Why Retained Search Makes More Sense for Recruitment Agencies

Contingency Search

Contingency search—often called a “no-win, no-fee” model—is a performance-based recruitment service. As a recruitment agency, you engage with a client to fill a specific position, but only receive payment once a successful hire has been made. Typically, the fee equates to around one-third of the candidate’s anticipated first-year total cash compensation.

This model offers clients a zero-risk, results-only approach with no upfront costs. It’s also non-exclusive, meaning clients may engage multiple agencies at once to accelerate the search process.

While contingency search can be faster-paced, it’s important to note the trade-offs. Because compensation is only received upon placement, and often in competition with other firms, agencies may be incentivized to prioritize speed over depth. This can sometimes result in candidates being presented without full vetting or strategic alignment—placing more of the burden on the client’s internal team to screen and manage applicants.

Additionally, contingency searches tend to focus on active job seekers—candidates who are already in-market and may be under consideration elsewhere. Agencies often submit high volumes of profiles, aiming for a “numbers game” approach, which can overwhelm internal teams and lead to less efficient hiring processes.

Another challenge is sustainability. If a role proves too difficult to fill or the hiring timeline extends, contingency recruiters may shift their focus to more promising or immediate opportunities—leaving the client without continued support.

Retained Search

Retained search is a more strategic, high-commitment recruitment model that is ideal for critical, senior, or confidential hires. Under this approach, the client engages your agency on an exclusive basis and pays a retainer fee, which is usually broken into three installments—typically totaling one-third of the successful candidate’s first-year compensation. These payments are linked to defined milestones (such as timeframes or deliverables), encouraging timely and results-driven delivery.

As a retained search partner, your role extends beyond candidate sourcing. You act as a trusted advisor, investing time to understand your client’s business, culture, and long-term talent needs. This model allows for a deeper, more tailored search that taps into both active and passive candidate markets—especially those not openly seeking new opportunities.

Benefits of retained search for clients include:

• Focused commitment: As the exclusive recruitment partner, you allocate dedicated resources and attention to the search.
• Thorough market coverage: You conduct in-depth sourcing and outreach, including confidential approaches to passive talent.
• Strategic alignment: You work closely with the client to define success criteria and provide market insights, positioning the role competitively.
• Candidate experience management: You handle outreach, vetting, and communication, ensuring a seamless and professional journey for top-tier candidates.
• Confidentiality: For sensitive roles, especially at the executive level, retained searches allow for discreet market engagement—protecting both client and candidate interests.

While retained search involves a higher financial commitment, it delivers long-term value through strategic hiring, deeper market penetration, and alignment with organizational goals.