What is executive search, and how is retained different from contingency (and from using a recruiter or hiring internally)?

The AESC — the global professional body for the field, incorporated as the Association of Executive Recruiting Consultants on December 18, 1959 and renamed the Association of Executive Search and Leadership Consultants in 2014 — defines executive search firms as advisors “retained by clients in an advisory capacity,” typically for “senior-level executive positions and board directors,” who “partner with clients to identify, assess and select the very best possible candidate” and “identify a slate of the most qualified candidates.” The work is consultative and research-driven: firms employ methodologies including competency-based interviewing, 360-degree referencing, due diligence, and sometimes psychometric assessment, and they access senior executives who are not actively job-hunting, handling that interest confidentially.

The buyer’s central distinction is retained vs. contingency:

• Retained search: the firm is engaged exclusively and paid (at least partly) upfront — commonly billed as roughly 30–35% of the candidate’s estimated first-year compensation, structured in three installments (one-third to begin the search, one-third partway through, and the final third on hiring), per industry practice described by Cowen Partners. Because they are paid to run the process, retained consultants take on few searches at once, conduct original research to find and approach passive candidates, probe for culture/role fit, and produce a short finalist slate. Best for C-suite, board, confidential, or high-impact roles where a mis-hire is costly.
• Contingency recruiting: the firm is paid only if its candidate is hired, usually on a non-exclusive basis. Recruiters work many roles at once, rely more on active candidate pools, and move fast. Appropriate for mid-level and individual-contributor roles where the candidate pool is deep and speed matters.

Two further alternatives complete the picture: hiring internally (the employer runs its own process — full control, lowest external cost, but limited reach to passive candidates) and engaged search (a hybrid: a smaller upfront commitment than full retained, more dedication than contingency). The market uses these labels inconsistently — some firms restrict clients to retained only; some present contingency and retained as differing mainly in payment when the deeper differences are exclusivity, research depth, and passive-candidate reach. Because AESC is a credible professional body but the comparative and fee claims also draw on vendor commentary, this note is labelled industry-consensus.

The Ontario/SMB lens: a KW mid-market firm hiring its first VP/C-suite or replacing a critical leader is the classic retained-search use case; routine professional hires often do not warrant it. US framing on specific salary-dollar thresholds for “when to go retained” (and the percentage fee ranges above) should be treated as illustrative industry norms, not Canadian rules. Pillar anchor: Executive search. Links down to the NUMBERS vein for cost-of-a-bad-hire and search-fee economics.