A CFO with a £200,000 base walks into your pipeline. At 25%, that's £50,000. Do you know exactly what to put in your proposal — the split, the payment terms, the exclusivity clause, and how to defend the rate if the client pushes back? Placement fees are the commercial foundation of executive search. Getting them right is not a negotiation skill. It's an arithmetic and positioning problem.
This guide covers how executive search fees are structured in 2026, typical rates across UK and DACH markets, a worked calculation table for common role types, and how to present fees in a way that holds when the client raises an eyebrow.
How Executive Search Fees Are Calculated
The standard calculation is straightforward: fee = base salary × percentage. The percentage depends on role seniority, mandate type (retained vs contingency), market geography, and the agency's positioning. What varies considerably is what counts as "base salary" — whether it includes target bonus, car allowance, or long-term incentive plan components is something to specify explicitly in the engagement letter before the search begins.
Most UK-based executive search firms anchor on base salary only, with a note that if total compensation or on-target earnings form the primary comparison basis for the role (common in sales leadership and PE-backed environments), the calculation methodology should be agreed upfront. Ambiguity here creates disputes at offer stage — the worst moment for a fee conversation.
Retainer vs Contingency: When Each Model Applies
The choice between retained and contingency search is not a matter of preference — it's a function of mandate type, seniority, and the commercial relationship between agency and client.
Retained search is the standard for C-suite and board-level mandates. It signals exclusivity, investment, and accountability. The client pays because they are buying a dedicated process, not a speculative outcome. The agency delivers because they have committed resources from day one. This model protects both parties: the agency isn't competing with other firms on the same brief, and the client gets structured reporting through defined phases.
Contingency makes sense for mid-management roles where multiple agencies can reasonably run parallel searches, where the hiring timeline is flexible, and where the client's primary concern is access to a wider candidate pool rather than a structured executive process. It also suits agencies building new client relationships — a successful contingency placement is often the door to a retained mandate on the next search.
| Criteria | Retained Search | Contingency Search |
|---|---|---|
| When fee is paid | In thirds: engagement, shortlist, placement | On successful placement only |
| Exclusivity | Yes — single agency | Usually non-exclusive |
| Role seniority | C-suite, board, VP and above | Mid-management, specialist roles |
| Typical fee % | 25–33% of base salary | 15–25% of base salary |
| Agency commitment | Dedicated team, defined deliverables | Best-efforts, no guaranteed output |
| Client risk | Upfront cost without guarantee of hire | No cost if no placement |
| Off-limits clauses | Standard — agency won't source from client | Negotiated case-by-case |
| Guarantee period | Usually 90–180 days | Usually 30–90 days |
"A retained mandate is not a premium product for large clients — it's the correct commercial structure for any search where the agency needs to commit real resources. Framing it as a premium creates the wrong conversation."
Typical Fee Percentages by Market
Fee norms vary by geography and sector. The ranges below reflect market practice as observed across agency engagements in 2026, drawing on data from Korn Ferry's executive search insights and Heidrick & Struggles market data.
UK market: C-suite and board roles typically command 25–33%. Senior director and VP-level roles sit at 20–28%. Mid-level management searches on contingency basis run 15–22%. London-based financial services and private equity searches tend toward the upper end of each range.
DACH market: Fee norms in Germany, Austria, and Switzerland run slightly tighter — typically 20–28% for C-suite retained mandates. The BDU (Bundesverband Deutscher Unternehmensberater) publishes annual benchmarks for the German consulting and executive search market which are the standard reference point for DACH fee negotiations.
One structural difference in DACH: minimum fee floors are more commonly stated in engagement letters. A typical floor for a senior retained search in Germany is €15,000–20,000, regardless of base salary level. This protects against searches for candidates with modest salaries where the percentage would otherwise produce a fee insufficient to justify the work involved.
Worked Example: Placement Fee Table
The table below shows actual placement fees across four common executive search scenarios. These are illustrative figures based on market-standard rates.
| Role | Base Salary | Fee % | Placement Fee | Retained Split (thirds) |
|---|---|---|---|---|
| CFO | £200,000 | 25% | £50,000 | £16,667 / £16,667 / £16,667 |
| VP Sales | £150,000 | 22% | £33,000 | £11,000 / £11,000 / £11,000 |
| COO | £280,000 | 25% | £70,000 | £23,333 / £23,333 / £23,333 |
| Managing Director | £350,000 | 30% | £105,000 | £35,000 / £35,000 / £35,000 |
A few things to note from the table. The CFO and COO both use 25% despite the salary difference — this reflects market-standard positioning for finance and operations leadership rather than a strict relationship between salary and rate. The MD at 30% reflects both seniority and the premium that retained boutiques command for mandates requiring CEO-level stakeholder management.
VP Sales at 22% is slightly below the CFO rate — a common market dynamic where sales leadership roles attract more agency competition and therefore slightly lower rates in practice, despite the commercial criticality of the position.
How to Calculate and Present Fees in a Proposal
The fee calculation itself takes seconds. The presentation work is what takes time — and what determines whether the client accepts the rate or negotiates it down. The SHRM executive compensation benchmarks and Gem's 2026 recruiting benchmarks are useful supporting references when presenting rate rationale to clients who challenge market norms.
Three elements that should appear in every executive search proposal fee section:
1. The calculation methodology: State explicitly that the fee is calculated on base salary only (or total comp, if that's the agreed basis), and give the specific % and resulting figure for the anticipated salary range. Don't leave the client to calculate it themselves — they will use a lower salary assumption.
2. The payment schedule: For retained searches, invoice dates tied to deliverables, not calendar months. First invoice at engagement (with signed letter). Second at shortlist delivery (with CVs submitted). Third on placement (first day of employment). Include the VAT treatment explicitly for cross-border engagements.
3. The guarantee clause: The standard is a rebate or free repeat search if the placed candidate leaves within the guarantee period (90–180 days is typical). Specify the conditions: voluntary departure only, or includes dismissal? Covers a replacement search, or a partial fee rebate? Define it in writing before the search begins.
"Clients who push back hardest on fees are almost always clients who don't understand what they're buying. The fee presentation is where you establish that you're selling a process, not a person."
When Clients Push Back on Fees
The most common objections to executive search fees are: "that's higher than what we paid before," "we can find someone on LinkedIn ourselves," and "can you do it at 20%?" Each has a direct answer.
On market comparisons: ask what the previous search cost them including internal time, the cost of any mis-hires, and how many months the role was vacant during that process. The all-in cost of a bad process is almost always higher than the fee they're comparing against.
On self-service sourcing: the cost of a LinkedIn Recruiter licence plus the internal time of a senior HR business partner running a CEO-level search, over three to four months, approaches the agency fee. And the access to passive candidates who are not responding to LinkedIn messages — which is most of the best candidates at senior level — is not replicable internally.
On rate negotiation: the position that holds most reliably is "this is our rate for this level of mandate." Discounting immediately signals that the rate was arbitrary. If you want to create value for the client, offer an extended guarantee period rather than a lower rate — the commercial exposure is capped and the signal it sends about your confidence is powerful.
Tools That Support Fee Presentation and Pipeline Management
The strongest executive search proposals include visual pipeline stages, candidate tracking visibility, and clear reporting cadences. Agencies running retained searches on platforms with client portals — where hiring managers can see shortlist progress, interview schedules, and status updates in real time — reduce the number of "where are we?" calls that fragment the search process.
For agencies evaluating platforms that support the full retained search process from engagement letter to placement, the executive search software comparison covers which ATS platforms have the strongest client-facing features alongside the internal pipeline management tools that matter for retained work.
Yena includes a shortlist presentation tool that generates client-facing candidate profiles from ATS data — reducing the manual work of building the written shortlist deliverable that triggers the second retained invoice. See the current feature set at app.yena.ai.
For the full ATS evaluation covering executive search use cases: ATS platforms for executive search agencies, and the pitch-side tooling covered in the guide to winning executive search pitches with a presentation generator.