Two recruitment models that work very differently. How to choose the right one, and what each actually costs.
If you're about to recruit a senior role, one of the first decisions you'll make is which recruitment model to use. The fee structures sound similar on the surface, but the two approaches produce very different outcomes.
I'm a retained recruiter, so you'll see where I land. The goal is to help you make an informed choice for your next hire.
What contingent recruitment actually is
Contingent recruitment is the model most people know. You engage one or more recruiters. They search for candidates. If one of their candidates is hired, that recruiter gets paid — usually 15 to 20 percent of the placed candidate's first-year salary. If no-one is hired, no fee is paid.
It's the dominant model in volume recruitment, and for good reason. The risk sits with the recruiter. The client only pays if they get a result.
What retained search actually is
Retained search works differently. You engage one recruiter exclusively. They commit their time to your search. The fee — usually 25 to 33 percent of first-year salary — is paid in stages: a portion upfront, a portion at shortlist, and the balance on placement.
Because the recruiter is paid for the work, not just the outcome, the work itself is different. Market mapping. Direct approaches to people not actively looking. Long calibration conversations. Thorough assessment. Honest shortlist presentation. Detailed reference checks.
Retained is the standard model for senior and confidential appointments — because at certain levels, the contingent model breaks down.
Where contingent works well
Contingent recruitment is a legitimate choice when:
- The role is well-defined and the candidate pool is large
- Speed matters more than depth of assessment
- The role isn't confidential — multiple recruiters working it doesn't cause problems
- Your in-house team can do the heavy lifting on assessment and you just need candidate flow
- A reasonable shortlist within a few weeks is enough
If you're hiring a Coordinator, an Administrator, or a role you've recruited successfully before, contingent often works fine.
Where retained is the right choice
Retained search is the right model when:
- The hire is senior — Head of, Director, GM, CEO
- The role requires market mapping, not just advertising
- Confidentiality matters — internal restructure, incumbent still in seat, sensitive replacement
- Cultural fit and long-term alignment matter
- The cost of a mis-hire is significant — in turnover, team disruption, lost momentum
- You want one accountable point of contact who's invested in the outcome
In not-for-profit, aged care, NDIS, and education — the sectors I work in — most mid-to-senior hires fall into the retained category. Smaller candidate pools, higher stakes, and the wrong appointment causes real harm.
The four real differences
Beyond fee structure, this is what actually differs.
1. Exclusivity and focus
In contingent, three or four recruiters might be working the same role. Each is racing to submit candidates. None has time to do deep work.
In retained, one recruiter has the role exclusively. They invest the time because the work is funded.
2. Source of candidates
Contingent relies heavily on candidates who are actively looking — job board responses, easy-apply submissions on professional networks, existing database. That's a fraction of the market.
Retained reaches passive candidates — people who aren't applying for jobs but might consider the right one if approached well. For senior roles, that's where the best candidates almost always sit.
3. Assessment depth
Contingent screening is usually quick — a phone call, a CV review, a submission. The recruiter doesn't have time for more, because they may not be paid.
Retained assessment is rigorous — structured interviews, behavioural questioning, reference probing, and written shortlist documentation. The shortlist comes with recommendations, not just CVs.
4. Accountability
In contingent, if the role isn't filled, the recruiter moves on. They've borne the cost, but you've borne the time.
In retained, the recruiter is committed to the outcome. Most retained search firms will rework a search at no extra cost if the first round doesn't produce a hire — because their reputation depends on completing it.
What it actually costs you
Take a real example. You're hiring a Head of People and Culture at $180,000 base.
The retained search costs about $21,600 more on paper. Now factor in what's not on paper:
- Probability of successful placement: in my experience, contingent ~50 percent on first try, retained ~90 percent.
- Probability of 12-month retention: contingent placements ~70 percent retained, retained ~85 to 90 percent.
- Time to shortlist: contingent often drifts past 6 weeks; retained typically 4 to 6 weeks.
- Mis-hire cost: half to two times annual salary, depending on seniority. On a $180k role, that's $90,000 to $360,000 — and for executive roles, research from the Center for American Progress and others puts it materially higher. See our costed mis-hire breakdown.
The fee differential is small compared to the cost of getting the hire wrong. That's why senior hires almost always justify the retained model.
How to choose for your next role
Ask these five questions:
- Is this role critical to organisational performance? If yes, retained.
- Is the candidate pool small or hard to reach? If yes, retained.
- Does confidentiality matter? If yes, retained.
- Is the cost of a mis-hire significant? If yes, retained.
- Have you tried contingent on similar roles and ended up doing the work in-house anyway? If yes, retained.
If you answered no to all five, contingent is probably the right choice.
A summary
Contingent is good at what it's designed for: volume, speed, well-defined roles. Retained is good at what it's designed for: senior, sensitive, strategic, hard-to-reach hires.
Neither model is universally better. The mistake is using the wrong model for the role. The most common version of the mistake is using contingent for senior hires because the upfront cost looks lower, then paying for it later in time, mis-hires, and reputational drag.
Sources
- SHRM — The Real Costs of Recruitment (replacement cost benchmarks of 50–200% of annual salary)
- Center for American Progress — There Are Significant Business Costs to Replacing Employees (senior executive replacement up to 213% of salary)
- Patterson Recruitment market observations across 20+ years in purpose-driven sectors
Weighing up retained vs contingent for your next senior hire? Patterson Recruitment is a retained executive search firm placing mid-to-senior leaders across not-for-profit, aged care, NDIS, and education. Book a confidential calibration call with Gab or call 0416 170 100.
This article is current as at May 2026. Fee ranges and timelines are indicative for the Australian market and may vary by sector, role complexity, and search firm.
