For a senior executive role in Thailand, a failed appointment can cost your company more than 10 million baht through employment costs, lost productivity, disrupted operations, and replacement expenses. The total depends on the executive’s salary, how long the problems continue, and the effect on business performance.
Let me explain this by turning back the clock. You are looking to find candidates for a senior executive role in your company. Your regional office in Singapore suggests (probably insists) on handling the recruitment internally to save the headhunter’s fee. Finance is happy because of what appears to be a saving; HR goes ahead and advertises the position, and later the hiring manager starts interviewing.
Six months after the hire, the new executive leaves. Or the person stays, but performance falls short, decisions take longer, and colleagues spend their time dealing with problems the new hire should be solving.
The recruitment fee you avoided remains easy to identify. The cost of the hiring mistake takes longer to calculate.
Hiring the hard way with the attitude that if it does not work out, then you can always fire the newly hired executive. Honestly, that is an irresponsible approach, and the head office should question this behavior.
After more than 20 years in executive search in Thailand, my advice is straightforward: before deciding that a headhunter costs too much, calculate what an unsuccessful appointment could cost your business.
The costs that never appeared in the hiring budget
Internal recruitment takes time, even when no recruitment agency submits an invoice. Your HR team screens applications, coordinates interviews, follows up with candidates, and prepares offers. Your manager reviews resumes and attends interviews while other responsibilities are put on hold.
Those activities may represent a sensible investment when you appoint the right person, and everything goes as planned. But when the appointment fails, you face much of the same work again.
Then come the costs of onboarding, training, management attention, and ending the employment. Exit costs depend on the circumstances, length of service, contractual terms like severance pay and notice period.
Meanwhile, your team carries the additional workload. You may even yourself be putting on extra hours in the evenings and weekends. Your customers may experience slower responses. Projects may fall behind schedule. Your best employees may begin questioning whether they want to stay.
The financial consequences extend well beyond the departing executive’s salary.
How a senior hiring mistake could reach ฿10 million
Consider this example when you have appointed a senior executive on ฿300,000 a month. After six months, you decide the appointment has failed. Salary alone has now run up to a cost ฿1.8 million.
Assume another ฿600,000 in benefits, onboarding, and external training, plus ฿400,000 in internal recruitment and management time. For this example, allow a further ฿600,000 for the combined cost of ending the employment, including any applicable payments and agreed settlement.
- Your direct and allocated costs now total ฿3.4 million.
The bigger exposure comes from business performance. Suppose poor decisions and delayed execution reduce your gross profit by ฿4 million. Then suppose the vacancy and replacement process cause a further ฿3 million in lost gross profit and additional operating costs, measured separately to avoid counting the same loss twice.
- The total reaches ฿10.4 million.
You should not treat every baht of salary as wasted. The executive may of course have contributed useful work. Admittedly, every unsuccessful appointment will not always cause losses on this scale. But the example shows why a senior hiring decision deserves a broader financial assessment than comparing recruitment fees.
Hiring internally can work
A capable internal recruitment team can deliver excellent appointments. If your company has access to suitable candidates, understands the role, and knows how to assess people thoroughly, handling the search internally may make commercial sense.
Equally, paying a recruiter does not guarantee a successful appointment. A recruiter who forwards resume after resume without properly understanding your business offers limited protection against a poor decision.
The question is whether your chosen process gives you access to suitable people and enough reliable evidence to select among them.
What an experienced headhunter should contribute
An
should widen your access to candidates, including executives who are performing well elsewhere and have no reason to answer your ad on LinkedIn.
Reaching those people requires more than identifying a potential candidate online. You need to understand their experience, approach them credibly, explain the opportunity, and establish whether they have a serious reason to consider moving.
Assessment matters equally. A strong resume does not establish how someone will manage disagreement, respond to pressure, develop employees, or work with your owners and regional headquarters.
Your preferred search partner should investigate these questions through structured interviews, relevant assessments, and reference checks. They should challenge an unclear brief and explain concerns about a candidate, even when you like that person.
You should also expect an honest discussion about your own organization. Unclear authority, conflicting expectations, and too little support can undermine a capable executive. A thorough search examines what the person needs to succeed.
Compare the fee with the financial exposure
Before your next senior appointment, ask your management team what happens if the person underperforms for six months. Which decisions will suffer? Which customers, projects, or employees could you lose? How long could it take to find and onboard a replacement?
Then assess whether your recruitment process addresses those risks.
A professional executive search fee pays for access, assessment, and informed judgment. Its value depends on the quality of the work behind it.
Saving ฿500,000 is worthwhile when your hiring process delivers the executive your business needs. When the appointment fails and the consequences reach ฿10 million, that saving deserves much closer scrutiny.
Before you reject the recruitment fee, calculate the cost of getting the appointment wrong.
