Pricing for tactical direct hire engagements. . .
Alexander Talbott's fee structure provides significant advantages over antiquated fee arrangements utilized in today's marketplace. Rather than operate under a traditional "percentage of first year salary" compensation mechanism, for which executive search agencies typically charge 25-30%, we utilize a fixed fee pricing structure. Prior to engagement of Alexander Talbott, a written proposal is submitted which defines a fixed fee for the search assignment. Such a system holds several advantages over a percentage system, including:
- Provides significantly improved budget control for the project
- Eliminates client concerns about reasons for presentation of candidates at the higher end of established salary ranges. Recruiting firms using a percentage model charge more money on the transaction for placing higher salaried candidates.
- Eliminates client concerns about candidate negotiations and their potential inflating impact on the recruiting fee.
Alexander Talbott operates in a "contained search" capacity relationship with our clients. However, unlike retained relationships where the structure for compensation is typically 1/3rd of the fee to engage, 1/3rd of the fee for presentation of first candidate and 1/3rd of the fee for final placement (client company exposed for 66% of the cost that cannot be recouped if a candidate is not hired), our engagement fee is approximately 25% of the total fixed cost. The remaining balance of 75% is payable upon start date of a finalist candidate. This engagement structure creates a "co-invested" financial relationship with our client, yet maintains significant emphasis for complete compensation based upon deliverable performance.