External recruiters are one of the most common sources of frustration for founders — usually because the relationship was set up wrong from day one. Done well, a great recruiter can compress a six-month search into six weeks. Done badly, you pay 25 percent of first-year salary for a hire you could have made yourself.
Contingency. No upfront fee. Recruiter is paid only if you hire their candidate, typically 20 to 25 percent of first-year cash comp. Good for volume roles (individual contributors, mid-level managers) where speed matters and multiple recruiters can work the same role in parallel.
Retained. Upfront retainer (usually one third of estimated fee), paid in three installments regardless of outcome. Typical fee is 30 to 33 percent of first-year total comp. Used for senior executive searches (VP+, C-level) where you want a dedicated recruiter working exclusively on your role.
The rule of thumb: contingency below Director level, retained at VP and above. Mixing them (using a retained recruiter for a Director role) usually wastes money.
The recruiter brief is the single highest-leverage document in the search. A great brief includes:
1. The role in one paragraph. What they will own, who they report to, what success looks like at 12 months. 2. Must-haves vs. nice-to-haves. Separated clearly. Every "must" narrows the pool. 3. Comp range. Real range, not aspirational. Recruiters cannot sell a range you will not pay. 4. Anti-persona. Who is not right. Ex-BigCo VPs looking for an easier gig? First-time managers? Say so. 5. Sell points. Why this role, why this company, why now. The recruiter is going to repeat these 200 times.
A one-hour brief call plus a two-page written brief will produce 10x the candidate quality of a Slack DM that says "we need a VP of Sales."
Kickoff in the first week. In-person or video. Recruiter meets the hiring manager, meets you, sees the office if you have one, gets the pitch.
Weekly pipeline reviews. Standing 30-minute call. Not "any updates?" but a shared spreadsheet with every candidate, stage, and next step. 48-hour feedback rule. Feedback on every candidate within 48 hours of interview. Recruiters lose great candidates to companies that respond faster.
Direct access to the candidate. Do not let the recruiter be a permanent middleman. After the first screen, you talk directly.
Recruiter sends five candidates in week one before the brief is really nailed. They are testing which ones stick, not searching for you.
Every candidate is coming from the same one or two companies. Narrow sourcing.
You are getting resumes but no context on why this person, this role. Weak selling means weak conversion at offer.
This is where a great recruiter pays for themselves. They know the candidate's counter-offer, they know what the candidate really wants, and they will close for you if you let them. Bring them into the offer conversation, not around it. Founders who negotiate direct with candidates while cutting the recruiter out lose offers they should have won.
The recruiter fee is not the cost of the candidate. It is the cost of speed and reach. Priced against a role that sits open for six months at $200K plus opportunity cost, a 25 percent fee looks small. Priced against a hire you could have made from your own network in three weeks, it looks enormous. Know which situation you are in before you pick up the phone.
