Executive hires are more expensive than ever, highlighting a growing challenge for organizations that are looking to remain competitive in the workplace while coping with shifting budgets.

The cost-per-hire for executives has spiked by 113% since 2017, according to SHRM’s 2025 Recruiting Executives Benchmarking: Insights to Maximize Recruitment data brief. Meanwhile, the cost-per-hire for nonexecutives has declined 27% over that same period.

What’s behind this widening gap in cost-per-hire between executive and nonexecutive roles? Recruiters and HR professionals offered some answers to help leaders optimize their recruitment efforts.

The Rising Cost of Executive Hiring

The cost-per-hire for executives has increased in part because the price tag for executive compensation packages has gone up, especially amid heightened competition for talent, according to Jessica LaRochelle, senior manager of executive search and talent consulting at W Talent Solutions.

Another reason behind the surge is that hiring an executive often involves enlisting specialized search firms, whose services come at a high price, and setting up numerous rounds of interviews, she said.

“A bad hire at this level can have major financial and strategic consequences, so organizations naturally invest more to get it right,” LaRochelle explained.

Talent shortages have also contributed to the spike in executive hiring costs, said Jennifer Clark, vice president of talent acquisition services at insurance brokerage Gallagher.

“Many organizations continue to struggle to find candidates with the right leadership experience and strategic skill sets,” Clark said. “This scarcity drives up competition, leading to higher recruiting and compensation costs.”

As a result, many employers are investing more money in recruitment advertising and AI tools to improve sourcing of and engagement with executive candidates, she said.

Lack of movement in the job market has helped trigger the scarcity of executive talent, added Jeff Herzog, president of FPC National, a network of more than 60 executive search firms.

“If someone has a good job, they are keeping their head down and are working hard, so it takes a lot to incentivize someone to leave,” Herzog said. “Sign-on bonuses, big salary increases, and recruitment fees are necessary to attract and retain the passive talent that companies are looking for.”

Besides more competition for executives, executive hiring costs are being driven up by longer search periods, pricier relocations, and greater demands for specialized talent, noted Helena Ferrari, global HR leader at remote staffing firm Office Beacon.

“Most organizations are still relying on outdated traditional search models that are unresponsive to the realities of the current workforce,” she said.

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