Retained search usually suits senior, confidential, or hard-to-fill roles, because the recruiter is paid in stages to run a dedicated search. Contingency search usually suits roles with larger candidate pools, because the recruiter is paid only if the employer hires a candidate they presented.
Both models can work well. The right choice depends on the role’s difficulty, urgency, and how much attention the search needs.
How Each Model Works
In a retained search, the employer pays part of the fee upfront and the rest at milestones or on hire. In return, the firm commits time to research the market, approach passive candidates, and manage the process. Retained firms often work exclusively on the search.
In a contingency search, the employer pays only when a hire is made, often a percentage of the first-year salary. Several agencies may compete to fill the same role, which can mean faster candidate flow but less depth on any single search.
Retained and Contingency Search at a Glance
- Best for: retained suits leadership and specialized roles; contingency suits mid-level roles with many qualified applicants.
- Payment: retained is paid in stages; contingency is paid only on a successful hire.
- Exclusivity: retained searches are usually exclusive; contingency searches often are not.
- Confidentiality: retained firms are often better suited for replacing someone quietly.
- Candidate approach: retained firms typically spend more time reaching people who are not actively looking.
Costs Beyond the Fee
Search costs can include travel for interviews, assessment tools, and relocation support for the hired candidate. Ask firms which expenses are included in their fee and which are billed separately. Clarify how long the firm will take to present a first slate of candidates, how often you will receive progress updates, and who on their team will handle the search day to day.
Clear expectations up front prevent frustration halfway through a search.
How to Choose a Firm
Ask each firm about recent searches for similar roles, how they assess candidates, and what happens if a hire leaves within the first months. Many firms offer a replacement guarantee period, so get the terms in writing. Ask how they handle diversity in candidate slates and how they communicate progress.
To find firms with relevant industry experience, review Domow’s careers and recruitment directory and interview more than one. Comparing a few firms there helps you match the search model and industry experience to the role you need to fill.
Match the Model to the Role
Retained search fits critical, confidential, or specialized hires; contingency fits roles with broader talent pools. Compare payment terms, exclusivity, candidate approach, and replacement guarantees before signing. Domow can help employers find recruiting firms to interview.
Frequently Asked Questions
Fees vary, but many firms charge a percentage of the hired candidate's first-year compensation. Retained firms often bill in stages, while contingency firms bill only on hire. Ask each firm for its fee structure, payment schedule, and what expenses are included.
Yes, many employers work with several contingency agencies on the same role. It can increase candidate flow but may create duplicate submissions. Set clear rules about candidate ownership and communication so agencies and your hiring team avoid confusion. Clear rules prevent disputes over fees.
It is a promise that the recruiter will search again, often at no extra fee, if the hired candidate leaves within a set period. Terms vary widely. Get the guarantee period and conditions in writing before the search begins. Read the guarantee terms before signing.
Retained search is often best for executive, highly specialized, or confidential roles where the right candidates are not actively applying. It also helps when the search needs deep market research or careful handling of internal and external communication. Discuss timelines and confidentiality early.
