Executive Search: The Retained Search Process

A retained executive search starts with a signed engagement and a staged fee. The firm then maps the market, approaches and assesses candidates, presents a shortlist and supports the appointment. Agree a deliverable, date and decision-maker for each stage before research begins. The fee and search examples here are fictional.

Retained, contingent or engaged

Search firms sell senior hiring in three main ways. The commercial model shapes how much work you can afford to do before anyone is hired.

Scroll the table to see all columns →

If you are moving into search from a contingent background, the biggest change is that you are selling the process as much as the result. The client is paying for coverage, judgment and discretion. The guide to starting a recruitment agency covers how the models compare as a business.

Fees, retainers and terms

Retained fees are usually set as a percentage of the appointee’s first-year cash compensation. The large listed search firms describe the norm in their annual reports: Korn Ferry says its fee is generally one-third of the estimated first-year cash compensation, plus a percentage to cover indirect expenses, and Heidrick & Struggles describes the same one-third basis, with an adjustment if actual pay is higher. Boutiques often price at or below that and split the fee into instalments. A fictional example shows how it works:

The engagement letter should cover, at minimum:

• Fee basis (what counts as first-year cash compensation, and whether signing bonuses or equity count), the instalment triggers and payment terms.
• Exclusivity, and what happens if the client hires an internal candidate or someone it found itself.
• Off-limits (hands-off) terms: which organizations you won’t recruit from because they are clients, and for how long. Heidrick & Struggles’ annual report says its off-limits period typically lasts no more than one year from the start of a search. Clients will ask; agree it in writing.
• Guarantee: what happens if the appointee leaves within an agreed period. A common approach is to re-run the search without a further professional fee, conditional on the client having paid on time.
• Cancellation: which retainers are kept if the client cancels or puts the search on hold.
• Confidentiality and data protection: how candidate information is shared and stored.

The Association of Executive Search and Leadership Consultants (AESC) publishes a Code of Professional Conduct and Professional Practice Standards. The standards say engagement terms should be in writing and cover scope, timing, fees and payment schedule, plus terms such as guarantees, off-limits and conflicts. They are a useful checklist when you draft your own letter.

Stage 1: Take the mandate

Use the briefing meeting to settle the requirements before research starts. Otherwise, you may only discover a disagreement when the client rejects the shortlist.

Interview the hiring executive and, where possible, two or three other stakeholders (a board member, a peer, the outgoing person). Write it up as a position specification and get it signed off before research starts.

Context
- Why is this appointment being made now? What happened to the last person in the role?
- What does the business need to look like in two to three years?

Outcomes
- What must this person have achieved after 12 months for you to call it a success?
- What are the first three problems on their desk?

Experience
- Which experience is essential, and which would you trade for the right person?
- Which backgrounds would worry you, and why?

Market
- Which companies would you most like to hire from? Which are off-limits?
- Is relocation possible? Is the role open to international candidates?

Proposition
- Base, bonus, equity or LTIP, and how much flexibility there is for the right person.
- What can be disclosed in the first call? Is the search confidential?

Process
- Who interviews, in what order, and who makes the final decision?
- What dates are the decision-makers available for shortlist and final interviews?

Stage 2: Map the market

A market map lists the target companies, the relevant people within them and the reason each one is on the list. It is your research plan, your progress tracker and, shared with the client, evidence of coverage.

Build it in three layers:

1. Target segments. Direct competitors, adjacent industries with transferable experience, companies at a similar stage or ownership structure, and sources (people who know the market but aren’t candidates).
2. Companies. Twenty to sixty per segment for a typical senior search. Strike off the off-limits organizations immediately.
3. Named people. For each company, the person in the relevant role and the one below them. Record the source and a one-line hypothesis about fit.

Useful research sources include LinkedIn, company websites and annual reports, regulatory filings (SEC filings in the US, the Companies House officers register in the UK), private equity portfolio pages, conference speaker lists and industry press. Your own database comes first: people you have spoken to on past mandates are often the warmest route in. The guides to candidate sourcing and Boolean search strings cover the mechanics.

Stage 3: Approach candidates and sources

Senior people get approached often. What earns a conversation is discretion, a credible reason for calling them specifically, and respect for their time. Many of the best approaches start by asking for advice rather than pitching the role.

Here is how a fictional CFO search might run through the funnel:

"Hi [Name], it's [Your name] from [Firm]. Is now a reasonable moment for two minutes,
or is there a better time today?

I'm working with a [ownership type] [industry] business in [region] on the appointment
of their [role]. I'm calling you for two reasons: your experience of [specific thing,
e.g. leading the finance function through a sale] is close to what they need, and you
know the market well enough to point me to people I should be speaking to.

I can't name the client on this call, but I can tell you about the role and the scale.
Would you be open to that, either as someone who might be interested or as a source?"

[If not interested]
"Understood, and thank you. Who are the two or three people you'd call if you were
in my position?"

[If interested]
"Let's find 45 minutes this week. Before then, is there anything that would rule
this out for you: location, timing, compensation?"

Subject: Confidential: [role] appointment, [region]

Hi [Name],

I'm leading a confidential search for the [role] of a [ownership type] [industry]
business in [region], around [revenue or headcount scale]. The board is looking for
someone who has [specific achievement relevant to them, e.g. "taken a finance team
through a PE exit"], which is why I'm writing to you.

Whether or not it's of interest personally, I'd value 15 minutes of your view on the
market. Would [day] or [day] work for a call?

Best,
[Name]
[Firm] · [phone]

Log every approach and response against the person’s record, including people who decline. A “not now, but call me next year” from a strong CFO is an asset for the next mandate. The email sequence templates and cold-calling scripts have more examples to adapt for senior audiences.

Stage 4: Assess against the scorecard

Interview every candidate against the criteria agreed at the mandate stage. A competency-based structure works well: ask for specific situations, what the person did and what happened, then probe.

For each candidate, record:

• Evidence against each criterion, in the candidate’s words where possible.
• Your assessment, kept separate from the evidence and marked as judgment.
• Motivation: why they would move, and why now.
• Compensation: current package (base, bonus, equity, pension or 401(k) matching, notice period) and expectations, tested rather than assumed.
• Risks: counter-offer likelihood, family or relocation constraints, gaps in experience.

Some firms add psychometric or leadership assessments for final candidates. If you use them, agree with the client in advance who sees the results and how they are weighed.

Stage 5: Present the shortlist report

The shortlist report is the product the client sees. It should let a busy board member understand, in ten minutes, who the candidates are, how they compare and what you recommend.

A good report has four parts:

1. Search summary. Coverage of the market map (how many companies and people, how many approached and spoken to), what you learned about the market, and any changes to the brief.
2. Comparison table. Each shortlisted candidate against the agreed criteria, with a short note rather than a score alone.
3. Candidate profiles. One to two pages each: career summary, evidence against the criteria, motivation, compensation, notice and your assessment, including the trade-offs.
4. Recommendation and next steps. Who to meet first, the questions to explore in interview, and proposed dates.

The candidate submission template has a cover-page structure that works for each profile. In Longlist, CV packs combine a branded cover page with the candidate’s CV, so every profile in the shortlist looks consistent.

Stage 6: Client interviews and references

Manage the interview process as tightly as the search. Brief candidates and interviewers before every round, debrief both within 24 hours, and keep the decision-makers’ diaries booked well in advance.

Take references before the offer, and only with the candidate’s permission. Ask the candidate for referees who saw their work at first hand: a former manager, a peer and someone who reported to them. If you want to speak to anyone the candidate didn’t nominate, agree it with them first; an unexpected “backdoor” call can damage both the candidate’s position and your relationship with them.

- In what capacity did you work with [Name], and for how long?
- What was the biggest thing they achieved while you worked together? What was their part in it?
- How would you describe their leadership style? How did their team respond to it?
- Tell me about a time things went wrong. What did they do?
- [Criterion from the scorecard]: how strong are they on this, and what's your evidence?
- Where would they need support in a role like [role] at a [scale/type] business?
- Would you hire or work with them again? Why?

Stage 7: Offer, resignation and counter-offer

Before the written offer, check how the candidate feels about the proposed package and what could still prevent acceptance. Test the package with the candidate before the client puts it in writing: base, bonus, equity, start date and any buy-out of unvested bonus or equity from their current employer.

Prepare the candidate for resignation. Senior people are frequently counter-offered, and the conversation is easier if you discussed it at the assessment stage (“If your chairman offers you the CFO title next year to stay, what would you do?”). Stay in close contact through the notice period, and keep the client in touch with them too.

When the offer is accepted, reconcile the fee to the actual compensation and issue the final invoice under the terms of the engagement letter.

Stage 8: Onboarding and the guarantee period

Check in with the appointee and the client at roughly 30, 90 and 180 days. These calls protect the placement, surface problems while they are still fixable, and often produce the next mandate: the new CFO will soon need a financial controller.

Close the search properly too. Call every shortlisted candidate who wasn’t appointed, give them useful feedback and record their preferences. They are the warm start of your next market map.

Keep the client updated every week

Long searches lose clients’ attention. A short written update every week keeps the mandate visible and protects the second retainer.

[Role] search: update, week [n] of [n]

Progress
- Market map: [x] companies, [x] people identified; [x] approached; [x] conversations
- Assessed in interview this week: [x]; total to date: [x]

What we're hearing
- [Two or three market observations: compensation, motivation, competitor activity]

Shortlist
- On track for presentation on [date] / at risk because [reason]

Decisions needed from you
- [e.g. Confirm flexibility on relocation for two strong candidates in Chicago]

Next week
- [Planned activity]

Running retained search in one system

Boutique search firms often run mandates across spreadsheets, a personal inbox and a separate CRM, and the relationship history from one search gets lost before the next. The useful test for any software is whether the research, conversations and shortlist from a search are still attached to each person when you start the next mandate.

In Longlist, a potential mandate is tracked as an opportunity with a value, owner and expected close date. Once won, the assignment is opened with the consultants working it as its members, the market map is built as a campaign from existing records and profiles captured with the Chrome extension, approaches go out as personalized sequences from your own inbox and stop on reply, and the shortlist goes to the client as a branded CV pack. After the mandate, strong candidates move into a nurture campaign with their history intact.

For the business side of search, the guide to finding clients for a recruitment agency covers winning mandates, and the recruitment agency KPIs guide shows how to measure a search desk. If you are moving an existing search database, start with the CRM migration checklist.