Most hiring leaders we talk to know they need outside search help and don't know which fee structure to ask for. Here's a practical guide to the three models, when to use each, and how to think about the decision.
The short version: retained, engaged, and contingent are three different commitment shapes. They produce different shortlist quality, take different amounts of time, and price differently. The right choice for your role depends on three variables: how passive the candidate pool is, how confidential the search needs to be, and how much you want the firm to be on the hook for the outcome. The AESC (Association of Executive Search and Leadership Consultants) publishes professional standards for each model that are worth scanning if you're new to the space.
Retained search — exclusive, paid in tranches
Retained is the highest-commitment model. The firm is engaged exclusively for the search and paid in tranches (typically thirds) regardless of placement outcome.
Fee structure. 25 to 35 percent of first-year compensation, paid in three tranches: at engagement, at shortlist delivery, and at offer signed. If you cancel mid-search, the tranches paid to date are kept and further tranches are not owed.
What you get. Exclusive engagement. A senior headhunter committing depth of research, market mapping, and direct outreach that pay-on-placement structures cannot afford. Confidentiality by default — most retained searches are not listed publicly. Off-limits coverage protecting your existing leadership team. A replacement guarantee scoped per engagement (typically 90 to 180 days).
When to use it.
- Board-level searches. CEO, board director, public-company C-suite. The exclusivity is required by the role's confidentiality.
- Founder-CEO replacements. The board needs the firm fully committed across the full engagement window because the search has unusual diligence requirements and unusual political sensitivity.
- Sole-incumbent roles. When the existing executive is being replaced and the search must run before the change is announced internally.
- Narrow-market searches. Niches so specialized that paying-on-placement would underprice the firm's research time. Rare clinical specialties, specific regulatory backgrounds, narrow geographic constraints.
When not to use it. Retained pricing on a role that doesn't require its depth is overspending. A typical VP-level role with a 100-candidate addressable pool doesn't need retained's exclusivity. Engaged is the right fit there.
Engaged search — hybrid retained-and-contingent
Engaged is the model we use most. A deposit upfront funds the advertising and dedicated headhunter time the search requires; the balance of the fee is owed only on a successful placement.
Fee structure. 25 to 35 percent of first-year compensation. The deposit is typically 25 to 33 percent of the total fee, due at engagement and reinvested into the search itself — passive-candidate advertising, market mapping, and the dedicated time of the senior headhunter. The balance is performance-contingent: owed when the candidate is placed, not before.
What you get. A dedicated senior headhunter running the search end-to-end, no junior associate handoff. Passive-candidate advertising funded by the deposit. A calibrated shortlist with full diligence. The deposit makes the firm's commitment real; the contingent balance keeps the firm on the hook for outcome.
When to use it.
- VP-level senior roles. Most VP and SVP searches outside the C-suite. The candidate pool is mostly passive, the role has high replacement cost, and you want a dedicated headhunter on it.
- Senior-niche roles. Specialty leadership where the candidate pool is small enough that direct outreach matters but large enough that retained's full exclusivity isn't required.
- Multi-role engagements. When you want one firm running a coordinated multi-role search (a CEO, a CFO, and a CMO all hiring at the same time, for example). Engaged scales to multi-role engagements with the engagement fee quoted to scope.
- When you want shared risk. The deposit signals real commitment from the hiring company; the contingent balance signals real commitment from the firm. The risk is shared, which most senior hiring leaders prefer.
When not to use it. If the role is genuinely board-level confidential or sole-incumbent, retained is the right fit. If the role is mid-level and you're willing to trade depth for speed-and-reach across multiple channels, contingent is the right fit.
Contingent search — paid on placement only
Contingent is the most flexible model. The firm sources, screens, and presents candidates; the fee is owed only if you hire one of them.
Fee structure. 18 to 25 percent of first-year compensation, owed on the candidate's start date. Net 15 standard payment terms. No upfront commitment; you can run contingent firms in parallel with each other and with your in-house team.
What you get. A specialist recruiter running outreach across the candidate pool, presenting candidates as they surface. No exclusive commitment, so multiple firms or channels can run in parallel. A standard 90-day replacement guarantee in most engagements.
When to use it.
- Mid-level professional and clinical roles. Engineers, accountants, RNs, BCBAs, project managers, sales reps where the role is filled regularly and the candidate pool is well-defined.
- One-off senior-niche placements. When a senior role lands on the desk and you want it run alongside other channels rather than committing to an engaged or retained engagement.
- Speed-over-depth situations. When the role is open and the priority is reach across as many sources as possible quickly, even if the resulting shortlist isn't as calibrated.
When not to use it. Contingent on a senior search produces a thinner candidate pool than engaged or retained. The firm can only invest the time per role that the pay-on-placement economics allow. For a CFO, a CMO, a CRO, or a board-adjacent role, contingent is usually the wrong choice.
How to decide
A practical decision framework, in three questions:
1. How confidential does the search need to be?
- Truly confidential (cannot list the role, cannot name the company in outreach): retained.
- Industry-confidential (don't post on job boards, but the role is known internally): engaged.
- Open / public: engaged or contingent.
2. How passive is the candidate pool?
- Mostly passive — the candidate you want is running someone else's company: retained or engaged.
- Mixed — some passive, some active applicants: engaged.
- Mostly active — candidates apply to roles regularly: contingent.
3. How much do you want the firm on the hook for outcome?
- Maximum firm commitment, willing to pay regardless of placement: retained.
- Shared risk — deposit from us, contingent balance from us: engaged.
- Performance-only — pay only on placement: contingent.
If two of three answers point to the same model, that's your model. If they split, the deciding question is usually confidentiality.
What we recommend most often
For context, our practice runs roughly 60 percent engaged, 25 percent contingent, and 15 percent retained. The reason engaged dominates is that most senior searches sit in the middle of the decision matrix — the candidate pool is mostly passive, the role is industry-confidential but not board-level secret, and both sides want shared risk. The model fits the shape of most VP-level and senior-niche roles.
Retained is the right call when the search is genuinely board-level or genuinely confidential. Contingent is the right call for mid-level and one-off niche roles. And there are cases where the conversation moves from one model to another mid-search — usually because the role's scope changed or the candidate pool turned out to be different than the initial market read suggested.
The point is to pick the model that fits the role, not to pick a model and then force the role to fit it. And whatever model you pick, the question of how AI is being used in the search matters at least as much as the fee structure does.
Frequently Asked Questions
What's the difference between engaged, retained, and contingent search?
Three commitment shapes. Retained search is paid in tranches across the engagement regardless of outcome — exclusive, highest commitment, used for board-level and confidential roles. Engaged search is paid via a deposit upfront (which funds passive-talent advertising and dedicated headhunter time) plus a balance owed only on placement — hybrid, exclusive, used for VP-level and senior-niche roles. Contingent search is paid only on placement — non-exclusive, used for mid-level direct-hire and run alongside other channels. The structures correspond to different risk-sharing profiles between hiring company and firm.
When should I use retained search?
Retained is the right structure for board-level, founder-CEO replacements, confidential searches, sole-incumbent roles, or any role where the candidate pool is so narrow that paying-on-placement would underprice the work. The exclusivity allows the firm to commit the depth of research, mapping, and direct outreach that the role requires. Use retained when you need the firm contractually committed across the full engagement window.
When should I use engaged search?
Engaged search is the right structure for VP-level and senior-niche roles where the candidate pool is mostly passive and you want a dedicated headhunter running the search end-to-end, but you also want most of the fee to be performance-based. The deposit funds the advertising and dedicated time the search requires; the balance is performance-contingent. Engaged is the most common model for senior searches that aren't board-level confidential.
When should I use contingent search?
Contingent works best for mid-level professional and clinical roles, one-off senior-niche placements, or any role where speed and reach across multiple recruiting channels matter more than depth. The fee is owed only on placement, so you can run multiple firms or channels in parallel. Contingent does not produce a calibrated shortlist with deep diligence the way engaged or retained does — you trade depth for speed and parallelism.
How much does each model cost?
All three models price as a percentage of first-year compensation, typically 18 to 35 percent depending on tier and structure. Retained runs 25 to 35 percent paid in three tranches at engagement, shortlist, and offer signed. Engaged runs 25 to 35 percent with the deposit (typically 25 to 33 percent of the total fee) due at engagement and the balance on placement. Contingent runs 18 to 25 percent owed only on a successful placement.
Not sure which model fits your search? Tell us the role, the urgency, and the constraints. We come back inside one business day with a recommendation on the fee structure that fits.