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Retained Search vs Contingency Recruitment: Which Is Right for Your Startup?

Understanding the difference between retained and contingency recruitment models. When to use each and what to expect.

Magnus Kor Talent Partners
7 min
November 28, 2025
Retained Search vs Contingency Recruitment: Which Is Right for Your Startup?

Retained Search vs Contingency Recruitment: Which Is Right for Your Startup?

When you engage a recruitment agency, you'll typically be offered one of two models: retained or contingency. The choice impacts cost, speed, and quality. Here's what you need to know.

Contingency Recruitment

How It Works

  • No upfront cost
  • Agency is paid only when a candidate is placed
  • Fee: typically 15-25% of first-year CTC
  • Multiple agencies may work on the same role

    • Pros

  • Zero financial risk if no hire is made
  • Agencies are motivated by speed
  • Good for standard roles with large candidate pools

    • Cons

  • Agencies prioritise easy-to-fill roles over yours
  • Less investment in understanding your culture
  • Risk of receiving high volume, low quality candidates
  • Your role competes with other clients for the recruiter's time

    • Retained Search

    How It Works

  • Upfront engagement fee (typically 20-33% of total fee)
  • Dedicated search effort with exclusive focus
  • Structured process with regular reporting
  • Fee: typically 25-33% of first-year CTC

    • Pros

  • Dedicated resources working exclusively on your search
  • Deeper understanding of your requirements and culture
  • Access to passive candidates who aren't on the market
  • Structured process with timelines and accountability

    • Cons

  • Financial commitment regardless of outcome
  • Higher total fee than contingency
  • Longer process (thoroughness vs speed)

    • The Magnus Kor Approach

    We offer three engagement models designed for the realities of startup hiring:

    Priority Search (Retained-Lite)

  • 25% of CTC with just 5% upfront
  • Dedicated search within 15 business days
  • 90-day replacement guarantee
  • Best for: urgent leadership hires

    • Partnership Search (Contingency+)

  • 20% of CTC with zero upfront
  • Quality-focused contingency model
  • 60-day replacement guarantee
  • Best for: standard senior hires

    • Growth Partner (Embedded)

  • $500/month retainer + 15% per placement
  • Ongoing partnership for teams making 3+ hires
  • 90-day guarantee
  • Best for: scaling teams with continuous hiring needs

    • How to Choose

    Use Priority (Retained) when:

  • The role is VP/C-level
  • You need the hire within 30 days
  • The role requires highly specialised skills
  • Confidential search is required

    • Use Partnership (Contingency) when:

  • The role has a reasonable candidate pool
  • Timeline is flexible (30-60 days)
  • Budget is tight but you need quality

    • Use Growth Partner when:

  • You're making 3+ hires in 6 months
  • You want a consistent recruiting partner
  • You need ongoing talent pipeline

    • Explore our models in detail on our For Startups page, or contact us to discuss which approach fits your current hiring needs.

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