Retained, contingency and engaged, side by side
| Retained | Contingency | Engaged | |
|---|---|---|---|
| Fee | 25 to 33 per cent of first-year earnings | 15 to 25 per cent of salary | Between the two, set firm by firm |
| When paid | In stages through the search, usually thirds | Only when somebody starts | A fee up front, the balance on placement |
| Exclusivity | Always, one firm | Rarely, several agencies at once | Usually exclusive for a set period |
| Shortlist depth | A mapped market, including people not looking | Whoever is available and answers fastest | Wider than contingency, narrower than a full map |
| Guarantee | Commonly a free re-search if the hire leaves early | A sliding rebate inside the first months | A rebate or a replacement, by agreement |
| Best for | Senior, confidential or hard-to-fill seats | Visible roles in a deep market | Competitive roles where focus matters more than reach |
What each one actually is
Contingency: you pay only if somebody starts. No fee, no risk, no commitment on either side. Several agencies can work the same role at once.
Retained: you pay through the search in stages whether or not it ends in a hire. One firm works the role exclusively and is expected to map the whole market, not just the part that answers adverts.
What the payment model rewards
A contingency recruiter working eight roles will spend today on the two most likely to close. If yours is the hard one, it is not being worked, and nobody will tell you that.
| Contingency | Retained | |
|---|---|---|
| Paid for | A placement | Running a defined process |
| Rewards | Speed, and roles likely to close | Completing a hard mandate |
| Reaches people not looking | Rarely, it is not funded | Yes, that is the product |
| Your brief competes with | Every other role on their desk | Nothing |
| If nobody is hired | You pay nothing | You have paid one or two thirds |
The four questions that decide it
- Could you name ten credible people for this seat yourself? If yes, contingency or a direct hire will probably do.
- Do the right people need approaching rather than advertising to? If yes, only a funded, exclusive process reaches them.
- Is the search confidential? Confidentiality and multiple agencies are incompatible.
- Can you commit to interviewing quickly? A retained process fails without that, and you still pay.
Engaged or container search: the middle option
An engaged search, sometimes called a container, puts a smaller fee up front to secure the firm's commitment and leaves the balance until somebody is placed. The up-front fee buys priority on the firm's desk; the balance keeps the firm paid for the outcome. It suits a competitive role where an agency's divided attention is the real risk, and it is usually credited against the final fee.
Exclusive contingency exists: one agency, no retainer, paid on placement. You give exclusivity, they give focus. It works when the market is reachable but competitive, and it is under-used because neither side markets it.
A contingent shortlist is the other middle: nothing to start, and a percentage of annualised value only on a hire, with the whole fee resting on whether an appointment is actually made.
Common questions
Is retained search better than contingency?
For a senior, confidential or hard-to-fill seat, yes, because only an exclusive funded process reaches people who are not looking. For a visible role in a deep market, contingency gets the same result for less.
Can I use both at once?
You can, and it usually backfires. Candidates see the role from two sources, assume it is troubled, and the retained firm loses the exclusivity you paid for.
Is contingency recruitment cheaper than retained search?
On the percentage, yes: 15 to 25 per cent of salary against 25 to 33 per cent for retained, and nothing at all if nobody is hired. On a seat where the right people are not applying, it is often dearer in the end, because the role stays open, and an empty senior seat costs more than the fee difference.
What is flat-fee recruitment?
A fixed fee for a defined service, usually advertising the role and screening the applicants, instead of a percentage of salary. It is cheap and predictable for roles where good people apply. It does not fund approaching people who are not looking, so it is rarely the right model for a senior seat.
More of them, on hiring, contracts and what a fractional engagement costs, on the fractional executive FAQ.