Retained Search vs Contingency Recruitment: Fees and When Each Makes Sense
Most businesses have used contingency recruiters. Fewer have used retained search, and the fee structure puts people off before they understand what they are paying for. Here is the comparison without the sales pitch.
The fees
Contingency: 15 to 25% of base salary, paid only when someone starts
Retained: 20 to 35% of first-year total compensation, paid in three instalments: on engagement, on shortlist, on appointment
By role, retained fees cluster at 25 to 28% for Director level, 25 to 30% for a COO, 28 to 33% for a CFO and 30 to 33% for a CEO
The guarantees
Contingency: a rebate period, typically 8 to 12 weeks
Retained: a replacement guarantee, typically 6 to 12 months
What you are actually buying
Contingency pays for speed and reach. The recruiter is paid on the result, so they work several briefs at once and send you the candidates who are already looking. For roles under about £80,000 with a deep active market, that is often fine.
Retained pays for exclusivity and depth. The recruiter works one brief at a time, maps the whole market including people who are not looking, and spends the first fortnight on your culture rather than on a job ad. For a Head of, Director or C-suite hire, the people you want are rarely applying to anything.
When contingency is the right call
The role is below Head of level and the market is active
You are running several agencies in parallel and are comfortable with duplicate CVs
Speed matters more than fit, and you can absorb a mis-hire
When retained is the right call
The hire changes the shape of the business: first CFO, first CTO, first Head of People
The best candidates are employed, happy and not looking
The cost of getting it wrong is high. A poor manager-level hire costs UK businesses around £132,000 on average once lost productivity and management time are counted
You want one firm accountable for the outcome, with a guarantee that outlasts the probation period
We offer both retained and permanent search, and we will tell you on the first call which one your brief needs. The options and how fees work are on how we work with you. Common questions, including how we charge, are on the FAQ.
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