The most concrete hard cost. Unlike soft productivity estimates, agency and search fees are invoiceable and therefore the firmest number in any hiring-cost calculation. Industry-standard structures: contingency recruiting (paid only on placement) typically runs 15–25% of the hire’s first-year salary; retained executive search (paid in stages regardless of outcome, used for senior/confidential roles) typically runs 25–35% of first-year total compensation, frequently expressed as “one-third.” For a $120,000 senior hire, that is roughly $18,000–$40,000 in search fees alone — which is why this single line item can push a senior replacement well past the typical-role turnover percentages and toward the high end of the Rule of Three.

Why it scales with seniority. SHRM’s 2025 benchmarking found executive hires cost nearly 7× non-executive hires (with SHRM reporting executive cost-per-hire figures in the tens of thousands vs. roughly $1,200–$5,500 for non-executive roles, depending on the cut). Combined with the power-law performance argument (Note 3), this is the economic rationale for retained search on senior roles: the fee is large in absolute terms but small relative to the value-at-risk of a senior mis-hire.

Ontario/SMB lens. A K-W SMB filling a front-line role rarely needs an agency; the build-vs-buy decision tips toward paid search precisely for the senior, specialized, hard-to-source roles where vacancy cost (Note 4) and mis-hire cost (Note 3) are highest. Fee structures are industry-consensus; the ROI of paying them is directional (it depends on the role’s revenue attachment and the quality differential the search delivers).

Anchor: Executive search pillar. Feeds the hard-cost line of Note 1 and connects to Notes 3 & 4.