What's the difference between contingent and retained recruiting?

With contingency, the client pays only when your candidate is hired and can use other agencies at the same time. With retained, the client pays part of the fee upfront, you're the only firm on the search, and the rest is paid in stages. Retained buys commitment; contingency buys flexibility.

Is exclusive contingency worth it if there's no upfront payment?

Usually, yes. Removing the race is what lets you spend time on people who aren't actively looking, and that's where the best candidates are. Keep the window short and the deliverable concrete so the client feels no risk.

Can a small agency ask for a retainer?

Yes, on the right search. Size matters less than the role and the relationship. A two-person firm with a client who trusts it can win an engaged search for a senior hire; a large firm asking a stranger for a retainer on a staff role won't.

Should I lower my fee in exchange for exclusivity?

Hold the fee. Exclusivity makes the search more likely to succeed for the client, which is its own value. If you trade anything, trade terms like faster payment or a shorter guarantee, not the rate.

Blog › Fees & Terms

Contingent, Retained or Exclusive: Which Terms to Ask For, and When

October 14, 2026 · 10 min read · For agency recruiters

The fee model you accept decides how hard you can work a req. Contingency spreads your risk thin, a retainer buys you commitment, and exclusivity sits in between. Here's how to pick, and how to ask.

The short version

Contingency pays only on a hire, so it's the default for roles a client could plausibly fill without you; it's the wrong model for hard, senior or confidential searches.
Retained and engaged (container) terms trade an upfront payment for real commitment from the client, and the upfront money is the test of whether the search is real.
Exclusive contingency is the most useful ask for a small agency: no upfront fee, but you're the only firm on the req for a fixed window.
A req open 60+ days with several agencies on it is the best moment to propose exclusivity, because the client has already seen the open-market approach fail.
Put the model, the window, the fee basis, the payment trigger and what happens if the client fills it themselves in writing before you send a resume.

The five ways agencies get paid, in one paragraph each

Contingency. You get paid only if your candidate is hired. The client can use as many agencies as it likes and owes nothing to the ones who don't land the hire. A 2016 SHRM article on working with search firms put contingency fees "in the area of 20 percent to 25 percent" of first-year cash compensation, and the standard retained fee at about 33 percent of salary, bonus and signing bonus. Treat those as a published reference point, not today's rate card; what you can charge depends on your niche, your metro and your terms.

Retained. The client pays a portion of the fee upfront and the rest in stages, usually tied to milestones like presenting a slate and the hire. You are the only firm on the search, and the client is paying for the process, not just the outcome.

Engaged, or container. A partial retainer: a smaller upfront engagement fee, credited against the final fee, with the balance due on hire. It's the bridge between the two, and it's often the easiest step up for a contingency desk.

Exclusive contingency. No upfront money, but the client agrees not to use other agencies on the req for a set window, typically measured in weeks. You still carry the risk of no hire, but you're not racing other agencies.

Contract and temp staffing. A different business: the worker is on your payroll and you bill the client an hourly rate above what you pay. That spread has to cover payroll taxes, workers' compensation, insurance, benefits you offer and your margin.

Side by side

The columns that matter most are client commitment and your risk. Everything else follows from them.

Model	When you get paid	Client commitment	Your risk	Fits best
Contingency	On hire only	None; any number of agencies	High: you can do all the work and earn nothing	Mid-level roles with a decent candidate pool; new clients testing you
Exclusive contingency	On hire only	You're the only agency for a set window	Medium: no race, but still no hire, no fee	Roles open 60+ days; clients burned by the agency free-for-all
Engaged (container)	Part at engagement, balance on hire	Paid skin in the game	Low to medium: upfront covers some of your time	Hard specialist roles; first senior search with a contingency client
Retained	Staged payments through the search	Exclusive, paid, process-based	Lowest on fee, highest on reputation if you fail	Executive and leadership seats, confidential replacements
Contract / temp	Hourly, as the worker bills	Per assignment; often several suppliers	Payroll, collections and worker-misclassification exposure	Projects, coverage, contract-to-hire, headcount-frozen clients

Decision rules: which model to ask for

Three things decide it: how senior the role is, how hard it is to fill, and how the client behaves.

Seniority. The more a hire can damage the business if it goes wrong, the more a client should be paying for a process rather than a resume race. A search for a CFO or a VP of operations belongs in retained or engaged terms. A staff-level accounting role usually doesn't.
Difficulty. If you'd need to find people who aren't looking and talk them into a move, you're doing search work, and contingency underpays it. If the client's own ad would plausibly produce the hire in a month, contingency is honest.
Client behavior. A client who sends every req to six firms, takes weeks to give feedback and won't share comp is telling you they treat agencies as a lottery. Don't buy a ticket at full effort. Either ask for exclusivity or work the req lightly.

A simple rule of thumb: if you would refuse to work the req at all on contingency, ask for a retainer; if you'd work it but not as your top priority, ask for exclusivity; if it's an easy fill, take contingency and move fast.

Proposing exclusivity on a req that's been open 60+ days

The controller at a 400-person logistics company has had a senior accountant req open for nine weeks with four agencies on it. You have the relationship. Here's the conversation.

YouCan I be candid about the senior accountant search? It's been open about nine weeks, and I think the way it's set up is part of why.

ControllerGo ahead.

YouWith four firms on it, every one of us is sending you whoever's actively on the market this week, as fast as possible, so we get credit first. Nobody can afford to spend days calling people who aren't looking, because someone else might fill it in the meantime. And the people who aren't looking are the ones you actually want.

ControllerSo what would you do differently?

YouGive me the search exclusively for 30 days. Same fee, nothing upfront. In return, you get a weekly call, a slate of three qualified people you haven't seen inside three weeks, and I'll tell you honestly what's working and what isn't in the market. If I don't deliver a slate, you open it back up and you've lost nothing.

ControllerI'd have to tell the other firms to stand down.

YouThat's right. Anyone they've already submitted stays theirs under your agreements. I'll only bring you new people.

The pitch works because it diagnoses the problem (a race rewards speed over quality) and offers a short, reversible trial with a concrete deliverable. Notice you didn't offer a discount for exclusivity; if anything, exclusivity is what you trade for holding your fee, which is the argument in defending your fee without discounting. The line about earlier submittals matters, too; see who owns a candidate already submitted. And if you're still deciding whether a 60-day req is worth the fight, start with what a long-open ad usually means.

Pricing an engagement fee

The engagement fee does two jobs: it pays for some of your time, and it proves the client is serious. Size it for the second job first.

Make it a fixed dollar amount, credited against the final fee. Clients accept "$6,000 to start, credited in full on hire" far more easily than a fraction of a fee they haven't calculated yet. If your full fee on the role would be around $30,000, a $6,000 to $7,500 engagement is a real commitment without feeling like a retainer.
Make it non-refundable, and say why. It pays for work done in the first weeks: the market map, the outreach, the slate. If the client cancels, that work still happened.
Tie the balance to the hire, not to milestones, unless you're running a true retained search. Keeping the structure simple keeps the conversation short.
Never offer it unprompted to a client who's been happy on contingency. Offer it on the search they've told you is hard, confidential or senior, such as replacing a controller who doesn't know they're leaving or the company's first in-house counsel.

If a client won't put any money up on a search they call critical, believe the money, not the word.

Red flags in how a client hands out a req

These don't always mean walk away. They mean change the terms or change your effort.

MythThe client sent the req to eight agencies, so it must be a big priority.

RealityIt usually means nobody inside owns the problem, or HR is fishing to see what's out there. Expect duplicate submittals and slow feedback. Ask for exclusivity or work it lightly.

MythThey won't share the salary range because it's flexible.

RealityMore often the range is low and they know it, or nobody has approved one. No range, no full effort.

MythA client who wants to see resumes before signing an agreement is just being careful.

RealityA resume sent without signed terms is a gift. Paper first, every time, including with clients you like.

MythRetained clients are always better clients.

RealityOnly if the retainer comes with access to the hiring manager and fast feedback. A retainer from a client who then disappears for three weeks is still a stalled search, just a paid one.

What to put in writing before the first resume

Short agreements get signed; long ones get sent to legal. Cover these and you're protected on most disputes.

The model in plain words: contingency, exclusive contingency, engaged or retained.
For exclusive terms: the start date, the length of the window and what ends it early.
The fee basis: what counts as compensation (base only, or base plus guaranteed bonus and sign-on).
The payment trigger and due date: on start date, on offer acceptance, net 15 or net 30.
Any engagement fee: the amount, that it's credited against the final fee, and that it's non-refundable.
Candidate ownership: how long a submitted candidate stays yours if hired later, into any role.
Guarantee terms and their conditions, such as invoice paid on time; see replacement guarantees that don't kill your margin.
What happens if the client fills the role internally or through another channel during an exclusive window.

Contract and temp: the markup is not your margin

Contract staffing is a big business on its own. The American Staffing Association says nearly 2.2 million temporary and contract employees worked for America's staffing companies in an average week in 2024. If you're used to perm fees, the math feels different, and the first mistake is reading the markup as profit.

Your markup on the worker's pay rate has to pay the employer's share of payroll taxes, unemployment insurance, workers' compensation, any benefits you provide, and the cost of carrying payroll until the client pays your invoice. What's left after that is your gross margin. Quote bill rates only after you've priced that burden for the state and the job classification, because a warehouse role and an office role can carry very different workers' comp costs. Contract-to-hire terms should also say what the client owes if they convert the worker early, and when the conversion fee drops to zero.

The ops director who said yes to a container

A two-person search firm in Charlotte has placed three supervisors with a regional food manufacturer on contingency. Then the VP of operations calls: the plant manager at the company's largest site is retiring, nobody can know yet, and he needs a replacement by spring.

The firm's owner could take it on contingency. Instead she says: "For this one I'd want an engagement fee. It's confidential, it's the most important hire you'll make this year, and I'll be calling plant managers at competitors who aren't looking. That's weeks of work before you see a name." She quotes a fixed amount, credited in full against the fee, non-refundable, exclusive for 90 days. The VP agrees the same day. The upfront money did what it was supposed to: it told her the search was real, and it told the VP she would treat it that way.

Finding the next VP who's sitting on a search like that starts with knowing who owns the reqs in your market. That's what Ad Call hands you: enter a role and a city and get the likely hiring manager at each company advertising it, graded by confidence. Run your market free with three searches.

Questions agency recruiters ask

What's the difference between contingent and retained recruiting?: With contingency, the client pays only when your candidate is hired and can use other agencies at the same time. With retained, the client pays part of the fee upfront, you're the only firm on the search, and the rest is paid in stages. Retained buys commitment; contingency buys flexibility.
Is exclusive contingency worth it if there's no upfront payment?: Usually, yes. Removing the race is what lets you spend time on people who aren't actively looking, and that's where the best candidates are. Keep the window short and the deliverable concrete so the client feels no risk.
Can a small agency ask for a retainer?: Yes, on the right search. Size matters less than the role and the relationship. A two-person firm with a client who trusts it can win an engaged search for a senior hire; a large firm asking a stranger for a retainer on a staff role won't.
Should I lower my fee in exchange for exclusivity?: Hold the fee. Exclusivity makes the search more likely to succeed for the client, which is its own value. If you trade anything, trade terms like faster payment or a shorter guarantee, not the rate.

Sources