How a Success-Based Executive Search Fee Is Calculated in Indonesia

A success-based executive search fee in Indonesia is calculated as 20% of the placed candidate’s first-year gross package and is payable on the candidate’s first day of employment. Reqruit Asia applies this model with no upfront cost and a 90-day replacement guarantee.

Two Fee Models in Indonesia’s Executive Search Market

Before calculating a fee, it helps to understand what type of fee model is being used. Two models operate in Indonesia’s executive search market.

Retained model: the client pays a portion of the fee before the search begins, regardless of outcome. The payment schedule is typically 30 to 33% of the estimated annual salary, paid in two to three tranches. The upfront portion is non-refundable even if no suitable candidate is found.

Success-based model (used by Reqruit Asia): no fee is payable until a candidate is placed and starts working. The fee is calculated on the placed candidate’s actual first-year gross package and is payable 100% on the first day of employment.

The core difference: the success-based model transfers the placement risk from the client to the search firm. Reqruit Asia bears the cost of the search and only earns if a successful placement is completed.

What “First-Year Gross Package” Includes in Indonesia

The fee base for a success-based executive search is the placed candidate’s first-year gross package. Understanding exactly what is included and excluded prevents ambiguity at invoice time.

Component	Included in Fee Base?	Notes
Annual base salary (12 months)	YES	Core base salary, pre-tax
Fixed housing allowance	YES	If contractually guaranteed
Fixed transport allowance	YES	If contractually guaranteed
Fixed meal or communication allowance	YES	If contractually guaranteed
THR (Tunjangan Hari Raya)	YES	Mandatory, equivalent to 1 month base salary
Variable performance bonus	NO	Not contractually guaranteed; excluded
BPJS employer contributions	NO	Statutory social insurance; excluded
Benefits in kind (company car, housing in kind)	NO	Non-cash; excluded
Sign-on bonus (one-time)	YES	One-time as part of first year compensation

Reqruit Asia confirms the specific components included in the fee base with the client before the mandate begins. This confirmation is part of the engagement agreement.

A Worked Example: Finance Director Role

Component	Monthly (Rp)	Annual (Rp)
Base salary	35,000,000	420,000,000
Transport allowance (fixed)	3,000,000	36,000,000
Meal allowance (fixed)	2,000,000	24,000,000
THR	n/a	35,000,000 (1x base)
Total first-year gross package		515,000,000
Reqruit Asia success fee (20%)		103,000,000
Payment date 30 days after invoice issued		Finance Director’s first day of employment

The fee is invoiced after the candidate has confirmed joining the company on the first day, payable within 30 calendar days. 

When Is the Fee Triggered?

The fee is triggered by one event and one event only: the candidate’s first day of employment.

The fee is not triggered by: offer acceptance by the candidate; signing of the employment contract; verbal commitment from either party; or the candidate passing a background check.

If the candidate accepts the offer but withdraws before their start date for any reason, no fee is payable. If the client withdraws the offer after the candidate has accepted, no fee is payable.

This distinction protects both parties and is a significant differentiator from retained models, where a portion of the fee is already paid regardless of whether a candidate starts.

The Replacement Guarantee: What Happens After the Fee Is Paid

The fee is not refunded if the placed candidate exits within 90 days. Instead, Reqruit Asia restarts the search at no additional fee under the 90-day replacement guarantee.

The guarantee covers one replacement search at no additional charge. It applies to candidate exits due to fit or assessment-related reasons. It does not cover: client-initiated role changes after placement; candidate exit due to organizational restructuring; or candidate exit due to changes in compensation or role scope that were not disclosed at offer stage.

The replacement search follows the same 8-step process and quality commitment as the original. A new engagement agreement is not required.

Success Fee vs. Retained Fee: Side-by-Side for the Same Role

Dimension	Reqruit Asia (Success-Based)	Retained Firm
Fee percentage	20%	30 to 33%
Upfront cost	None	1/3 of fee before search begins
Payment trigger	Candidate’s first day	Scheduled tranches (upfront + milestones)
Risk if no placement	No fee	Upfront tranche non-refundable
Replacement guarantee	90 days, one free replacement	Varies by firm and contract
Example: Country Manager at Rp 800M/year	Rp 160,000,000 (at placement)	Rp 240,000,000-264,000,000 (includes upfront)

Illustrative Case Study: CFO Search Fee Evaluation by a Finance Director in North Jakarta

The following scenario is a hypothetical illustration based on actual Reqruit Asia recruitment parameters. All figures and processes reflect real terms and conditions. The candidate profile is fictional and does not represent any real individual.

A female Finance Director at an Indonesian technology company, aged 46, based in North Jakarta, was tasked with evaluating proposals from two executive search firms for a CFO mandate.

Firm A (retained) quoted a total fee of Rp 396 million, with Rp 132 million due before the search began, non-refundable. Reqruit Asia (success-based) quoted a total fee of Rp 240 million for a CFO package of Rp 1.2 billion per year, Rp 0 upfront, with a 90-day replacement guarantee included.

The company chose Reqruit Asia. The CFO was placed in 7 weeks from mandate. The fee of Rp 240 million was paid on the CFO’s first day of employment.

Conclusion

The success-based executive search fee in Indonesia is calculated as 20% of the placed candidate’s first-year gross package, payable on their first day of employment, with no upfront cost. Gross package components included in the fee base cover base salary, fixed allowances, and THR, but exclude variable bonuses and BPJS.

Reqruit Asia has used this model since 2010, with a 90-day replacement guarantee as a quality commitment on every placement.

Contact our team for a fee illustration based on your target package: +62 21 5095 8011 | WhatsApp +62 857-7940-7583 | [email protected].

FAQ: Executive Search Fees in Indonesia

Q: What percentage do executive search firms charge in Indonesia?

A: Executive search firms in Indonesia typically charge a success fee of 15 to 25% of the placed candidate’s first-year gross package. Reqruit Asia’s standard fee is 20%, payable on the candidate’s first day of employment, with no upfront cost. Retained search firms charge 30 to 33%, with a portion payable before the search begins.

Q: What is included in “first-year gross package” for executive search fee calculation in Indonesia?

A: First-year gross package includes annual base salary, fixed contractual allowances such as housing and transport, and THR equivalent to one month’s base salary. Variable performance bonuses, BPJS employer contributions, and benefits in kind are not included. Reqruit Asia confirms the included components with the client before the mandate begins.

Q: When is the executive search success fee payable in Indonesia?

A: Reqruit Asia’s 20% fee is payable on the placed candidate’s first day of employment. The fee is not triggered by offer acceptance or contract signing alone. If the candidate accepts and then withdraws before their start date, no fee is payable. Payment is made in full on day 1, not in installments.

Q: Is there a refund if the placed executive leaves within 90 days?

A: The fee is not refunded if the placed executive exits within 90 days. Instead, Reqruit Asia restarts the search at no additional fee under its 90-day replacement guarantee. The guarantee covers one replacement search at no charge, provided the exit is not due to client-initiated role changes after placement.

Q: What is the difference between a success fee and a retained fee in executive search?

A: A success fee is payable only when a candidate is successfully placed, with no upfront cost. A retained fee requires a portion of the fee before the search begins, regardless of outcome. Reqruit Asia uses a success-based model.