Employers who work with recruitment firms will usually encounter two models: contingency and retained. They differ in how the firm is engaged, how it is paid and how it approaches the search. Choosing the right model for the appointment can improve both the speed and the quality of the outcome. This guide explains how each works and when each is most appropriate.
How contingency recruitment works
In a contingency arrangement, the recruitment firm is paid when a candidate it has introduced is appointed. The client typically makes no upfront commitment, and may brief more than one firm at the same time. The firm draws on its database, its networks and its advertising to find suitable candidates, and the speed of the first response can matter.
This model works well for roles where there is a reasonable supply of candidates, where speed is important and where volume is a factor.
How retained search works
In a retained arrangement, the client engages one firm to carry out a defined search, usually on an exclusive basis, and makes a commitment at the outset. The firm then dedicates time to the assignment, researches the market in depth, approaches candidates directly and manages the process from brief to appointment.
This model is usually used for senior, scarce or confidential appointments, where the right person is unlikely to apply to an advertisement and where thorough research, discretion and a considered approach are essential.
The main differences
Commitment: contingency requires none upfront, while retained search involves a commitment at the start
Exclusivity: contingency is often open to several firms, while retained search is usually exclusive
Focus: contingency firms balance many roles, while retained search involves dedicated attention to a single mandate
Candidate pool: contingency often draws on those who are known or applying, while retained search maps the whole market
Confidentiality: retained search is better suited to discreet appointments
Typical roles: contingency suits a wide range of roles, while retained search is used for the most senior or hardest-to-fill appointments
When contingency works well
The role is common and candidates are readily available
Speed is a priority
The appointment is at a level where a broad shortlist is useful
The business has a clear brief and is comfortable selecting from the candidates presented
When retained search works well
The role is senior, strategic or business-critical
The skills are scarce and the best people are not looking
Confidentiality is important
The business wants an in-depth view of the market before deciding
Earlier attempts to fill the role have not worked
Common misconceptions
Retained search does not guarantee a particular candidate. It guarantees dedicated effort and a thorough process
Contingency recruitment is not inferior. It is suited to different roles and circumstances
The right model depends on the appointment, not on the size of the employer
The lowest fee is not always the lowest cost, because a poor appointment or a long vacancy can be far more expensive
Questions to ask any recruitment firm
How well do you know this sector and this level of role?
Who will work on our assignment, and will they still be here next year?
How will you reach people who are not looking?
How do you assess candidates beyond the CV?
What checks are completed before candidates are presented?
What happens if the appointment does not work out?
How SET Consulting can help
SET Consulting works across permanent, contract, temporary and project staffing, and offers executive search and market mapping for senior and confidential appointments. We are happy to advise on the approach that best suits your appointment, whatever its level. Our consultants bring more than twenty years of South African market experience and a median tenure of more than a decade.
Frequently asked questions
Which is cheaper, retained or contingency recruitment?
It depends on the appointment and the cost of a poor outcome. The more useful comparison is the total cost of the vacancy and of a mis-hire, rather than the fee alone.
Is retained search only for executives?
It is most often used for senior and scarce roles, but it can be appropriate for any appointment where confidentiality and a thorough search matter.
Can I use more than one recruitment firm?
With contingency arrangements, many employers do. Retained search is normally exclusive to one firm for the duration of the assignment.
How do I know which approach to choose?
Consider the seniority of the role, the scarcity of the skills, the need for confidentiality and the urgency. A conversation with an experienced consultant can help you decide.
Read more about our work in this sector.