Executive Search Fee & Vacancy Cost Calculator

Compare a Korean executive-search engagement with direct recruiting for one executive or scarce professional role. The dedicated bilingual calculator combines annual agreed wage and guaranteed bonus, success-fee rate, minimum fee, credited or additional retainer, VAT cash and non-recoverable VAT, internal sourcing and interview hours, direct external cost, vacancy days, daily contribution margin, one-rehire failure probability, replacement-guarantee timing, expected bad-hire cost, maximum economic fee rate, and vacancy-day break-even. It preserves the distinction between the general employer fee reference and the high-professional exception without deciding provider registration, worker status, occupation classification, wage character, contract validity, or legal compliance.

Agency vs direct-search economic cost

Executive search is more economical with these inputs

KRW 58,668,800 saved with agency

Agency total

KRW 167,043,200

Direct total

KRW 225,712,000

Vacancy loss avoided

KRW 66,000,000

Replace the example with your quote, contract, and company evidence

Defaults are illustrative, not market benchmarks. Use one position consistently and document the success-fee contract, internal time, hiring timeline, vacancy contribution, and failed-hire costs.

Compensation and success-fee contract

Enter the contracted compensation basis, fee floor, retainer credit, and cash versus economic VAT treatment.

KRW

Exclude equity compensation and benefits.

KRW

Include only guaranteed wage compensation covered by the fee contract.

%

Use the signed proposal or contract, not a market benchmark.

KRW

The contractual floor when it exceeds the percentage fee.

KRW

No refund is assumed. For a general placement, also confirm the post-employment-contract receipt rule.

KRW

Add non-duplicated advertising, assessment, travel, or similar fees.

%

10% is an editable Korean taxable-supply assumption.

%

Confirm actual input-VAT recovery with tax records.

Korean placement-fee reference checks

Review input-based high/professional-personnel exception conditions separately from the general employer fee and post-employment-contract receipt references. This is not a legal eligibility determination.

KRW

Use first-three-month wage for employment of at least three months; otherwise use the full agreed-period wage.

2026 top-quartile annual-wage reference

KRW 76,532,000

From MOEL Notice 2026-256; occupation, provider registration, and fee payer still require separate confirmation.

Internal recruiting time and direct external cost

Value recruiter, business-leader, and executive sourcing and interview time at loaded cost, then add direct-search external spend.

KRW/hour
hours
hours
hours
hours
KRW

Enter the economic-cost basis, including any non-recoverable VAT.

Vacancy, failed hire, and replacement guarantee

Enter vacancy days, daily contribution, one-cycle failed-hire probabilities, exit cost, and actual guarantee applicability conservatively.

days
days
KRW/day

Use contribution or avoidable value actually lost during the vacancy, not revenue.

%

A stress assumption applied to one replacement cycle only.

%

This is not a prediction of candidate performance.

KRW

Include cash costs not already counted elsewhere.

days
days

Count from hire date to the expected replacement request trigger.

Executive-search agency

KRW 167,043,200

Lower now
External economic cost
KRW 50,000,000
Internal sourcing and interview time
KRW 3,360,000
Initial vacancy loss
KRW 99,000,000
Expected failed-hire cost
KRW 14,683,200

Direct search

KRW 225,712,000

Option
External recruiting cost
KRW 8,000,000
Internal sourcing and interview time
KRW 11,760,000
Initial vacancy loss
KRW 165,000,000
Expected failed-hire cost
KRW 40,952,000

Success fee, VAT, and guarantee details

Separate cash outlay from economic cost after recoverable VAT and review whether the repeat success fee is waived after failure.

Success-fee basis

KRW 200,000,000

Contract success fee

KRW 50,000,000

Balance due on success

KRW 50,000,000

Agency service before VAT

KRW 50,000,000

Billed VAT

KRW 5,000,000

Agency cash outlay

KRW 55,000,000

Non-recoverable VAT

KRW 0

Repeat success-fee economic cost

KRW 0

Guarantee reference applies: repeat success fee is zero. Internal time, exit cost, and replacement vacancy loss remain even when the fee is waived.

Korean fee-rule reference result

This is a preliminary signal using only the entered checks and amounts. It does not determine registration, placement activity, worker status, wage classification, or legality of the contract.

High/professional personnel reference

All four input checks are met

Annual agreed-wage reference KRW 200,000,000

General employer fee reference

KRW 15,000,000

30% of the entered general-rule wage base.

Excess over general reference

KRW 0

Compared against KRW 50,000,000 including the retainer; this is neither a confirmed unlawful amount nor a refund claim.

Economic break-even

Holding all other inputs constant, these are the fee rate and agency vacancy duration where total economic cost matches. They are not legal caps or recommended rates.

Maximum success-fee rate

54.33%

An economic threshold changing only the contract rate.

Maximum agency vacancy days

137.6 days

Includes vacancy loss in the initial search and one replacement cycle.

Minimum required days saved

12.4 days

The current inputs differ by 60 days.

Vacancy and failure-probability sensitivity

The 30-day and 10-percentage-point changes are fixed stress widths, not industry statistics.

Agency total economic cost and savings versus direct search under vacancy and failure-probability changes
ScenarioAgency totalSavings vs direct (+)Result
Agency vacancy shorter by 30 daysKRW 130,083,200+KRW 95,628,800Agency lower
Base inputsKRW 167,043,200+KRW 58,668,800Agency lower
Agency vacancy longer by 30 daysKRW 204,003,200+KRW 21,708,800Agency lower
Agency failure probability down 10 ppKRW 154,807,200+KRW 70,904,800Agency lower
Agency failure probability up 10 ppKRW 179,279,200+KRW 46,432,800Agency lower

Assumptions to recheck before deciding

No automatic warning is active. Still document quote scope, guarantee exclusions, contribution margin, and failure-probability evidence.

Korea-specific 2026 reference · Employment Security Act Article 19(3), Enforcement Decree Article 25(6), Enforcement Rule Article 18-2 and Annex 1, MOEL Notice 2026-256, MOEL Notice 2017-22, and VAT Act Article 30 · primary sources checked 2026-08-04

Related calculators

Why compare an executive search fee with vacancy cost?

An executive search quote often starts with an agreed annual compensation base multiplied by a success-fee rate.
A decision-grade comparison also needs the retainer, minimum fee, nonrecoverable VAT, internal sourcing and interview time, contribution margin lost while the role is vacant, and the expected cost of one failed hire followed by one replacement search.
This Korea-specific calculator puts those items on one economic-cost boundary for a single executive or scarce-specialist position.

A lower modeled agency cost does not endorse a search firm or predict candidate quality, performance, or retention.
A lower direct-hiring cost does not prove that the employer has the candidate access, confidential-search capability, or executive alignment needed to fill the role.
Every default duration, probability, and commercial amount is a fictional formula example, not a Korean market average or recommended contract term.

Four cost views remain separate

  • Contract success fee, balance due, retainer, and other agency charges
  • Cash paid including VAT and economic cost including only nonrecoverable VAT
  • Internal time cost and initial vacancy loss for agency and direct hiring
  • Expected cost of one modeled failure and each option's total economic cost

Enter compensation and fee terms from the contract

The contract fee basis is annual base salary plus only the guaranteed bonus included in the agreed fee definition.
Do not automatically add equity, discretionary incentives, housing, a vehicle, or benefits unless the written search agreement clearly includes them.
A commercial total-compensation definition may differ from the annual agreed wage used for the Korean regulatory reference, so preserve both definitions in the review record.

Executive search contract inputs and evidence boundaries
InputIncluded amountFictional defaultPreferred evidence
Annual base salaryAgreed annual base wageKRW 180,000,000Offer and employment agreement
Guaranteed bonusGuaranteed amount included in the fee baseKRW 20,000,000Compensation and bonus clauses
Success-fee rateRate in the signed commercial terms25%Fee trigger and payment terms
RetainerUpfront amount plus its credit treatmentKRW 0Credit, refund, and termination clauses

Credited retainer

The balance is the contract success fee less the paid retainer, with a floor of zero.
If the retainer is larger than the success fee, the model does not invent a refund, so confirm whether the excess is refundable, transferable, or retained.

Noncredited retainer

The model adds the retainer and the full contract success fee as separate charges.
Add advertising, assessment, travel, or research charges only when they are fixed, payable, and not already included elsewhere.
When the high/professional reference checks are incomplete, the retainer is included in the general placement-fee comparison and triggers a reminder to confirm the post-employment-contract receipt rule.

Calculate the contract fee, cash payment, and VAT-adjusted cost

Step 1: contract success fee

fee basis = annual base salary + annual guaranteed bonus
rate fee = fee basis × success-fee rate
contract success fee = max(rate fee, minimum success fee)

Step 2: balance and pre-VAT service amount

credited balance due = max(contract success fee − retainer, 0)
credited success component = retainer + balance due
noncredited success component = retainer + contract success fee
agency service before VAT = success component + other agency fee

Step 3: cash and economic cost

VAT amount = agency service before VAT × VAT rate
agency cash out = agency service before VAT + VAT amount
nonrecoverable VAT = VAT amount × (1 − recoverable share)
agency external economic cost = agency service before VAT + nonrecoverable VAT

The 10% rate in Article 30 of the Korean Value-Added Tax Act is a fictional 2026 default for this interface, not a ruling on the service, invoice, timing, exemption, or input-tax recovery.
Replace the VAT rate and recoverable percentage with the organization's actual tax treatment.
Use cash out including VAT for funding and liquidity, while using only nonrecoverable VAT in the economic comparison.

Model internal time, vacancy loss, and one failed hire

Internal time should include active work by recruiting, the hiring executive, interviewers, leadership, and any board participants at one consistently loaded hourly cost.
An agency search still requires briefing, review, interviews, and decisions, while direct hiring may also require job advertising, assessments, referral rewards, or other external cost.
Daily role contribution margin should be the supportable contribution or avoidable value lost while the role is vacant, not gross revenue assigned to the executive.

Agency and direct-hiring economic cost formulas
Cost layerAgency routeDirect routeInput unit
Internal costAgency sourcing and interview hours × hourly costDirect sourcing and interview hours × hourly costKRW/hour
Initial vacancy lossDaily contribution margin × agency vacancy daysDaily contribution margin × direct vacancy daysKRW/day
One-failure costExit cost + replacement fee + internal cost + replacement vacancy lossExit cost + direct external cost + internal cost + replacement vacancy lossKRW/failure
Expected failure costAgency one-failure cost × agency failure probabilityDirect one-failure cost × direct failure probability0% to 100%

What a replacement guarantee does and does not remove

The replacement success fee becomes zero only when the expected discovery day is within a positive guarantee period and the user confirms that the modeled failure satisfies the actual contract conditions.
Onboarding and exit cost, internal time, and vacancy loss during the new search remain even when the fee is waived.
The calculator does not decide exclusions, candidate fault, refund rights, replacement limits, notice deadlines, or VAT treatment under the agreement.

Read total cost, break-even fee, and break-even vacancy days

Total economic cost and savings

Agency total economic cost adds external economic cost, agency internal cost, initial vacancy loss, and expected failure cost.
Direct total economic cost adds direct external cost, direct internal cost, initial vacancy loss, and direct expected failure cost.
Direct total less agency total is positive when the agency route is cheaper under the entered assumptions and negative when direct hiring is cheaper.

Maximum economic success-fee rate

The model varies only the success-fee rate from 0% through 200% and repeatedly applies the same calculation until agency and direct totals meet.
This preserves flat regions created by a minimum fee or retainer.
The result is an economic break-even rate for the current inputs, not a legal cap, market benchmark, or recommended negotiation rate.

Maximum agency vacancy days

The marginal agency cost of one more vacancy day is daily role contribution margin multiplied by one plus the agency failure probability.
Maximum agency vacancy days equal direct total cost less agency cost at zero vacancy days, divided by that marginal daily cost.
No result is produced when daily contribution margin is zero, and a negative maximum means time reduction alone cannot make the agency route break even.

  1. Replace every fictional input with a quote, time record, or approved planning assumption
  2. Compare agency vacancy days shortened and delayed by 30 days
  3. Compare agency failure probability reduced and increased by 10 percentage points
  4. Record the break-even rate and vacancy result as remeasurement gates, not supplier promises

The 30-day and 10-percentage-point shifts are fixed stress widths, not industry statistics, confidence intervals, or performance forecasts, and the delayed scenario stops at the 3,650-day input limit.
Replace them in the decision record with supportable ranges for the specific position and candidate market.

Worked vector A: fee, vacancy, and guarantee

This deterministic example demonstrates the formulas and is not a market benchmark.
It uses KRW 120,000,000 annual base salary, no guaranteed bonus, a 20% fee, a KRW 5,000,000 credited retainer, 10% VAT, and 100% VAT recovery.
Internal time costs KRW 100,000 per hour, with 20 agency hours and 70 direct-hiring hours.
The agency vacancy lasts 60 days, direct vacancy lasts 100 days, and daily contribution margin is KRW 1,000,000.
Failure probability is 10% for agency and 20% for direct hiring, exit and onboarding cost is KRW 10,000,000, and a failure discovered on day 60 qualifies for the 90-day guarantee.

Worked vector A agency and direct-hiring results in Korean won
ResultAgency routeDirect routeInterpretation
Contract success feeKRW 24,000,000Not applicableKRW 19,000,000 balance due
Cash out and external economic costKRW 26,400,000 and KRW 24,000,000KRW 5,000,000Full VAT recovery assumed
Internal costKRW 2,000,000KRW 7,000,000Hours × KRW 100,000
Initial economic costKRW 86,000,000KRW 112,000,000External, internal, and vacancy cost
Expected failure costKRW 7,200,000KRW 24,400,000Agency replacement fee is waived
Total economic costKRW 93,200,000KRW 136,400,000KRW 43,200,000 agency saving

The agency one-failure cost is KRW 72,000,000: KRW 10,000,000 exit and onboarding cost, KRW 2,000,000 internal cost, and KRW 60,000,000 replacement vacancy loss.
Multiplying it by 10% produces KRW 7,200,000 expected failure cost.
The result favors the agency because of the entered 40-day timing difference, lower internal hours, lower failure probability, and confirmed fee waiver, not because the model assumes that an agency is inherently better.

Worked vector B: the general-fee reference boundary

With KRW 70,000,000 annual agreed wage and a 20% fee, the contract success fee is KRW 14,000,000.
A KRW 5,000,000 credited retainer reduces the balance, so the placement-fee comparison remains KRW 14,000,000, while a noncredited retainer is added to the contract fee for this comparison.
The annual agreed wage is KRW 6,532,000 below the 2026 upper-quartile reference of KRW 76,532,000.
Even if provider registration, employer-paid fee, and an Annex 1 occupation are all checked, the reference conditions are incomplete because the wage amount does not meet the current threshold.

Contract success fee

KRW 14,000,000

KRW 70,000,000 multiplied by 20%.

General employer-fee reference

KRW 5,250,000

KRW 17,500,000 first-period wage base multiplied by 30%.

Amount above that reference

KRW 8,750,000

A review signal, not a finding of illegality.

Even with a zero success fee, a KRW 10,000,000 noncredited retainer produces a KRW 10,000,000 comparison amount and a KRW 4,750,000 excess signal when the general reference is KRW 5,250,000.
If the high/professional reference checks are incomplete, the calculator also prompts review of the retainer's actual invoice and receipt timing.

Do not substitute annual compensation for the general wage base

For employment lasting at least three months, the general employer-fee reference uses wages agreed for the first three months; for employment shorter than three months, it uses wages for the full agreed period.
The calculator multiplies the user-entered first-three-month wage or shorter-period wage by 30% and does not automatically divide annual pay or add equity and benefits.
The separate 10% construction day-labor rule is outside this executive and specialist model.

Korean paid-placement rules: a 2026 reference, not a legal opinion

The interface reports whether four user-confirmed reference conditions are all checked: a registered paid placement provider, an employer-paid fee, a qualifying Annex 1 occupation, and annual agreed wage of at least KRW 76,532,000.
It does not determine whether the provider is registered, whether the transaction is employment placement, whether the individual is a worker, which occupation code applies, or who legally bears the payment.
An executive title or a high compensation amount alone does not establish the exception.

Official Korean paid-placement references and calculator boundaries
Official referenceRecord and effective dateKey figureCalculator boundary
Employment Security Act, Article 19(3)Law ID 001765, MST 259231, effective July 24, 2024Notified-fee rule and exceptionNo decision on registration, worker status, or payment party
Enforcement Decree, Article 25(6)Law ID 005146, MST 284877, effective March 24, 2026Receipt after the employment contractNo decision on the high/professional timing exception or actual receipt date
Enforcement Rule, Article 18-2 and Annex 1Law ID 008381, MST 263203, annex serial 16414835Minor group 112, corporate executivesNo occupational-classification or wage-character decision
MOEL Notice No. 2026-256Administrative-rule ID 2038725, serial 2100000279080, effective May 12, 2026KRW 76,532,000Upper-quartile amount until the next notice
Domestic Paid Placement Fee Notice No. 2017-22Administrative-rule ID 34929, serial 2100000081610, effective July 1, 201730% general employer referenceUser must establish employment period and statutory wage base
Value-Added Tax Act, Article 30Law ID 001571, MST 276117, effective January 2, 202610%No taxability, timing, invoice, or recovery decision

Article 19(3) of the Employment Security Act limits money received by a registered paid placement provider to the notified fees, while allowing an employer-paid amount agreed by the parties for high-level or professional personnel prescribed by ministerial rule.
Article 25(6) of the Enforcement Decree generally requires receipt after the job seeker's employment contract is concluded, while excepting qualifying high-level or professional placements from that timing rule.
The calculator does not determine the retainer's invoice or receipt date and only raises a review signal when the exception checks are incomplete.
Article 18-2 of the Enforcement Rule requires both an Annex 1 occupation and annual agreed wage at or above the latest upper-quartile employee-income amount for major group 2 of the Korean Standard Classification of Occupations.
Annex 1 includes minor group 112 for corporate executives, but a job title alone does not settle classification.
MOEL Notice No. 2026-256 is itself issued on a separate statutory basis; the connection here is that the Enforcement Rule uses the same latest survey indicator, so the content must not say that this notice was issued under the Employment Security Act.

Contract review checklist

Fee and payment terms

  • Base salary, guaranteed incentive, equity, and benefits included in the fee base
  • Minimum fee, retainer credit or refund, extra charges, and VAT treatment
  • Whether success occurs at signature, start date, or probation completion
  • Duplicate referral, prior contact, and candidate ownership period
  • Exclusivity, multiple agencies, withdrawal, and early termination

Replacement and failed-hire terms

  • Guarantee start, end, and notice deadline
  • Exclusions for resignation, dismissal, restructuring, or changed compensation
  • Replacement count, search duration, refund, or credit mechanics
  • Additional fee when replacement compensation differs
  • Employer responsibility for internal time and renewed vacancy loss

Korean regulatory evidence

  • Registration and identity of the contracting paid placement provider
  • Worker status, domestic or overseas placement, and employer-paid fee
  • Evidence for the actual Annex 1 occupation classification
  • Wage components in annual agreed wage and the latest upper-quartile notice
  • Employment duration and first-three-month wage for the general reference

Management evidence

  • Observed agency and direct time-to-fill samples with dates
  • Internal hours by participant and loaded hourly cost
  • Contribution-margin support excluding gross revenue and fixed cost
  • Internal evidence range for failure probability and exit cost
  • Review date for the base, upside, and downside cases

A practical sequence for using the calculator

  1. Freeze the compensation boundary. Record how base pay, guaranteed bonus, minimum fee, and retainer connect in the quote
  2. Use one tax boundary. Decide whether the budget view or economic view is being compared and replace the VAT recovery default
  3. Document the Korean reference checks. Preserve evidence for provider registration, employer payment, Annex 1 occupation, and annual agreed wage without treating the output as legal advice
  4. Collect internal time by role. Include recruiting, business leadership, executives, and board participants without double counting
  5. Start with a conservative vacancy value. Use contribution margin or avoidable cost rather than revenue and retain a range
  6. Model only one replacement. The probability is a user stress assumption, not a performance forecast or infinite-failure process
  7. Read the guarantee itself. Waive the replacement fee only when both timing and actual contractual eligibility are supported
  8. Save sensitivity with the base case. Carry the 30-day, 10-percentage-point, fee-rate, and vacancy break-even outputs into the decision record

Frequently asked questions

Does a 25% success fee mean that the rate is legally permitted?

No.
The entered contract rate is neither a market recommendation nor a legal ceiling, and registration, transaction type, occupation, agreed wage, payment party, employment period, and actual terms require separate review.

Does compensation above KRW 76,532,000 establish the high-level or professional-personnel exception?

No.
The 2026 amount is only one reference condition, while Annex 1 occupation, registered provider, and employer-paid fee also require confirmation, and an executive title does not determine occupation or worker status.

Is the general 30% reference calculated from annual salary?

Not necessarily.
For at least three months of employment, it uses wages agreed for the first three months, while shorter employment uses wages for the entire agreed period, subject to the applicable statutory wage definition.

Can a general placement retainer be received before the employment contract?

Article 25(6) of the Enforcement Decree generally requires fee receipt after the employment contract and provides a timing exception for qualifying high-level or professional placements.
The calculator does not determine the actual invoice date, receipt date, or exception, so separately review timing whenever a retainer is entered and the exception checks are incomplete.

Does a replacement guarantee reduce failed-hire cost to zero?

No.
When the modeled failure qualifies, only the replacement success fee is waived; exit and onboarding cost, internal time, and vacancy loss during the new search remain.

Should vacancy loss use the revenue expected from the executive?

Gross revenue can overstate loss by ignoring variable costs and causation.
Use supportable daily contribution margin, avoidable delay value, or temporary replacement cost caused by the vacancy.

Is the maximum success-fee rate a recommended negotiation target?

No.
It is an economic break-even point with vacancy, contribution, time, and failure inputs held fixed, while legal permissibility, service level, contract risk, and commercial reasonableness remain separate.

Does a lower agency total mean that the firm should be selected?

No.
The output compares entered economic assumptions and does not assess candidate quality, conflicts, information security, exclusivity, reference-checking quality, or delivery capability.

Official sources and update boundary

  • Korea National Law Information Center OPEN API: Employment Security Act, law ID 001765, current MST 259231, Article 19(3), effective July 24, 2024
  • Korea National Law Information Center OPEN API: Enforcement Decree of the Employment Security Act, law ID 005146, current MST 284877, Article 25(6), effective March 24, 2026
  • Korea National Law Information Center OPEN API: Enforcement Rule of the Employment Security Act, law ID 008381, current MST 263203, Article 18-2, Annex 1 serial 16414835, effective June 12, 2024
  • Ministry of Employment and Labor Notice No. 2026-256, administrative-rule ID 2038725, serial 2100000279080, effective May 12, 2026, KRW 76,532,000 reference amount
  • Domestic Paid Placement Fee Notice No. 2017-22, administrative-rule ID 34929, serial 2100000081610, effective July 1, 2017
  • Korea National Law Information Center OPEN API: Value-Added Tax Act, law ID 001571, current MST 276117, Article 30, effective January 2, 2026
  • The final evidence for commercial and operating assumptions must come from the user's quote, agreement, offer, recruiting logs, and management plan

These records were checked for the requirements on August 4, 2026, and the upper-quartile amount must be rechecked when the next notice is issued.
Review new notices around May or June each year and recheck the Act, Enforcement Rule, fee notice, VAT rules, and actual contract with the competent authority or an adviser when needed.
The calculator does not decide fee legality, provider registration, occupational classification, worker status, legal damages, accounting, or tax treatment.

Put the quote and vacancy assumptions on one evidence sheet

Replace the fictional fee, internal time, vacancy duration, daily contribution margin, and one-failure assumptions with dated evidence to compare agency and direct hiring on one economic basis.
Save the 30-day and 10-percentage-point sensitivity, guarantee eligibility, Korean regulatory reference checks, and contract checklist with the base result.