Contingency vs retained recruitment: compare the assignment economics

Contingency and retained recruitment allocate commitment, payment timing and delivery risk differently. Compare the actual assignment terms and your desk's economics rather than assuming one model always produces better fill rates or profit.

Define the terms before comparing

In a contingency arrangement, payment is commonly linked to a successful hire under the agreed terms. Retained or engaged arrangements can include earlier payments for defined stages of work. Exclusivity, refund provisions, milestones and payment triggers vary; confirm the specific agreement rather than relying on the label.

Calculate realized fees per delivery hour

Choose a completed cohort of searches. Add the actual delivery hours across filled and unfilled assignments, then divide collected fees by those hours. Keep the period and cost treatment consistent. Multiplying hours by a fill rate does not calculate the realized fee per hour.

Illustrative example: five assignments take forty hours each, for two hundred hours in total. If two produce collected fees of $20,000 each, realized fees are $200 per delivery hour before salaries, tools, refunds, taxes and other costs. This is arithmetic with hypothetical inputs, not a recruitment benchmark.

Compare commitment and delivery obligations

An earlier payment can support cash flow, but it comes with agreed work and expectations. Exclusivity may reduce competition for the same assignment without guaranteeing a hire. Discuss access to the hiring manager, feedback timing, role feasibility, candidate process and what happens if the brief changes.

Test a change on a suitable assignment

If an engaged or retained structure fits the buyer and your service, explain the deliverables, milestones and commercial terms clearly. Model the cash and capacity implications. You do not need to move every existing client to the same arrangement or promise an unsupported fill rate to justify a proposal.

Review the results of completed cohorts before expanding the model. Use the fee-scenario comparison for an assignment’s fee less explicitly included costs, then discuss scope and payment terms separately. A positive amount does not establish collectability, delivery capacity or net profit. Keep employer concentration separate: multiple assignments from one buyer do not diversify your client base.

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