What is the cost of an executive search firm?
The hiring process requires defining the role, posting about the job, selecting your candidates, interviewing them, and choosing the best one. It requires time, money, and resources but when done properly it can be a rewarding experience and one that can bear fruit in the long run. When hiring for an executive or management position, being able to turn to an executive search firm that understands the recruitment process and can provide industry insights is essential when it comes to finding the right candidate.
What costs to consider when recruiting an executive?
Those uninvolved in the recruitment process should know the costs and resources required to hire for a role. It might be a one-person job in smaller companies, but at the corporate or even midsize level, the process involves a team of HR and operations people. They will work together to define the role, create the job posting, read through CVs, and organize interviews.
How long does an executive search take?
If you don’t have someone assigned exclusively to recruitment, your team will have to put aside whatever projects they were working on and dedicate their time to the hiring process. To quantify that, a manager will spend, on average, 20 hours per recruitment, which equates to 5% of their monthly productivity.
What are the actual costs associated with job posting tools and platforms?
A recruitment cost calculation often includes paying between 500€ and 1500€ per month to post on job boards. Opting for an Applicant Tracking System (ATS), skill assessment tests, and candidate databases can cost your company somewhere between 5000€ and 15000€ annually. And this doesn’t include the cost of having a vacant position, hiring the wrong person, or starting over again.
The indirect costs of an executive recruitment
Two main indirect factors can add significant costs during executive recruitment. The first is a bad hire. If the candidate does not integrate well or lacks the required skills, they will not stay in the position. This means restarting the process, along with the associated budget losses.
The second indirect cost is leaving a position vacant for too long. Every day without the right person, especially for executive or director roles, can be very expensive for a company.
« A key position, like a Sales Director, can lead to a revenue drop of up to 15% per quarter if not filled promptly. »
–
Nicolas Di Silvestro, Regional Director Grand Est
Costs vary depending on the positions being filled
The costs will also differ depending on the role and number of candidates you’re looking to hire. When hiring for upper-management/executive-level roles, your internal recruitment team may not have the tools or experience, and they will waste a lot of time and energy hiring for one position. Entrusting Fauve with the recruitment of more strategic roles will allow your recruiters to focus on familiar roles and grow their talent community for future hires.
What are the costs of a failed executive recruitment?
The recruitment process can be challenging, and while we’ve already discussed the costs of hiring someone, people don’t often pay much attention to the costs of a failed recruitment. Whether it’s because the onboarding or training was disorganized, hiring the wrong person, or poor communication, starting from zero again can have far-reaching repercussions.
A failed hire means starting all over again
Starting from scratch means going through the whole hiring process again: job postings, candidate selection, job interviews, onboarding, and training. It can increase your hiring budget by over 30% of the initial cost. In the meantime, your team is compensating for the extra workload left by the recent departure, and people are starting to ask questions about the company’s stability, which can affect the overall morale. It’s not a good look, and if the cost of one failed hire is bad enough, imagine the cost if more people start to jump ship.
The hidden costs of a failed executive hire
A failed recruitment doesn’t just refer to someone who didn’t pass the probation period. Sometimes, a restructuring or steady downward trend in profitability can lead to certain positions becoming superfluous. Terminating an executive or someone in a management position will often cost somewhere between 1 and 2 months’ salary for every year worked at the company. On a larger scale, firing an executive can look bad for the public image and, in the case of publicly traded companies, can impact stock prices and the company’s overall value.
What is the cost breakdown of an executive recruitment strategy with Fauve?
Save time on executive recruitment with Fauve
The question that’s probably on your mind is: how much does an executive search firm cost? At Fauve, we offer a tailored approach with a transparent fee structure. Our experienced consultants will always prioritize the quality of our candidates with a focus on long-term success and their ability to integrate into your company. With years of experience in the recruitment industry, we can quickly target suitable profiles and significantly reduce the costs (and lost time) associated with failed recruitment.
How much do Fauve's services cost for executive and director recruitment?
When defining the cost of an executive search firm, our pay structure offers numerous advantages. Our fees represent approximately 20-25% of the candidate’s gross annual salary. We break this down into a three-step billing system where you can decide when you pay. Roles with variable salary potential, i.e., sales positions, are covered by a fixed fee that takes this variance into consideration. All our recruiters receive fixed and collective remuneration, which removes the added pressure of a commission-based relationship.
Finding a Cost-Effective, Long-Term Recruitment Strategy
At Fauve, we understand the challenges of putting together a successful recruitment strategy. Finding a reasonable balance between time and money invested in the hiring process can seem overwhelming without the proper guidance. We have the industry knowledge and experience to bring you the executive profiles that can contribute to your long-term success while significantly reducing short-term costs.