Retained vs contingency search
Retained or contingency search?
The real difference is not the price list, it is who carries the risk of the search failing and how much commitment each side makes. Contingency puts the risk on the recruiter and buys you optionality. Retained puts money and exclusivity in first, and buys you a contracted process.
Side by side
Retained search and Contingency agency compared on the things that change the decision.
| Aspect | Retained search | Contingency agency |
|---|---|---|
| Who carries search risk | Shared. You have paid instalments whether or not a hire results. | The recruiter. No hire, no fee. |
| When money moves | Staged across the search, starting at kick-off. | Once, at the point of hire. |
| Exclusivity | Exclusive by design. One firm, one process. | Usually non-exclusive, and you can run several firms at once. |
| Depth of process | Market mapping, structured assessment, agreed reporting and milestones. | Varies. Typically network-led and shortlist-focused rather than exhaustive. |
| Best-suited roles | Senior, confidential, scarce, or where a mis-hire is expensive out of proportion to the fee. | Well-understood roles the market can supply, where several credible candidates exist. |
| Predictability of effort | Contracted. You can see what is being done and hold the firm to it. | Not contracted. Attention follows the likelihood of a fee. |
| If the person leaves early | Terms vary and are often narrower than a contingency rebate; agree them before you sign. | A sliding rebate or replacement period, shrinking over the first months. |
| If you change your mind | Instalments already paid are generally not recoverable. | You can stop at any point with nothing owed. |
How to choose
Retained search tends to fit when
- The role is senior, confidential or genuinely scarce in the market.
- You need evidenced coverage of a market, not a shortlist from a network.
- You can commit cash before a hire exists and want a contracted process to hold someone to.
Contingency agency tends to fit when
- The role is well understood and several credible candidates plausibly exist.
- You want to keep cash in the business until a hire actually happens.
- You are willing to accept variable effort in exchange for no upfront commitment.
There is a middle ground worth knowing about: exclusive contingency, where one firm works the role without a retainer in return for being the only one on it. It buys some of the commitment of a retained process without the upfront instalments, and it is often the right shape for a startup's most important non-executive role. Separately, whichever route you choose, the payment structure is a distinct question from the search structure — a fee can be one invoice at hire or spread monthly while the person stays.
Questions to ask before you commit
Retained search
- What is delivered at each instalment, and what happens if we stop the search?
- Who actually does the work — the person selling it, or a delivery team?
- What does the market map look like, and how will coverage be evidenced?
Risks to weigh
- You pay whether or not the search concludes in a hire.
- Exclusivity removes your fallback if the firm turns out to be a poor fit for the role.
- Overkill for a role the market can supply readily.
Contingency recruitment agency
- What exactly triggers the fee, and what counts as an introduction?
- What is the rebate scale, and is it a refund or only a replacement?
- Is there an opt-out or transfer clause if we later hire the candidate for a different role?
Risks to weigh
- The largest single cash outflow lands in the same month as the salary, the equipment and the onboarding.
- Rebate windows are short. A leaver at month seven is normally your loss, not the agency's.
- Effort is not contracted, so an unusual or slow role can quietly get deprioritised.
Common questions
- Is retained search only for executive roles?
- No, though that is where it is most common. The deciding factors are scarcity and consequence: if the market has to be mapped rather than searched, or a mis-hire in that seat would be very costly, a retained process can be justified at any level. For a role with plenty of credible candidates, it is usually more process than the situation needs.
- What is exclusive contingency?
- One firm works the role exclusively, but you still only pay if you hire. In exchange for exclusivity, you can reasonably expect a deeper process and clearer reporting than an open contingency brief. Agree the exclusivity period and what happens if it lapses.
- How does a monthly recruitment fee fit alongside these?
- It is a payment structure rather than a search structure. Our model runs a conventional agency search and then spreads the fee across the months the employee stays, so nothing large is due at hire and billing stops if they leave. Over a long tenure the cumulative total passes what an upfront fee would have been, which is why we publish the crossover point.
Keep reading
- Monthly fee vs placement feeThe payment-structure comparison, with illustrative figures and the crossover month.
- Model the numbersMonthly cost, cumulative cost and crossover for your own salary levels.
- A founder's checklist for choosing a technical recruitment partnerWhat to test before instructing a recruiter for a technical role: briefing depth, market honesty, process, candidate experience and commercial terms.
- Recruitment fee models comparedContingent, retained, embedded, in-house and monthly recruitment models compared on cash timing, risk, control and where each one genuinely fits.
- What happens to recruitment fees when a hire leavesRebates, tapers, replacement clauses and monthly models explained, with the exact questions to ask any recruiter before you sign.