes that there are no “major” changes in the position description, expectant compensation package and scope of the search. The fee may change if the expectant salary range increases or decreases.
  • Change orders are acceptable. It is not unusual for a client to refine what they are seeking during the search process. Sometimes a client will decide that they want to add additional responsibilities to the position. For example, initially a company might have decided that the new CFO would only have the Accounting & Finance department under their domain. During the process, they decide they need someone who can also oversee IT and HR. The additional cost incurred by the company would be a slightly higher fee caused by the probable higher salary multiplied by the appropriate percentage.
  • Sometimes a major change to the original specifications is required. This may be caused by market conditions, events at the company, etc.. For example, if a company was originally seeking an Assistant Controller, but decided they needed a CFO instead, then an appropriate adjustment to the fee structure would be warranted. Any previously paid retainer would be credited to the new fee structure.

Benefits Of Working With Us

When you choose Beatley Palmer for your Accounting and Financial Professional position recruitment, you’re working with trusted advisors who are committed to finding the best fit for your employment needs. We are committed to providing the following time-saving benefits for your firm:

  • Personalized service with an emphasis on learning the unique needs of your firm
  • Customized approach to assist with position descriptions and find the “perfect match”
  • Detailed research to identify experienced candidates
  • Comprehensive follow-up to ensure a smooth transition for new hires

Client Testimonials

Our CPA firm of 50 professionals was experiencing strong growth in the Tax area. We needed an additional Partner. Unfortunately, we had no one in the pipeline that was ready to be promoted for the position. We heard about Beatley Palmer from one of our friendly competitors. We retained Beatley Palmer to help us find the much needed additional partner. We had used various recruiting firms in the past but never for this level of a position. Beatley Palmer exceeded our expectations. They took the time up front to meet with all of our current Partners to not only understand our requirements but to get a good "feel" of the type of person who was successful at our firm. They really understood our corporate culture. They not only found someone who satisfied our clients’ technical and service needs, but someone who relates well to our staff.

Managing Partner - CPA firm – Northern Virginia

We needed a “shirt sleeved” Assistant Controller and we needed one fast. Our current Assistant Controller left us with little notice. Beatley Palmer met with us to understand our needs and quickly came up with a suitable replacement.

Controller – Real Estate/Property Management firm in Montgomery County MD

Our Professional Service firm was in transition. We were combining our headquarters on the west coast with our larger office in Washington DC. This involved moving the entire accounting and finance department to DC. We had no idea if the existing members of this department would want to move east. Beatley Palmer immediately began vetting various levels of accounting and finance professionals that would accommodate whatever scenario developed. It turned out no one in the department wanted to come east, but our current CFO was willing to help with the transition. Beatley Palmer guided us in the selection of our new CFO who possessed the experience necessary to not only transfer all our accounting and financial records, but had the skills to rebuild the department from scratch. Beatley Palmer help make a potential chaotic transition very manageable. 

President – Professional Service firm Washington DC
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