In short
There are five common ways to pay for hiring: contingent fees, retained search, embedded recruiters, an in-house team, and monthly models like SUS. They differ mainly in when you pay, who carries the risk if a hire does not work, and how much of the process you run yourself. None of them is universally cheapest — the right one depends on hiring volume, seniority and how much cash you can release at the point of hire.
Key facts
- Contingent
- Pay on placement, one large fee
- Retained
- Staged payments, usually senior or scarce roles
- Embedded
- Day or monthly rate for recruiter capacity
- In-house
- Fixed salary cost, best at sustained volume
- Monthly (SUS)
- Monthly percentage of salary while the hire stays
The five models side by side
Read down the cash timing column first — it is usually the deciding factor.
| Model | When you pay | Risk if the hire leaves | Best fit |
|---|---|---|---|
| Contingent | One fee on start date | Short rebate window, then the fee is spent | Occasional hires with cash available |
| Retained | Staged: engagement, shortlist, placement | Usually re-run rather than refund | Senior, confidential or very scarce roles |
| Embedded | Day or monthly rate while engaged | You carry it — you paid for time, not outcome | Sustained hiring bursts without in-house capacity |
| In-house | Salary, every month regardless of hires | You carry it entirely | High, steady hiring volume |
| Monthly (SUS) | Monthly percentage of gross salary while employed | Billing stops when employment ends | Startups protecting cash at the point of hire |
What actually differs
Every model pays for the same underlying work: finding, assessing and closing a candidate. What changes is the shape of the payment and where the risk sits when things do not go to plan.
A contingent fee concentrates the cost into one month and puts almost all of the tenure risk on the buyer. An in-house team spreads cost evenly but you pay it whether or not roles are open. A monthly model links the payment to the employment continuing, which spreads the cost and shares the tenure risk — but it also means the total keeps accruing while the person stays.
Questions that decide the model for you
- How many hires will you genuinely make in the next twelve months?
- Can you release a five-figure fee in the same month as a new salary, more than once?
- How specialist is the role — could an in-house generalist recruiter fill it?
- How much founder and engineering time can you spend on search itself?
- What happens to your plan if one of the first three hires leaves within a year?
Common questions
- Is a monthly recruitment fee a form of finance?
- No. Nothing is lent, there is no interest and there is no credit agreement. It is a recruitment fee structured as monthly payments linked to a specific employee, which stop if that employment ends.
- When is retained search the better answer?
- When the role is senior, confidential, or so scarce that a search needs firm commitment on both sides. Retained works because both parties commit up front — which is exactly why it does not suit a startup trying to protect cash.
- At what point does an in-house recruiter make sense?
- When hiring is continuous rather than episodic. If roles will be open every month for the next year, a salaried recruiter usually wins on cost per hire; if hiring is lumpy, you pay for the gaps.
Sources
Where a fact in this guide comes from a document you can check yourself, it is listed here. We do not cite market statistics or benchmark data we have not published.
Model the cost of a hire
Put a salary in and see the illustrative monthly figure, the cumulative cost and the crossover point against a traditional fee.
Open the rate calculatorAny percentages or figures shown in this article are illustrative examples used to explain the model. They are not quoted rates, market benchmarks or salary data.