The Dollar Cost of Executive Search

One of the initial questions board members ask when faced with a leadership transition is, “How much is this going to cost?” While the response is likely to be, “That depends,” here are the kinds of expenses you might anticipate:

Search consultant – It is not unusual for search consultants to charge 25% to 33% of the first year’s salary, though some might be prepared to charge a flat fee based upon the range of services to be provided. In our case, as a Maine Association of Nonprofits (MANP) “endorsed executive search partner,” we charge 20% of the first year’s salary (plus expenses), with a minimum of $18,000, for all MANP members. It is worth your while to become a member!

Advertising – With all or most advertising conducted on-line today, advertising costs have dropped dramatically. One or two major job sites and a couple of industry specific sites might cost less than $1,000 total, with $1,500 being on the high end. One of the best deals is MANP’s Job Board, where members can post an ad for just $35!

Travel – It is standard practice to reimburse candidates for their travel expenses. You can reduce some of these expenses by conducting initial screening interviews via Skype, Zoom, or another on-line video service. For on-site interviews (ideally with finalists) it makes sense to play it safe and include in your search budget an estimate for reimbursing one or two of your candidates for flights and, potentially, the cost of rental cars and overnight stays.

Relocation – Candidates who need to relocate in order to take a senior role in your organization are likely to expect, or ask for, money or reimbursement for moving expenses and related costs. This expense might become part of your offer or emerge during your negotiations with the finalist, but it is prudent to anticipate $5,000 for a regional move and more for someone coming across the country.

While the estimated expenses described above are directly associated with the search process, it is worth noting there are likely to be other expenses that come with a leadership transition: a farewell event and gift for the departing leader, the cost of any overlap between the new and departing leaders, welcoming events, a new computer, business cards, and other office set-up. You may also find the hiring process and negotiations with the new leader result in increasing the salary and/or upgrading or adding to the benefits you offer.

A professional search consultant can help you to refine your budget, find efficiencies and cost-savings, and support you and the board through the negotiation process. Hiring a new leader requires a significant investment in time and money, so it is essential to do it right the first time!

This post, authored by Jeff Wahlstrom, is an example of the kind of advice available in the “Blog” section of our website: If you would like to inquire about assistance with your search click here for a contact form.