I’ve watched founders run a retained search for a mid-level IC while three other agencies were working the same req. Six weeks. Zero offers. Forty thousand dollars committed in retainer and milestones before anyone got hired. Nobody told them it was the wrong model for that role \u2014 they did what most founders do and trusted the recommendation they were given. The incentive just ran the other way.<\/p>\n\n\n\n
Worse: they paid the retainer without locking in real exclusivity. Nothing in the agreement stopped three contingency firms from quietly sourcing the same seat in parallel. That’s not a flaw in retained search \u2014 that’s a contract that didn’t do its job. You paid upfront for a guarantee you never actually got.<\/p>\n\n\n\n
Most recruiters won’t tell you when retained is the wrong call. I will.<\/p>\n\n\n\n
In technical recruiting, there are two dominant models: contingency and retained. Here’s how each actually works.<\/p>\n\n\n\n
Contingency: you pay nothing until someone gets hired. The recruiter works at risk and collects a fee \u2014 typically 20\u201325% of first-year base \u2014 when you make an offer and it’s accepted.<\/p>\n\n\n\n
Retained: you pay a portion upfront, with the remainder tied to milestones \u2014 often split into thirds at kickoff, shortlist, and hire. In exchange, the recruiter dedicates focused time to your search. That arrangement should include written exclusivity. If it doesn’t, you’re paying retained prices for contingency behavior.<\/p>\n\n\n\n
On a $220k VP of Engineering role, a 25% contingency fee is $55k. Retained on the same role often runs a few points higher in practice \u2014 28\u201333% isn’t unusual, sometimes with a minimum fee or a non-refundable kickoff payment built in. So retained can cost more in absolute dollars. The gap is usually smaller than founders expect going in, and it’s not really the point.<\/p>\n\n\n\n
What retained buys you is dedicated time, real exclusivity, and a recruiter who’s committed before a single candidate shows up. What it costs you is upfront risk \u2014 a third (or more) of that fee is due before you’ve seen anyone. Contingency flips the risk: nothing due until someone’s hired, but no guarantee anyone’s working your req exclusively either.<\/p>\n\n\n\n
That’s the structure. Here’s when each one is actually right.<\/p>\n\n\n\n
Contingency works when the role is clearly defined and the market for that skill set is reasonably active. Senior backend engineer. Full-stack IC with a specific stack. Frontend lead. Strong mobile developer. These roles exist in volume, and a good recruiter will work them hard because the path to a fee is clear.<\/p>\n\n\n\n
It also works when you have a functioning interview process \u2014 calibrated interviewers, reasonable timeline, comp that’s competitive for your stage. If you’re not sure whether your process is ready, start here<\/a>. On an open contingency search, the recruiter’s job is sourcing and screening. Everything downstream needs to be ready on your end.<\/p>\n\n\n\n One more thing worth naming: there’s a real middle option \u2014 engaged or exclusive contingency. Same no-upfront structure, but you commit to one recruiter for a defined window instead of running the role through three or four agencies at once. It’s what a lot of startups actually want. Open contingency across multiple firms breaks down because nobody invests real sourcing time in a coin-flip. You get whoever submits fastest, not whoever fits best. Naming the exclusivity, even without paying a retainer, fixes that.<\/p>\n\n\n\n I filled three senior engineering roles this way for a seed-stage startup: one recruiter, exclusive window, no retainer. Under 30 days. 5 profiles, 4 offers, 3 starts. The roles were defined, the founders moved fast, and exclusive contingency was right because the constraint was finding people, not the search strategy itself. You can read the full story here<\/a>.<\/p>\n\n\n\n Retained makes sense when the constraint actually is the search itself.<\/p>\n\n\n\n The role is genuinely hard to fill.<\/strong> Not “we’ve been looking for a while” hard \u2014 the intersection of skills, seniority, and domain is narrow enough that a contingency search will produce a shallow pipeline. A CTO who has both technical depth and board-level presence is the classic example. Founders consistently hire the wrong stage of CTO<\/a> \u2014 exactly the kind of mismatch a focused, retained search is built to catch. An engineering manager who has built distributed teams from scratch at a specific stage. A VP of Product with direct fintech or cybersecurity domain knowledge.<\/p>\n\n\n\n The search is confidential.<\/strong> Replacing a senior leader while they’re still in seat, or finding a CTO before you’ve announced a transition, requires focused effort and real discretion \u2014 not broadcasting the role across a recruiter’s full network hoping something surfaces.<\/p>\n\n\n\n
\n\n\n\nRetained is right when the search is the hard part<\/h2>\n\n\n\n