Guide
Retained vs contingency search: which fee model fits the mandate
Updated
The decision is not really about cost. It is about whether you need the market covered or simply need to meet candidates who are already visible.
What you are actually buying
Under a retainer you buy process:
- a defined research phase;
- a mapped view of who exists in the market;
- direct approaches to people who are not looking;
- structured assessment;
- the firm's time whether or not the search ends in an appointment.
Under contingency you buy introductions. The firm invests only what it can afford against a probability of being paid. So its rational strategy is to send its strongest available candidates quickly and move on if you do not engage. Both are legitimate; they are not the same service.
A straight comparison
| Point | Retained | Contingency |
|---|---|---|
| When you pay | In staged instalments across the search, conventionally three | Only if a candidate the firm introduced is appointed |
| Exclusivity | Normally exclusive for the mandate | Normally non-exclusive; several firms may work the same role |
| Market coverage | Systematic: the firm sets out to identify the relevant population | Opportunistic: whoever is in the network and available now |
| Approaching people not looking | Central to the model | Limited, because the firm carries the cost with no certainty of a fee |
| Confidentiality | Manageable, since one firm controls the messaging | Difficult, since multiple firms are describing your role in the market |
| Client commitment required | High: briefing time, interview discipline, timely feedback | Low, which is precisely why coverage is thinner |
| Risk if no appointment | Sits with the client, who has paid for the process | Sits with the firm, which has worked without payment |
When retained is the right call
- The appointment is confidential, most obviously where an incumbent is still in post and does not know.
- The candidate population is small, senior, or not visibly in the market.
- You need evidence that the whole market was considered, which boards and investors increasingly ask for.
- Diversity of the longlist matters and cannot be left to whoever happens to apply.
- The cost of a wrong appointment at this level dwarfs the difference in fee, which at board level it usually does.
When contingency is perfectly sensible
- The role is well defined, well understood and has a deep visible pool.
- You can move fast and are content to see a smaller, self-selected field.
- You are testing the market before committing to a full process.
- Budget genuinely will not stretch to a retainer, in which case be honest about the coverage you will get.
The hybrid nobody explains
A container arrangement, a modest engagement fee credited against a completion fee, is underrated. It gives the firm enough certainty to commit research time, and keeps most of the fee tied to a result. For a senior hire below board level, or a first-time search client, it is often the most rational structure. It is readily negotiated.
Whichever model you choose, you pay as the hiring employer. Charging a work-seeker a fee for work-finding services is prohibited, save for narrow exceptions that do not extend to executive appointments (gov.uk).