You have a senior role open. Three recruiting firms are in your inbox, each describing their model in different words, and at least one is telling you that you only pay if you hire. Before you pick, you should understand what each model is actually built to do.
Retained search is an exclusive engagement where you pay a firm in installments to run a defined process for one role. Contingency search is non-exclusive, and you pay only when you hire the recruiter’s candidate. Retained fees typically run 25 to 33% of first-year compensation. Contingency runs 18 to 25% of first-year base salary.
That is the definition. The difference that matters is what each fee structure makes the recruiter do.
What Is Retained Search?
Retained search is a partnership on a single role. You pay a portion of the fee to kick off the engagement, another portion of the total fee at shortlist, and the remainder at placement. In exchange, the firm commits a dedicated team to your search until it closes.
Because the firm is paid to run a process, the work looks different. A retained search starts with defining what success in the role requires, before anyone is contacted. It includes mapping the market, approaching leaders who are not applying anywhere, qualifying them against agreed criteria, and pressure-testing candidates before you ever meet them.
You get exclusivity, a defined process, and accountability to the outcome of the search. This model is considered a partnership between the search firm and their client.
What Is Contingency Search?
Contingency search is pay-on-placement with no commitments to either side. You don’t commit to hiring anyone, and the recruiting firm is not obligated to find you a hire. In fact, some companies give the role to multiple agencies to “hedge their bets” that someone might have a person they could hire.
That sounds low-risk. Understand the economics behind it. A contingency recruiter is often competing against two or three other agencies and your own job posting. They get paid for being first, not for being thorough. So the rational move is to send you the available candidates they already know, quickly, across many open roles at once, and to spend their time on whichever role is likely to close.
Retained vs. Contingency: Side by Side
| Retained Search | Contingency Search | |
|---|---|---|
| Fee | 25 to 33% of first-year total compensation | 18 to 25% of first-year base salary |
| Payment | Installments: engagement, shortlist, placement | Only on hire |
| Exclusivity | One firm, committed to the hire | Multiple agencies competing |
| Candidate pool | Outbound passive leaders approached directly | Active candidates already in market |
| Process | Success criteria defined before outreach | Resumes submitted as found |
| Recruiter incentive | Complete the search with the right hire. Partnership model. Reputation. | Place a candidate before competitors. Transactional. Quantity over quality. |
| Best for | Senior to executive level and hires that require specific previous experience or are considered scarce. | Entry to intermediate level hires and generalists. |
When Does Contingency Search Make Sense?
Contingency fits when the role is well-defined, the candidate supply is deep, and a wrong hire is recoverable. Entry level, junior or intermediate level individual contributors. Roles you have hired for many times before. Positions where you have internal capacity to screen properly and you mainly need more resumes in the funnel. If a role meets those conditions, contingency is the cheaper and faster option, and you should use it.
When Does Retained Search Make Sense?
Retained search fits when the cost of getting the hire wrong exceeds the cost of the search. That usually means senior level executive roles, first leadership hires in a function, confidential replacements, and roles where the best candidates are employed, performing, and not reading job boards.
Ask yourself three questions:
- Will this person shape the direction of the business? A VP of Product who places the wrong bets is an expensive mistake.
- Are the people you want easily identifiable? In a market where everyone has AI in their title and using AI tools that make their resumes appear like ‘slop’, someone has to engage with people, qualify them, and hold their interest throughout your process.
- Do you know, specifically, what success in this role requires? If your leadership team cannot agree on that answer, more resumes will not help you. A retained process forces that agreement before interviews begin.
If you answered yes, no, and no, you are describing a retained search.
Why the Distinction Matters More in 2026
Talent is not scarce in 2026. What has changed is that the cost of a wrong executive decision has gone up while the reliability of surface-level evaluation has gone down.
AI has raised the baseline of candidate presentation across the entire market. Polished resumes that are over optimized to get through an ATS, rehearsed narratives, and well-prepped interview answers are now standard. Screening tools can match keywords faster than ever, and none of that tells you how a leader operates when priorities conflict, whether their past success translates to your stage, or whether they can execute inside your constraints.
We watched a Head of Product interview more than 50 senior product designers over several months without making a hire.
Candidate supply was never the problem. The team had no agreed definition of what success in the role required, so every interview rewarded confidence and articulation instead of judgment and delivery. Product decisions slowed, the roadmap stalled, and junior designers worked without senior direction the entire time.
Contingency, by design, adds volume to your funnel. Retained, done properly, adds qualification. In a market where every candidate presents well, qualification is the scarce input.
After 25 years recruiting product, design, marketing, and sales leaders for startups and scale-ups, including searches for Workleap, Achievers, MyDoh, 3Terra, LEDN and Extreme Networks the pattern we see has not changed: companies that hire well at the senior level are the ones that define success first and evaluate for it rigorously. The fee model that pays for that discipline is retained.
Frequently Asked Questions
Is retained search more expensive than contingency?
The percentage is higher, 25 to 33 percent against 15 to 25 percent. The full cost comparison should include the price of a mis-hire: severance, restart costs, and the six to twelve months of lost momentum a failed executive hire creates. On mission-critical roles, retained is usually the cheaper total outcome.
Can I give the same role to contingency agencies and a retained firm at once?
No. Retained search is exclusive by definition, and that exclusivity is what buys you a committed team and a defined process. Splitting a senior role across agencies puts every recruiter back on contingency incentives, whatever the contract says.
What happens if a retained search doesn’t produce a hire?
You have still paid the engaged portion of the fee. Reputable firms mitigate this with defined deliverables at each stage, replacement guarantees, and shortlist commitments. Ask any firm you are considering what their completion rate is and what happens if the search stalls. A firm that runs a real process will answer both without hesitation.
Is there a middle option between retained and contingency?
Yes. Engaged search sits between the two: a smaller up-front commitment, with the balance due on placement. It gives you a dedicated process at lower initial cost, and it is the model we most often recommend to earlier-stage companies making their first senior hires.
Hiring a leader this quarter and unsure which model fits the role? Book a call with us and we’ll tell you, including when the answer is that you don’t need a search firm at all.