Contingency recruitment vs. retained search

When hiring talent, companies often grapple with choosing between contingency recruitment and retained search. While both aim to land the right hire, they operate on entirely different principles.

Rather than pitting them against each other, let’s explore the nuances of both approaches to help you choose the one that best fits your business needs.

Picture contingency recruitment as a fast-paced, high-energy competition. In this model, companies usually engage multiple recruiters simultaneously, with the understanding that only the one who delivers a successful hire gets paid.

It’s a “no win, no fee” setup—ideal for businesses that want results quickly and without upfront financial commitment. This speed-focused, competitive approach is why some liken contingency recruitment to speed dating.

It’s all about connecting quickly, with minimal commitment until the right match is found.

The appeal of contingency recruitment lies in its low-risk nature for clients. Since there’s no payment unless the position is filled, companies feel they have little to lose. Moreover, working with several agencies simultaneously increases the chances of filling roles swiftly—a critical advantage when time is of the essence.

The contingency model is increasingly aligning with the trend toward flexibility, as the temporary workforce penetration rate is projected to grow by 30% by 2028¹. Companies are clearly prioritizing short-term hires with the specific expertise needed to complete a task over permanent positions that require a more nuanced cultural fit for the long term. However, while this approach offers speed and the ability to hire a bigger volume, it’s not without its challenges.

Recruiters are incentivized to focus on speed, which can sometimes come at the expense of quality. With several agencies in the race, there’s less time to dive deep into your company’s culture or long-term goals. Instead, it’s all about who can bring candidates to the table fastest—whether or not they’re the best long-term fit.

From the candidate’s perspective, contingency recruitment is a mixed bag. On the one hand, it offers a flurry of opportunities, which can be great for job seekers wanting a quick placement. Candidates might also benefit from access to multiple companies simultaneously, giving them more options. But this fast-paced model can feel transactional. With recruiters often juggling numerous roles and candidates at once, job seekers might feel like just another name on a list. This lack of personalized attention can result in inconsistent communication or a less supportive experience.

Retained recruitment is a completely different story. If contingency is speed dating, retained search is akin to a long-term partnership. Here, a company partners exclusively with one recruitment firm, paying an upfront fee for the recruiter’s dedicated time and expertise.

The client effectively secures a partner who acts as an extension of their team, diving deep into the company’s culture and specifics of the role to find the most suitable match.

The exclusivity of retained search has clear benefits. For clients, it means a tailored and thoughtful approach, where the recruiter invests time to truly understand the company and its needs. This often results in better-aligned candidates who fit not just the job description but also the organization’s culture and values. Particularly for senior-level roles or hard-to-fill positions, this can be invaluable. According to the 2023 Deloitte Global Human Capital Trends Report, companies are increasingly focusing on cultural fit—an area where retained search excels.

However, the upfront financial commitment – more about recruitment cost here – can be a hurdle. Retained search requires an investment, typically paid in installments, regardless of whether a placement is ultimately successful. While this risk is shared between the company and the recruiter, it may deter businesses that prefer lower upfront costs or want to hedge their bets by working with multiple agencies.

From the candidate’s perspective, retained search often feels more personal. Recruiters working on a retained basis typically invest in building a strong relationship with candidates, offering tailored guidance and insights. This means candidates not only gain a deeper understanding of the role but also receive ongoing support throughout the hiring process. Additionally, retained recruiters often manage high-level or exclusive opportunities, giving candidates access to positions that might not be publicly advertised.

That said, the personalized nature of retained searches comes at the cost of speed. Since the process is more thorough, candidates might find themselves waiting longer for interview stages or feedback. Moreover, because retained recruiters work on fewer, specialized roles, candidates who don’t fit the exact profile might find fewer opportunities available.

From an operational perspective, contingency recruitment and retained search follow distinct paths.

While the objectives are similar—securing the right talent—the steps taken in each method are quite different. Understanding these processes can help clarify when each model might be the best fit for your business needs.

Here’s a quick breakdown of how the two processes work.

• The company briefs multiple recruitment agencies about the open position.
• Recruiters then search their databases and networks for candidates, often simultaneously.
• The recruiters submit candidates as quickly as possible, aiming to outpace competitors.
• Only the agency that successfully places a candidate receives a fee, which is paid after the hire is confirmed.
• The company reviews several candidates but may not get in-depth cultural alignment, given the speed of the process.

• The company partners exclusively with one recruitment firm, signing a contract and paying an initial fee.
• The recruiter conducts an in-depth consultation to fully understand the role, company culture, and long-term goals.
• A detailed search begins, often involving a more methodical approach, including headhunting and industry-specific outreach.
• The process typically takes longer, with the recruiter providing regular updates to the client.
• Payment is usually made in stages, with the final installment paid upon the candidate’s placement.

When choosing between contingency and retained recruitment, understanding the financial implications is crucial.

Contingency recruitment is often seen as a low-risk option—clients pay a fee (typically 15-25% of the candidate’s first-year salary) only when a successful hire is made. 

For businesses focused on reducing upfront costs, this model is attractive, as it allows them to work with several agencies simultaneously to increase their chances of finding the right fit.

In contrast, retained search generally involves a higher fee structure, ranging from 25-35% of the candidate’s annual salary. This fee is split into stages: a portion is paid upfront, another during the search process, and the final part upon placement. This financial commitment reflects the deeper engagement and the exclusivity of the search. Companies that choose this route do so because they value the strategic partnership and tailored approach, despite the higher costs.

Choosing between these two models depends on your business needs and the specifics of the role you’re filling. If you need to fill a role quickly, perhaps due to an urgent gap or a sudden spike in demand, contingency recruitment offers a faster, more flexible solution. It’s also well-suited for lower to mid-level positions where volume and speed are more critical than precision.

Retained recruitment, on the other hand, is ideal for high-stakes or senior-level roles, where the right cultural fit is as important as skills and experience. The personalized, in-depth approach of retained search can pay off significantly when the role requires a specialized skill set or a candidate capable of driving long-term strategic impact.

In the end, choosing between retained search and contingency recruitment isn’t about one being superior to the other. It’s about aligning with your business needs. Contingency recruitment is perfect for quick, lower-risk hires, while retained search offers a more strategic, personalized approach for critical roles.

Whichever route you choose, the goal is the same: finding the best talent to propel your business forward.

So, whether you’re looking for a speed date or ready for a long-term partnership, we’re here to help you navigate the journey.