Executive search fees in construction get compared on one number, the percentage, and settled by three others: when each payment falls due, which pay the percentage is applied to, and what voids the guarantee. Read those three terms before you compare quotes. Two agreements with the same headline can produce very different bills.
Every executive search firm will quote its percentage on the first call. Few volunteer the date the first invoice falls due, and on a construction search that date decides more about what you pay than the percentage does. The percentage is the part of executive search fees designed to be compared. The rest of the agreement is designed to be signed.
Picture two agreements for the same project executive search at a Dallas general contractor. Same percentage, same seat. Under the first, nothing is owed until the new hire starts. Under the second, a share is invoiced the week the search opens, and it stays owed if the owner delays the project that created the seat.
Neither agreement is wrong. They are different products wearing the same number, and no list of market percentages will tell you which one you are buying.
What do executive search fees actually pay for?
Executive search fees pay for a process, not a stack of résumés: defining the seat, mapping who holds comparable roles, approaching people who are not looking, assessing them against the work, and closing the offer. The percentage prices the outcome. The agreement decides what you owe for the process if the outcome never arrives.
That process is expensive for a reason construction principals already feel. Of the 1,041 contractors answering the salaried-hiring question in the 2025 AGC workforce survey, 91.7 percent reported difficulty filling salaried positions. The chief estimator you want is pricing a bid right now. The project executive you want is running a job that is going well, and nobody who is running a job that is going well spends the evening on a job board.
So most of the work in a senior construction search is reaching and persuading people who were not planning to move. That work happens whether or not anyone is hired, and every agreement has to decide who carries it when the search fails. The answer is written in a single clause, usually on page two. A candidate pays for none of it, which is the subject of who pays headhunters.
When do executive search fees fall due?
It depends on the model. Contingency is owed only when the new hire starts. An engaged search takes a commitment payment at the outset, typically credited against the final invoice. A retained search bills in stages, commonly at commencement, shortlist and start, and the early stages stay owed if no one is hired.
| Model | What triggers a payment | Owed if the search is called off | Owed if you hire from elsewhere |
|---|---|---|---|
| Contingency | The new hire starts | Nothing, in most agreements | Nothing, unless the firm introduced the person |
| Engaged | A commitment payment at signing, then the start | The commitment payment | Read the exclusivity clause |
| Retained | Staged invoices from commencement onward | Every stage already invoiced | Can be the full amount under an exclusive mandate |
The payment trigger allocates risk. Contingency puts the whole cost of a failed search on the recruiter, which is exactly why a contingency desk works the candidates most likely to close quickly: the incentive rewards speed, and fit is somebody else’s problem after the start date. Staged billing moves early cash onto the client and buys commitment and exclusivity in return. The model comparison itself is covered in contingency or retained, and what each model’s money pays for is in what a construction search costs.
Construction adds a wrinkle generalist agreements rarely anticipate: the seat often depends on a project. A project executive search tied to an Atlanta healthcare job that has been awarded but not yet released is a search whose reason to exist can slip by a quarter. Under staged billing, the commencement invoice does not slip with it. Ask what you owe if the project behind the seat is delayed or cancelled, and if the answer is everything already invoiced, ask for a suspension clause before you sign. Terms worth negotiating sets out how that clause and its neighbors should read.
Then there is the number the percentage gets multiplied by.
What pay is the percentage applied to?
Whatever the agreement defines, and definitions vary: base salary alone, first-year cash including contractual and signing bonuses, or total compensation with allowances and benefits folded in. The same percentage on a wider base is a larger invoice. Get the definition in writing before you compare two quotes side by side.
Our note on the fee base works through those definitions line by line, so this section stays on the part construction makes unusual: the signing bonus. Senior construction leaders are often paid a meaningful year-end bonus, so a chief estimator who resigns in the fourth quarter walks away from money already half earned. The usual fix is a signing bonus that buys out the forfeit, and the IRS Publication 15 treatment of bonuses as supplemental wages is a reminder that the candidate experiences it as pay. Many agreements count it in the base. Know before the offer goes out whether yours does, because the buyout is negotiated late and fast, and nobody reopens the search agreement at that point.
For scale, federal wage data puts the national median for construction managers at $114,990 and for cost estimators at $78,740, as of May 2025. Leadership seats in Houston or Nashville sit well above those medians, which is why a loose definition costs real money. Which leaves the clause that decides whether any of it comes back.
What voids a search guarantee?
Many guarantees are replacement-only, run for a fixed window from the start date, and carry conditions: the invoice paid on time, the role unchanged, and the departure not caused by redundancy or restructuring. Breach one and the guarantee is gone, usually without anyone mentioning it until you try to claim.
This is where contractors actually lose money on a search, and it is rarely the recruiter acting in bad faith. It is a condition nobody read, triggered by an ordinary business decision six weeks after the start. The common ones:
- Late payment. Many guarantees only begin once the invoice is paid in full, so a disputed invoice can quietly run out the window.
- A changed role. Moving the new hire from preconstruction into operations, or splitting the seat across two divisions, can count as a material change.
- Termination other than for cause. A lost bid that thins the backlog, or a cancelled project that removes the seat, often voids the guarantee outright.
- Filling it yourself. Some agreements void the replacement if the seat is filled from another source while the replacement search is running.
- No refund. Replacement-only means no money comes back. If the second search also fails, the original invoice stays paid.
Construction already knows what happens to a term agreed on a phone call: the risk lands on whoever has to prove, months later, what was said. A guarantee described generously on a sales call and narrowly in the agreement is the same risk transfer, and the agreement wins. Read the conditions while you can still negotiate them, not when you need them.
There is one more reader for this paperwork, and on federal work it is an auditor.
Can a federal contractor recover executive search costs?
On federal work priced under the cost principles, often yes. FAR 31.205-34 lists costs for employment agencies among allowable recruitment costs, not in excess of standard commercial rates. That turns the agreement and the invoice into audit evidence, so both should name the position and the terms plainly.
The question matters most on cost-reimbursement and other flexibly priced work, where indirect costs are reviewed line by line. A heavy civil contractor carrying federal work, or a construction-practice CPA preparing an indirect cost submission, will want an agreement that reads like a standard commercial arrangement: a defined base, a stated trigger, a guarantee with written conditions. An agreement that bills on an undefined total-compensation number is harder to explain to anyone checking it.
The same provision makes help-wanted advertising unallowable when it does not describe specific positions. A confidential search avoids that question entirely, because there is no advertising to classify: the seat is never posted, and the only cost on the ledger is the search itself.
Who this is not for
Not every hire needs an executive search, and the terms above are not worth negotiating for a seat that does not need one.
- A seat a posting will fill. If you can advertise the role and three qualified applicants will answer within a month, a search agreement buys speed you do not need.
- Trades and field staffing. Selah does not place trades or craft labor, which is a staffing service rather than a search one.
- A buyer who can only negotiate the percentage. If procurement will only let you compare the headline number, compare it, but read the trigger, base and guarantee anyway so you know what the lowest number actually bought.
So the useful question for the next search firm is not what percentage it charges. Ask what you will owe on the day the search opens, on the day the owner delays the job, and on the day your new hire resigns. Three answers, all of them in the agreement. If a firm cannot give all three in writing, the percentage was never the price.
Selah Talent Partners runs confidential executive search for mandates that cannot be publicly posted. Our published terms are on pricing. If the seat cannot be posted, talk to us before the brief goes anywhere.
Sources and further reading
- AGC workforce survey, 2025 national results with NCCER
- Construction managers, BLS OEWS, SOC 11-9021
- Cost estimators, BLS OEWS, SOC 13-1051
- FAR 31.205-34, recruitment costs
- IRS Publication 15, supplemental wages