What Executive Search Firms Do and How a Search Works

When a senior role opens, the person you need may not be reading job ads. If the right chief financial officer or division head works somewhere else, they are probably busy doing that job and may never apply to anything. An executive search firm is the outside team you pay to find people like that, approach them discreetly and help you judge whether one of them is right for your business.

This guide explains what executive search firms do, how a retained search runs from the first meeting to the offer, what it costs and which terms to agree in writing. It also covers when a search firm is the right route for a senior hire, what your own team has to do for a search to work, and who the large global firms are.

DisclosureJake Jorgovan co-founded Alpha Apex Group, which is mentioned in this article.

What is an executive search firm?

An executive search firm recruits for senior roles on behalf of the employer: chief executives, other C-suite leaders, board directors and the heads of major functions or divisions. Korn Ferry's executive search page describes the work as identifying and recruiting "highly qualified candidates for senior roles". That goes well beyond collecting résumés: the firm learns how the organization works, defines what the role needs, finds and screens candidates and presents a shortlist.

Three features describe how executive search usually works:

• The client is the employer. The firm works for you, not for the candidates, and is paid by you.
• It goes to people who are not applying. Much of the work is research into leaders in comparable roles at other organizations and approaches to them, whether or not they are looking for a move.
• It is usually retained and exclusive. You hire one firm for the search and pay it for the work, whether or not you hire one of its candidates.

The industry is large and varied. Heidrick & Struggles' annual report for 2024 (opens in a new tab), its last as a public company, put the number of executive search firms worldwide in the thousands, from global firms to specialists in one industry or function. In its fiscal year to April 30, 2026, about 80% of Korn Ferry's executive searches were for board-level, chief executive and other senior executive and general management positions.

Retained search and contingency recruiting

Recruiters are paid in two main ways, and the difference shapes how they work. Heidrick's 2024 annual report sets out the split: retained search firms are generally paid for their work whether or not the client hires one of their candidates, and are usually engaged exclusively, while contingency firms are paid only when a candidate they recommended is placed. The AESC (opens in a new tab), the professional association whose member firms work on a retained basis, adds that contingency recruiters typically fill entry- to mid-level positions.

The AESC's comparison is written by an association of retained firms, so read its view of contingency agencies as one side's case. One of its points is practical: when several agencies work the same senior role, they may all approach the same executives, which is hard to square with a confidential search.

How a retained search works, step by step

Firms name the stages differently, but the sequence in Korn Ferry's ten-step description and Heidrick's annual report is the same in substance:

1. 1

   Agree the role and the terms

   The firm meets the people who will judge the hire (often the chief executive, board members and the head of HR) to learn what the role must achieve, how the organization works and what kind of leader will succeed there. Korn Ferry turns this into what it calls a Success Profile. The terms of the retainer are agreed before this work starts.

2. 2

   Map the market

   The firm lists the companies where suitable people are likely to work, then researches individuals in comparable roles using its own records, other databases and referrals.

3. 3

   Approach and screen candidates

   Consultants contact prospects confidentially to test whether they fit the brief and would consider a move, then interview the strongest in depth.

4. 4

   Present a shortlist

   You receive a slate of candidates with a written assessment of each one against the brief. Russell Reynolds Associates' executive search page, read in October 2026, says its process "typically delivers a shortlist of qualified candidates within eight weeks".

5. 5

   Interview and assess finalists

   Your own interviews narrow the slate to two or three finalists. Some firms add formal assessment at this point, such as Spencer Stuart's finalist assessment for CEO, CFO and other senior roles.

6. 6

   Check references and make the offer

   The firm verifies references and credentials, helps you structure the compensation package and negotiates with the chosen candidate.

7. 7

   Support the start

   Several firms offer help with onboarding and integration. Korn Ferry notes that otherwise the engagement ends when the candidate accepts.

How long it takes depends on the role and the market. The AESC's client standards (opens in a new tab) say a successful search "can take anywhere from a few weeks to several months". Russell Reynolds says it can recruit CEOs, other C-suite executives and board members "in as little as 14 weeks"; its page does not say whether that means an accepted offer or a start date, so ask which milestone a firm's timeline refers to. Heidrick's 2024 annual report gives another indication: it recognizes revenue from a search over about six months, its expected average period of performance on a search.

Image

Zoom

The approach described in this article, shown as a visual guide.

What a search costs, and the terms to agree in writing

Retained search fees are usually set as a share of the hire's pay. Korn Ferry and Heidrick & Struggles both use about a third in their annual reports, though Korn Ferry specifies cash compensation, so check how each firm defines the base (what executive search firms charge covers fees in more detail):

• Korn Ferry (annual report for its fiscal year to April 30, 2026 (opens in a new tab)): search fees are "generally one-third of the estimated first-year cash compensation of the placed candidate", plus a percentage of the fee for indirect expenses. If the hire is paid more than estimated, an "uptick" fee is billed on top.
• Heidrick & Struggles (annual report for 2024): a retainer of about a third of the role's estimated first-year compensation, plus indirect expenses set as a percentage of the retainer. It generally bills both in one-third increments over three months from the month the client accepts the contract. If actual compensation exceeds the estimate, it often bills one-third of the difference.

For a role with an estimated first-year cash package of $600,000, a one-third retainer would be $200,000 before expenses (a hypothetical example to show the arithmetic). Ask early how the firm defines compensation, since the definition decides what the retainer is calculated on. Heidrick's 2024 report describes generally billing the full retainer over the first three months, whether or not the search ends in a hire. Confirm the payment schedule in your agreement.

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Zoom

Illustrative scenario from the article; figures are assumptions, not market benchmarks.

The AESC's standards ask member firms to put the terms of each engagement in writing: the lead advisor, scope, timing, fees and payment schedule, deliverables, and terms that might include guarantees, off-limits, conflicts and data management. The checklist below builds on that list and works for any firm (for judging the firms themselves, see how to choose an executive search firm):

Guarantees vary. Heidrick's 2024 annual report says its search contracts contain a replacement guarantee: an additional search, free of charge except for expenses, if the client hires its candidate and then terminates them for performance reasons within a specified period. The AESC lists guarantees only among the terms an agreement "might include", so ask whether there is one, how long it lasts and what it excludes, such as a departure for reasons other than performance.

When a search firm is the right route, and when it isn't

Start with the internal bench. In Spencer Stuart's study of 2025 CEO appointments (opens in a new tab) at S&P 1500 companies, 60% of new CEOs were promoted from inside the company. Smaller companies looked outside more often: half of small-cap companies and 41% of mid-caps hired an outsider, against just over a quarter of large caps.

The real test is whether the hire is important, rare or sensitive enough that a dedicated research team, a confidential approach and a structured assessment are worth about a third of the role's first-year pay. For a CEO, a CFO or a leader who will change how the business runs, I think they usually are.

Your part in the search

The firm can help you define the role, but you need to explain what the new leader must change. A list of qualifications alone gives it too little direction.

On my podcast in 2020, I described one of the biggest hiring mistakes I had made, and seen others make: you meet someone you like and then work out how to fit them into the organization. "If you have a great person that doesn't fit within your organization, you're just setting yourself up for a disaster." I'd define the role and its responsibilities before thinking about any candidate, then write down what the person needs to have achieved 90 days in. In a senior search that brief does even more work: the firm builds its target list and its assessment from whatever you give it.

Before the first meeting with a firm, agree among yourselves:

• What the leader must achieve in the first year, and what success looks like at 90 days.
• What has to change in the team or the culture, and what must be kept. Ask finalists how they would make those changes while keeping what already works.
• Who decides, who interviews and in what order, so finalists meet a consistent panel.
• How you will support the new leader in the first months. The AESC's standards expect member firms to be available to help with onboarding and integration, but the work of making a new leader effective sits with you.

Questions buyers ask about headhunters

Will the firm later recruit our own people?

This is governed by "off-limits" terms. Heidrick's 2024 annual report says it may hold off recruiting a client's employees for a set period, typically no more than a year from the start of a search. The scope depends on how long and how often the client has worked with it. Agree the period, the people covered and any affiliates in the contract. A large firm that serves many of your competitors will also have off-limits commitments to them, which can narrow the pool it can approach for you, so ask about that too.

Can the search stay confidential?

Yes, and it is one of the main reasons to use a firm. Korn Ferry points out that a firm can source candidates discreetly, for example when you are hiring while the incumbent isn't planning to leave. AESC members commit never to share client or candidate information beyond the scope of the assignment.

Does a search firm just want a quick placement?

A retained firm is paid for the search, so its fee does not depend on getting any one candidate hired. One fee term does move with the outcome: both annual reports describe an uptick, an extra fee when the hire is paid more than estimated, so agree the compensation estimate before the search starts. You still need to hold it to the brief: agree the criteria at the start and ask to see how each shortlisted candidate was assessed against them.

Who pays the search firm?

The employer. The firm is engaged by the client organization, and its retainer and expenses are billed to that client.

Five large global firms

The five firms below are global firms that recruit at board and C-suite level. Their own sites and annual reports describe their search work and scale as follows. Many other firms specialize in a single industry, function or market; this comparison of executive recruiters and the related guides below cover firms by the type of hire.

Which part of your next senior hire could you describe in writing today, and which part are you hoping the search firm will work out for you?