What is the True ROI for Executive Recruiters?

When you need to hire a new leader in your organization, there are multiple ways to go about the task:

  • Network among your own peers, contacts, and acquaintances to solicit referrals and recommendations.
  • Rely on an individual in your organization to handle the search for you, counting on their resources and expertise to produce the desired result.
  • Create a search committee or task a group to communally attempt to find an acceptable hire.


  • Engage an Executive Recruiter to direct the process utilizing their experience and expertise to find, hire and retain a more ideal hire.

While each option has its merits, there are the implications and sometimes unintended consequences from each of those paths. There are two key questions to ask:

  1. “What are the true costs to hire?”
  2. “Will the process produce a high return result?”


The True Costs to Hire

The true costs to hire a new executive are often not obvious, yet certainly real. There are both direct and indirect costs to hiring that include many expense areas.

Direct Costs

Let’s examine the direct costs first:

  1. How much are the fees for Recruitment Ads and Job Postings?
  2. How much time does it take at your, or your team’s “loaded hourly rate” to do the following:
    • Write an ad
    • List them in multiple places
    • Reach out by email or phone calls to your network to ask for referrals
    • Field “x” number of phone calls from the ad at 2 to 10 minutes each
    • Initially review “x” number of resumes at 30 seconds to 2 minutes each
    • (x= 20? 50? 100?)
    • 2nd review “x” number of resumes to confirm who to screen at 2 to 5 minutes each
    • Prep time for phone screens
    • Phone screen “x” number of candidates at 15 minutes to 1 hour each
    • Prep time for interviews
    • Conduct first interviews with “x” number of candidates at 1 hour, or more each
    • Debrief with others in the organization that also interviewed the candidates
    • Conduct 2nd interviews with “x” number of candidates at 1 hour, or more each
    • Debrief with others
    • Prep time for reference checks
    • Complete reference checks at 15 to 30 minutes each
    • (Repeat the whole process if bad references)
    • Create and present an offer letter
    • Repeat the whole process if the offer is rejected


Indirect Costs

Now consider the Indirect costs that are often “opportunity costs”:

  1. What could you have otherwise accomplished with the time you spent looking and sorting?
  2. What additional business didn’t get found or serviced due to your search process?
  3. How much time did the process take?
  4. What could a new employee have produced had you had one 2 weeks or 2 months faster?
  5. What other priorities fell behind because there was no one hired yet to get it done?
  6. What other priorities fell behind because your attention was diverted to a search?
  7. How frazzled are you from the process, and how far behind are you in your “regular” job?!?


DIY hiring … are You Sure You Found and Hired the Best Candidate?

You received applications from active job seekers who happened to notice your ad. Or you reached a small pool of people that were referred to you by your network. Is there someone else that’s currently working somewhere and not actively looking, but would be a game changer for your organization? Is there someone who didn’t see your ad a better fit? Is there someone that your network wouldn’t have thought of for your organization because they didn’t understand your needs well enough? The answer is Yes to all – there are many great candidates you did not find.

Perhaps even more importantly, even though you may have found someone with the right skill set, were you able figure out whether they would actually fit well with you and your organization to be able to accomplish your goals?

The biggest cost of all is hiring the wrong candidate.  Bringing the wrong individual into your company and have them perform poorly and/or exit the organization prematurely can cost you hundreds of thousands of dollars.  You absolutely must  avoid this situation.

The Positive ROI of Utilizing a Good Executive Recruiter

Partnering with an Executive Recruiter with a successful track record will:

  • Help with defining the role and set expectations of candidates, salaries, etc.
  • Engage in effective discovery to best understand you and your organization, in order to help identify candidates that would be most effective in your authentic story.
  • Handle the sourcing, sorting, screening and present a slate of the best candidates from the widest possible pool.
  • Assessed the authentic story of those candidates and be able to convey to you the strengths and potential risk factors of each one.
  • Coordinate the process for you and help you prepare for interviews to enable you to successfully evaluate the compatibility and fit of each candidate.
  • Complete reference checks and follow-ups
  • Serve as a 3rd party mediator to make sure an offer will result in an acceptance
  • Allow you the time and emotional capital to focus on your business, not the hiring process
  • Will significantly reduces your stress!


The investment associated with an Executive Recruiter will be equivalent to all the expenses of a Do-It-Yourself search.  However, the Return from using a recruiter to help you hire your ideal executive who stays with your organization is worth at least double the executive’s salary. The Breakeven is almost immediate. This is the reason hundreds of thousands of new executives have been secured by executive recruiters because it is the most cost-efficient and effective way to hire senior leaders.

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HansenBack is an Executive Recruiting firm based in Minneapolis. We have a 30+ year track record of helping our Clients hire and retain excellent executive leaders.

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