Executive hiring has grown increasingly complex, evolving alongside the rapid digital transformation and global market volatility in recent years. Today’s executive leaders must lead through change, thrive through uncertainty, and harness the potential of emerging technologies — while at the same time possessing the emotional intelligence and soft skills to align with organizational culture. It is the job of executive recruiters to identify, attract, and evaluate these agile and exceptional candidates — and execute a successful, long-term hire. 

When your organization needs executive-level hiring, the difference between contingent vs. retained search is key. Understanding how these executive search models work, what benefits and challenges they bring, and when they work best will help you decide which hiring approach is right for your executive recruitment strategy.

Understanding Contingent Search

Contingent search, or contingency search, is a recruitment approach in which the client company pays the recruiter for successfully sourcing and placing a candidate in an open position. There is no up-front cost, and the recruiter’s payment is contingent upon making a successful placement. 

Due to the pay structure of contingent search, contingent search agents typically take on multiple clients at once and work to fill positions quickly. Similarly, it is common for a company to hire more than one contingency firm at a time. The partnership isn’t exclusive; it’s transactional. 

While it may vary between firms, contingency recruiters primarily focus on sourcing and presenting qualified candidates, rather than managing the entire hiring process. The limited involvement of a contingency recruiter reflects the transaction-based nature of the relationship, with the client company retaining responsibility and control over most of the hiring process. 

Analyzing The Pros and Cons of Contingent Search

Contingent search offers distinct advantages and limitations that an organization should understand when considering which search method best suits its hiring needs.

The Pros

• No up-front fees. Payment is only due upon successful placement.
  
  
• Non-exclusive arrangement. A company may work with multiple contingent recruiters to expand its reach.
  
  
• Flexibility. Many contingent agencies do not require a contractual obligation. 
  
  
• Priority on fast placement. The competitive nature of contingent search prioritizes fast results.
  
  
• Typically lower fees. Relative to retained search, cost tends to be lower.
  
  
• Available talent. Contingent search focuses on candidates who are seeking a new position and are available quickly.
  
  
• Client control. Client companies tend to retain control of the hiring process.
  
  
• Replacement guarantees. If a new hire does not work out during a specified time frame, many contingent firms offer to find a replacement at no additional cost.
  
  

The Cons

• Less dedicated attention. Contingent recruiters manage multiple clients at once.
  
  
• Non-exclusive arrangement: A contingent recruiter can move on to more lucrative projects at any moment.
  

• Limited candidate vetting: Holistic candidate evaluation, vetting, and verification steps may be less rigorous.
  
  

• Less focus on quality. Quantity and speed are prioritized over carefully targeted candidate matches.
  
  

• Less access to passive talent. Contingency recruiters focus on active job seekers, potentially missing top talent that isn’t actively looking.
  
  

• More client responsibility. Control of the hiring process — and many tasks — fall back on the client.

How Does Contingency Search Work?

When a company hires a contingency search firm to fill an open position, it may simultaneously engage just one firm or multiple recruiters to help identify and attract appropriate candidates. The contingency recruiter will follow some routine steps to fill the role.

Source candidates: The contingency recruiter will actively source candidates for the role through job boards, online talent networks, industry contacts, and their database. 

Market the position: The recruiter writes a job description and promotes it to qualified candidates. 

Screen and present candidates: After preliminary assessments, resume reviews, and initial interviews, the best-fit candidates will be recommended to the client company.

Coordinate interviews and negotiation: The recruiter will assist with interviews, offers, and compensation negotiations. 

The contingent recruiter focuses on efficiently matching actively available candidates to position openings, emphasizing speed to placement over deep vetting or careful matching. 

Post-placement, the contingent recruiting agency might have some level of involvement in post-placement follow-up. 

Understanding Retained Search

In retained search, a company engages an executive search firm in an exclusive partnership to fill specific leadership positions, often C-suite level and senior executives. Unlike contingent search, retained recruiters require a contractual commitment and an upfront fee. This retainer is paid at the beginning of the partnership. The retained search firm is paid for the executive search regardless of the outcome. 

The retained search firm dedicates significant resources and works with a limited number of client firms to focus deeply on each client’s unique needs. The firm works very closely with the client throughout the executive hiring process. The approach creates a long-term partnership rather than a transactional relationship. 

Retained search firms typically undertake the executive hiring process from start to finish — and beyond. From engaging in thorough initial meetings with the client and stakeholders to defining the role requirements and conducting market research. 

Retained firms have extensive networks, connections to passive candidates, and competitive market intelligence. A retained recruiter targets a perfect match for the position rather than quickly filling a role. In addition, retained search firms assist with onboarding and integration support. 

Analyzing The Pros and Cons of Retained Search

Retained search offers a different approach to executive recruitment and has its own set of advantages and challenges to consider. 

The Pros

• Dedicated focus and commitment. A retained firm works exclusively on your open executive position.
  
  
• True partnership. The retained search firm serves as an extension of your business throughout the hiring process and a partner in your success.
  
  
• Comprehensive vetting. Retained recruiters conduct in-depth, holistic candidate evaluation, assessment, and reference checking.

• Access to passive candidates. A hallmark of retained search is access to high-performing candidates who aren’t actively seeking a change.
  
  
• Confidentiality and expertise. Retained firms work regularly with sensitive searches and executive talent.

• Strategic consultation. The retained search includes market insights, compensation guidance, and competitive analyses. 
  
  

• Long-term hires and partnerships: The researched, targeted nature of retained search fosters long-term candidate placement and client partnership.
  
  

• Replacement guarantees. If a new hire does not work out during a specified time frame, retained firms offer to find a replacement at no additional cost.

The Cons

• Higher initial investment and financial commitment. Retained recruiters require an upfront payment, a higher overall cost, and are paid regardless of outcome.
  
  
• Longer timeframe: The detailed, comprehensive nature of the search means a longer timeframe for contingency vs. retained search.
  

• Commitment to exclusivity. Exclusivity agreements mean entrusting your search to a single source.
  
  

• Less client control. Client involvement may be limited at some stages, depending on the firm.

How Does Retained Search Work?

When engaging a retained search firm to fill an executive position, a company commits to working exclusively with that firm throughout the executive search process. The retained recruiter will follow a comprehensive approach to fill the role. 

• Learn about the client company: Understand the company’s history, culture, and goals in detail.
  
  

• Define the search parameters: Work with the client to create a detailed profile of the ideal candidate, from skills and qualifications to cultural fit.
  
  

• Develop a search strategy: Create a strategy and map the market.
  
  

• Source and assess candidates: Use established networks and databases, industry connections, and outreach to source top candidates, including passive talent.
  
  

• Conduct detailed and thorough evaluations: Interviews, evaluations, extensive reference checks, and assessments for alignment with cultural fit.
  
  

• Present a curated list of candidates: Only the top candidates are presented to the client.
  
  

• Manage the selection process: The retained recruiter manages every aspect of the interviewing and evaluation process.
  
  

• Navigate offer and onboarding: The recruiting firm provides partnership and support through offer, negotiations, and post-hire onboarding.

With an emphasis on quality, comprehensiveness, and strategic and holistic alignment, a retained search firm prioritizes finding the ideal candidate for long-term success. 

Retained search firms typically charge a percentage of the placed executive’s first-year total compensation (salary and bonuses). After the initial retainer is placed, the firm and client will have established a pay structure for the balance. 

Post-placement, retained search firms maintain ongoing communication with both the client and the executive to ensure a successful transition and integration.

The Key Differences of Retained vs Contingency Search

When Should You Choose Retained Search vs Contingency Search?

Different types of hiring needs might benefit from a particular search method. Here are some examples of when each hiring method might be a better fit: 

Blending Retained and Contingency Search: A Hybrid Approach

Organizations are increasingly adopting a hybrid approach to executive search because of the complexity of executive hiring and the various needs one company might have within talent acquisition.

Rather than choose explicitly between retained search vs. contingency search, a blended model can offer an ideal balance of commitment and flexibility, cost efficiency, and targeted talent identification. 

Examples of How and When a Hybrid Search is Beneficial

By maintaining relationships with select contingency recruiters for mid-level positions while engaging a trusted retained search firm for CEO positions and other C-suite and executive leadership roles, a company can build a comprehensive recruitment strategy to leverage the best of each search model effectively. 

The hybrid retained and contingency models can be particularly valuable during times of transition or rapid growth when a company must scale talent recruitment according to new needs. Retained recruiters can take on executive hiring, while contingency recruiters can manage more immediate hiring needs. 

This strategy can provide a perfect balance when an organization has blended needs. 

Final Thoughts

The choice between retained search vs. contingency recruitment impacts an organization’s recruitment strategy and largely depends on its talent acquisition needs and goals. 

Retained search offers dedicated attention, a comprehensive process, and market intelligence to secure a targeted match through an exclusive partnership. Retained recruiters excel at confidential searches and sourcing passive talent for the C-suite, senior leadership, and highly specialized roles. The depth and detail of this process require an exclusive commitment, upfront retainer, and contractual payment, regardless of the outcome. 

Contingency search provides cost flexibility, speed, and access to candidates who are actively seeking and ready to hire. It is well-suited to mid-level roles, filling multiple positions simultaneously, and time-sensitive searches. The focus of contingent search of efficiency and speed can mean less rigorous vetting and candidates that aren’t as strategically aligned.

Hybrid models blend the combined strengths of contingency and retained recruiters to address varying needs within an organization.

Whichever model you choose, the most successful executive recruitment outcomes happen when you engage a firm that invests in a strategic partnership for your hiring process and a long-term relationship with your organization. The mutual investment of time in such a partnership creates a foundation for successful placements and valuable, enduring support that will extend beyond any one filled position.

FAQs

What is the main difference between retained and contingency search?

Retained firms are paid upfront and throughout the search process, working exclusively on a position in depth until it is filled. Contingency recruiters get paid only when a candidate is successfully placed, often working on multiple similar searches simultaneously without exclusivity. 

How long does each search model typically take?

Retained searches typically take three months to one year for executive and C-suite positions, with complex searches sometimes extending beyond a year. The depth and customized approach of retained search is extended in this extended timeline. Contingency searches generally move faster, within one to two months for mid-level positions, though it could take longer for more specialized roles. 

Is retained search worth the higher cost?

Retained search is worth the investment, where the multi-faceted costs of an unsuccessful hire can far outweigh the search fee. The dedicated attention, market research, and thorough vetting process justify the cost when quality, confidentiality, and comprehensive candidate assessment are priorities.