Contingency and retained are the two main ways recruitment agencies get paid. The difference comes down to when the agency is paid and whether the search is exclusive. In contingency search, the agency is paid only if it places a candidate. In retained search, the client pays an upfront retainer, commonly in instalments, to engage one firm exclusively.
This post explains both models in plain terms. You will see how the fees work, who carries the risk, which roles each model fits, and how the hybrid engaged model sits between them. All fee figures are shown as typical ranges with the source named, not as fixed numbers.
Key takeaways
- Contingency means no placement, no fee. The agency carries the risk of the search.
- Retained means the client pays a retainer upfront, commonly split into instalments. The firm is paid for the work regardless of who is hired.
- Contingency is usually non-exclusive, so several firms compete. Retained is exclusive, so one firm owns the search.
- Contingency fees are commonly cited around 15% to 25% of first-year salary. Retained fees are commonly around 25% to 33%, per Indeed for Employers. These are typical ranges, not fixed rates.
- Engaged (or container) search is a hybrid. The client pays a smaller upfront fee plus the balance on placement.
- Match the model to the role. Contingency fits accessible, urgent, higher-volume hiring. Retained fits senior, confidential, or hard-to-fill roles.
Why it matters
Picking the wrong model wastes time and money. If you hand a senior, confidential search to several contingency firms at once, you can end up with a rushed, less confidential process. No firm is fully committed to finishing it. If you put a high-volume, easy-to-fill role on a retained basis, you pay upfront for work the market could have filled on a success-only basis.
For agencies, the model you offer shapes your cash flow and your risk. Contingency means you only earn on a placement, so you carry the risk. Retained means you are paid for the work as it happens. Knowing the trade-offs helps both sides set expectations before a search starts.
The key ideas
Contingency search
The agency is paid only if one of its candidates is hired. The fee depends on a successful placement, so the agency carries the risk. It is usually non-exclusive, so the client can use several agencies and its own hiring at once. The fee is typically a percentage of the placed candidate's first-year salary, paid on placement (Top Echelon, Indeed for Employers).
Retained search
The client pays the search firm an upfront retainer to engage it exclusively for one search. The total fee is commonly split into instalments. The firm is paid for the work regardless of the outcome. It works only on the assignment and runs a deeper, dedicated search (Top Echelon, TruPath Search).
Fee structures
Contingency fees are commonly cited at roughly 15% to 25% of first-year salary, paid only on a successful hire (Indeed for Employers, Valuable Recruitment). Retained fees are commonly cited around 25% to 33% (Indeed for Employers), with some sources quoting up to about 35% (KiTalent). Boutique retained firms are sometimes cited lower, around 15% to 20% (Valuable Recruitment). All figures vary by industry, seniority, and firm.
A common retained instalment pattern
A frequently cited retained structure is three payments. One-third on engagement or kickoff, one-third at an agreed milestone such as shortlist delivery, and one-third on placement (Indeed for Employers, Top Echelon). This is a common example rather than a universal rule. Fees are billed in stages because much of the work happens early, such as research, market mapping, and outreach (KiTalent).
Exclusivity
Exclusivity is whether the client gives the search to one firm or to several at once. Retained and engaged searches are exclusive, so one firm owns the assignment. Contingency is commonly non-exclusive, though exclusive contingency also exists (Top Echelon). AESC member firms operate on a retained and exclusive basis (AESC).
When each is used
Contingency is most often used for mid-level, specialist, and higher-volume roles with accessible candidate pools (Indeed for Employers, Valuable Recruitment). Retained is typically used for senior, executive, niche, confidential, or hard-to-fill roles where there is time for thorough vetting (Indeed for Employers, Valuable Recruitment).
The hybrid (engaged) model
Engaged search, sometimes called container search, is a hybrid. The client pays a smaller upfront engagement fee to secure the recruiter's commitment and exclusivity. The balance is paid on placement, and the upfront fee is often credited toward the total. It sits between contingency and retained in cost, commitment, and depth (Talentfoot, Top Echelon).
Contingency vs retained at a glance
| Dimension | Contingency | Retained |
|---|---|---|
| Payment timing | Fee due only on a successful placement | Retainer paid upfront, commonly in instalments across the search |
| Fee structure (typical ranges) | Around 15% to 25% of first-year salary (Indeed, Valuable Recruitment) | Around 25% to 33%, sometimes up to ~35% (Indeed, KiTalent) |
| Exclusivity | Usually non-exclusive; multiple firms can compete | Exclusive; one firm works the assignment (AESC) |
| Who bears the risk | The agency; no placement means no fee | The client; the firm is paid for the work regardless of outcome |
| Typical roles | Mid-level, specialist, higher-volume roles | Senior, executive, niche, confidential, hard-to-fill roles |
| Depth of search | Faster, often shallower, candidate pool driven | Deeper, dedicated search with research and market mapping |
How to decide which model fits
Step 1: Look at the role level and how hard it is to fill
For mid-level and specialist roles with a deep, accessible candidate pool, contingency usually fits. For senior, executive, niche, or hard-to-fill roles, retained or engaged tends to fit better because the work is deeper (Indeed for Employers).
Step 2: Decide how much exclusivity and commitment you need
If you want one firm fully committed and confidential, choose an exclusive model. Retained or engaged both work. If you want flexibility to run several firms and your own hiring in parallel, contingency keeps that option open (Top Echelon, National Search Group).
Step 3: Weigh upfront cost against risk
Contingency means zero upfront cost, and the agency carries the risk. Retained means paying upfront regardless of outcome, but it buys deeper vetting and, per industry firms, a higher completion rate. If budget is tight or the role is easy to fill, contingency reduces upfront spend (The Good Search, National Search Group).
Step 4: Check your timeline and confidentiality needs
If you have many urgent openings and want speed, contingency or engaged can move fast. If the search is confidential or needs careful, thorough vetting, retained handles discretion better because only one firm sees the open role (Indeed for Employers, National Search Group).
Step 5: Consider the hybrid if you are between models
If you want recruiter commitment and exclusivity without the full retained cost, an engaged search gives you a smaller upfront fee plus the balance on placement. The upfront amount is often credited toward the total (Talentfoot).
Do this
- Match the model to the role. Use contingency for accessible roles and retained for senior or hard-to-fill ones.
- Agree the fee percentage and what counts as first-year compensation before the search starts.
- Confirm exclusivity in writing so both sides know whether other firms are involved.
- For retained, tie each instalment to a clear trigger, such as engagement, shortlist, and placement.
- Ask retained firms about their vetting depth and completion rate before signing.
- Consider an engaged (hybrid) search when you want commitment without the full retained cost.
- Set a realistic timeline. Retained searches need room for thorough vetting.
Common mistakes to avoid
Using contingency for a confidential senior search
Contingency is commonly non-exclusive, so multiple firms can see the open role. That makes the search less confidential. It also gives no single firm a strong reason to finish a difficult assignment (National Search Group).
Expecting deep vetting on a contingency role
Contingency firms are paid only on placement, so the incentive to move fast can risk lower-quality candidates. If you need careful, repeated vetting, an exclusive model fits better (National Search Group, The Good Search).
Paying retained fees for an easy-to-fill role
Retained means paying upfront regardless of outcome. For mid-level roles with a deep candidate pool, that upfront cost is often unnecessary when contingency can fill the role on a success-only basis (Indeed for Employers).
Not knowing if the fee is on base or total compensation
Search fees are quoted as a percentage of first-year compensation, which may be base salary only or include bonus. Confirm the basis so the final fee is not a surprise.
Assuming all instalments are tied to milestones
Some retained firms tie instalments to milestones like shortlist and offer acceptance. Others tie them to time, such as launch, 30 days, and 60 days. Check which structure applies (The Good Search).
Confusing engaged search with embedded recruitment
Engaged search is a hybrid of contingency and retained for a single search. Embedded recruitment is a separate model where a recruiter works as an in-house extension for a monthly flat fee, used for high-volume or sustained hiring (Valuable Recruitment).
Frequently asked questions
What is the main difference between contingency and retained search?
The main difference is timing and exclusivity. Contingency search pays the agency only on a successful placement and is usually non-exclusive. Retained search pays an upfront retainer, commonly in instalments, to engage one firm exclusively for a deeper search.
How much does each model cost?
Contingency fees are commonly cited at roughly 15% to 25% of first-year salary (Indeed for Employers, Valuable Recruitment). Retained fees are commonly around 25% to 33%, sometimes up to about 35% (Indeed, KiTalent). These are typical ranges and vary by industry, seniority, and firm.
Why are retained fees often paid in instalments?
Retained fees are often paid in instalments because much of the work happens early, such as research, market mapping, and outreach. A common example is one-third on engagement, one-third at a milestone like shortlist delivery, and one-third on placement, though structures vary by firm (Indeed for Employers, KiTalent).
What is engaged or container search?
Engaged or container search is a hybrid of contingency and retained. The client pays a smaller upfront engagement fee to secure the recruiter's commitment and exclusivity, with the balance paid on placement. The upfront fee is often credited toward the total (Talentfoot, Top Echelon).
Which model gives a higher chance of filling the role?
Industry firms associate retained search with a higher completion or fill rate than contingency. They also point to deeper vetting and better handling of confidential searches, because one firm works the assignment exclusively (The Good Search, National Search Group).
Is embedded recruitment the same as retained?
No, embedded recruitment is not the same as retained. Embedded recruitment is a separate model where a recruiter works as an in-house extension of your team for a monthly flat fee, typically for high-volume or sustained hiring rather than a single executive search (Valuable Recruitment).
The bottom line
Contingency and retained are not better or worse than each other. They fit different situations. Contingency keeps your upfront cost at zero and suits accessible, higher-volume roles, with the agency carrying the risk. Retained costs more upfront and is paid regardless of outcome, but it buys an exclusive, deeper search for senior, confidential, or hard-to-fill roles. The engaged model sits in between when you want commitment without the full retained cost.
Whichever model you use, agree the fee, the exclusivity, and the milestones in writing before the search begins. In both models, the candidate CV you send to the client should be clear and consistent, which is the part RefineCV helps agencies with.
Clean CVs for every placement
Contingency or retained, the CV you send the client should look sharp. RefineCV formats candidate CVs into your branded template in one step. Try it free with 10 CVs, no credit card.
Related reading: ATS vs recruitment CRM and recruitment vs talent acquisition.
Sources
- Top Echelon, Should You Work Contingency or Retainer? (2019-11-26): In a contingency search the recruiting firm is paid only on a successful placement and the search is commonly non-exclusive (though exclusive contingency exists); in a retained search the recruiter works exclusively and fees are commonly structured in three instalments (on engagement, at a milestone such as shortlist, and on placement). An engagement-fee hybrid also exists.
- Indeed for Employers, Contingency vs Retained Recruiting (Accessed 2026): Contingency fees are typically 15% to 25% of first-year salary, payable only on a successful hire, and suit lower-to-mid-level roles with larger candidate pools; retained fees are commonly 25% to 33% with a classic structure of three equal instalments (kickoff, shortlist, placement), used for executive, confidential, or hard-to-fill roles where there is time for thorough vetting.
- Valuable Recruitment, Recruitment Agency Fees (2026-05-29): Contingency fees are commonly cited at roughly 15% to 25% of first-year base salary with the agency carrying the risk; retained fees are often 25% to 33% at large firms and 15% to 20% at boutiques, paid in stages regardless of outcome. Embedded recruitment is a distinct model: a recruiter works as a team extension for a monthly flat fee for high-volume or sustained hiring.
- TruPath Search, Retained vs Contingency Search (Accessed 2026): In a retained search the client pays the firm a retainer upfront and the firm works exclusively with the client to fill the position.
- KiTalent, Executive Search Fees Explained (Accessed 2026): Retained search fees are often quoted at roughly 25% to 35% of first-year compensation, billed in stages because much of the effort happens early in the assignment.
- AESC, Client Bill of Rights (Accessed 2026): AESC member firms operate on a retained and exclusive basis for executive search; assignments must be exclusive, so only one firm works the search.
- National Search Group, Retained vs Contingency Recruiting (Accessed 2026): Contingency searches are less confidential because multiple firms can see the open role, firms may abandon difficult searches, and the incentive to move fast can risk lower-quality candidates.
- The Good Search, Contingency and Retained (Accessed 2026): Retained search is associated with deeper vetting, better handling of confidential searches, and a higher completion or fill rate than contingency; contingency offers zero upfront investment and non-exclusive flexibility.
- The Good Search, Executive Search Fees and Search Firm Pricing (Accessed 2026): Retained fees are often paid in thirds because much of the work happens early; some firms tie instalments to milestones (engagement, shortlist, offer acceptance) and others to time (launch, 30 days, 60 days).
- Talentfoot, Retained vs Contingency vs Engaged Executive Search (Accessed 2026): Engaged search splits the difference between models: a partial upfront engagement fee secures recruiter commitment and exclusivity, with the balance owed on placement; the upfront fee typically credits toward the total.