What is the difference between contingent and retained recruiting?
In contingent vs retained recruiting, a contingent recruiter is paid only if the client hires a candidate they introduced. A retained recruiter is paid in instalments, usually starting before a hire, and typically works the search exclusively. Contingent shifts risk to the recruiter; retained shifts commitment to the client.
At a glance
| Contingent | Retained | |
|---|---|---|
| When paid | On hire (start date) | In stages: at engagement, at shortlist, at hire |
| Exclusive? | Usually not | Usually yes |
| Client risk | Low up-front | Pays even if no hire |
| Recruiter risk | High; unpaid if no hire | Lower |
| Typical roles | Volume or mid-level | Senior, confidential, hard to fill |
| Recruiter effort per role | Spread across many roles | Concentrated on one |
How are retained fees staged?
Stages are negotiated. Example only: total fee 36,000 on a USD 120,000 base (30%), paid one-third on engagement (12,000), one-third at shortlist delivery (12,000), one-third on hire (12,000). If no hire occurs, the recruiter keeps the first two instalments unless the agreement says otherwise.
Which should I offer?
- Offer contingent to win trust with new clients and for roles many firms can fill. Expect competition from other recruiters and in-house teams.
- Offer retained when the role is senior, confidential or needs sustained effort, and the client will commit exclusivity.
- A hybrid, sometimes called container, takes a smaller up-front deposit credited against the final fee. Name it clearly in the agreement.
How do you choose between contingent and retained?
Ask four questions about each search:
- How hard is the role to fill? Scarce skills and senior roles justify more recruiter time, which favors retained.
- Is the client prepared to commit? A client who will not give exclusivity or pay up front is usually a contingent client.
- Is the search confidential? Replacing an executive quietly is a common reason to retain a recruiter.
- How many other recruiters are working on it? If the role is open to many firms, a contingent recruiter competes on speed.
Step by step: put the model in the agreement
- Name the model: contingent, retained or container.
- State what triggers each payment, such as a signed engagement, a delivered shortlist or the candidate's start date.
- Define compensation for the fee calculation. See placement fee percentage.
- Say whether the search is exclusive and for how long.
- Add the guarantee period and the remedy: replacement search or refund.
- Add a protection period for candidates you introduced.
- Have both parties sign before you submit a candidate.
Common mistakes
- Offering retained terms to a client who will not commit to exclusivity.
- Starting a retained search without agreed deliverables.
- Working a contingent role for a client who has not signed.
- Leaving out the protection period.
- Calling a deposit "refundable" in conversation but not in the agreement.
Side by side: what to define in a retained agreement
| Term | What to define |
|---|---|
| Deliverables | Shortlist size, number of candidates, date |
| Timeline | Search start, shortlist date, review dates |
| Reporting | Weekly update, who receives it |
| Payment stages | Amounts and triggers |
| Exclusivity | Length, and what ends it |
| Cancellation | What the client owes if they stop the search |
What goes wrong?
Contingent: client hires the candidate through another route and refuses to pay. A protection period clause helps. Retained: unclear deliverables. Define shortlist size and timeline.
FAQ
Can I do both? Yes; set the model per client in writing.
Do retained recruiters guarantee a hire? Not by default; check the guarantee clause.
Is a deposit refundable? Only if the agreement says so.
What is a container search? A hybrid where a smaller deposit is paid up front and credited against the final fee. Define the credit and what happens without a hire.
Which model pays recruiters faster? Retained pays in stages from engagement. Contingent pays when the candidate starts, as the agreement defines it.
Next step: use the fee agreement template.