Korn Ferry stands out in the recruitment industry as one of the largest recruiting firms worldwide. 

But what exactly does it cost to engage their services? This is a detailed pricing structure overview of Korn Ferry and what it means for your organization's executive search strategy.

Korn Ferry's Pricing Structure: A Detailed Look

1. Executive Search Fees

• Retainer Fee: Korn Ferry charges a retainer fee that is generally one-third (33%) of the first-year total cash compensation for the placed candidate. This includes both base salary and anticipated bonuses.
• Minimum Fee: There is a minimum fee of $80,000 for any engagement. This ensures Korn Ferry's full commitment regardless of the position's compensation level.
• Payment Structure: The fee is typically split into three installments, with the first installment due upon acceptance of Korn Ferry's proposal.

2. Additional Costs

• Out-of-Pocket Expenses: These are billed monthly as they occur and include:some text
  • Advertising
  • Candidate and consultant travel
  • Lodging
  • Reproduction
  • Courier services
• Note: These expenses are subject to prior approval by the client.
• Administrative and Overhead Costs: An additional charge of up to 12% of the retainer fee may be added to cover:some text
  • Communication expenses
  • Office expenses
  • Additional support services

3. Korn Ferry's Guarantee

Korn Ferry offers a 12-month guarantee on their placements:

• If the selected candidate is terminated for performance-related issues within the first year, Korn Ferry will conduct a new search without charging additional professional fees.
• In such cases, the client would only be billed for the associated expenses of the new search.

Breaking Down the Costs: A Typical Korn Ferry Engagement

Based on estimates from Korn Ferry's financial data, here's how a typical engagement might break down:

Total Cost: Approximately $109,000

• $58,000 to the lead consultant
• $4,900 to an associate consultant
• $16,000 for other related expenses
• $30,100 as profit to Korn Ferry

How Does Korn Ferry Compare to Other Firms?

While Korn Ferry is a leader in the field, it's worth noting how they compare to other executive search firms:

• Other firms like RPA Inc. and Witt/Kieffer follow a similar fee structure based on a percentage of the first year's compensation.
• Minimum fees for these firms typically range from $38,500 to $60,000, depending on the level of the position and other factors.
• This puts Korn Ferry's minimum fee of $80,000 at the higher end of the spectrum, reflecting their premium positioning in the market.

When Should You Consider Korn Ferry?

Given their pricing structure, Korn Ferry's services are best suited for organizations that:

• Need to fill high-level executive or board positions
• Value a global network and deep industry insights
• Are willing to invest significantly in finding the right leadership talent
• Appreciate the security of a 12-month placement guarantee

Alternatives to Korn Ferry

While Korn Ferry offers comprehensive services, alternatives exist for different needs and budgets:

1. Other Top-Tier Executive Search Firms: Companies like Heidrick & Struggles or Spencer Stuart offer similar high-end services.
2. Boutique Executive Search Firms: Smaller firms may offer more personalized service, often with lower minimum fees.
3. AI Recruiters: instead of letting external recruiters recruit for you, you can hire a ‘digital employee’ that does the recruiting for you, an example is HeroHunt.ai

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