About half the companies we talk to have never used a retained search firm. They've used recruiters. Sometimes several. But the model was always contingent.
Many of them don't know there's another model until someone explains it.
That's the reality of the market. Contingent recruiting is far more common, especially for mid-level roles.
The problem is that when it's time to hire a VP, a COO, a CFO, or a division president, the contingent model often breaks down. The recruiters aren't bad at their jobs. The model itself wasn't designed for this kind of hire.
So here's the honest comparison. How each works, what each costs, where each is strongest.
How contingent recruiting works
In a contingent model, the firm gets paid when they fill the role. No placement, no fee. The fee is typically 20% to 30% of the placed candidate's first-year comp.
Because the firm only earns on a fill, the incentive is straightforward: move fast, send candidates, hope one sticks. Most contingent recruiters juggle 20 or 30 requisitions at any given time.
Contingent works well when the talent pool is broad, the profile is well-defined, and the urgency is moderate. A mid-level project manager at a commercial GC. A controller for a restoration company. A regional sales director.
The limitations show up when the role gets more complex. At the VP level and above, the candidate pool shrinks dramatically. The people you want aren't on job boards. They aren't responding to InMails from recruiters they don't know.
Reaching them requires credibility, industry knowledge, and a compelling reason to have a conversation they weren't planning to have.
A contingent firm splitting time across dozens of openings often can't invest the attention a senior leadership search requires. The result is a candidate slate that skews toward people who are actively looking rather than the people who are actually best for the role.
How retained executive search works
In a retained model, the client pays the search firm to run a dedicated process for one specific role. The fee is typically 25% to 33% of first-year comp, paid in stages: a portion at engagement, a portion at midpoint, a portion at placement.
Because the firm is paid to run the process, the incentive structure changes. The search team is dedicated to your role. They're focused on understanding your business, your culture, your leadership team, and the specific profile this hire requires.
A retained search begins with a meeting to get everyone on the same page. At FireSeeds, we call this the Bullseye Meeting. Every stakeholder who has a voice in the hiring decision is in the room.
The role, the comp, the success criteria, the leadership style, the cultural fit, and the decision-making authority all get clarified before anyone goes to market.
This step exists because misalignment at the start is the single most common reason executive searches fail. It's far cheaper to resolve in a 2-hour meeting than 6 months into a bad hire.
From there, the firm goes to market with a clear, specific profile. They're reaching out directly to leaders who match it, people who aren't actively looking but are the right fit. Every candidate is evaluated for capability, cultural fit, leadership style, and readiness for the specific challenges of the role.
Throughout the search, you have a standing weekly call with the team. Market feedback comes in. The profile sharpens. Course corrections happen in real time.
The candidate who comes through in week 10 is a meaningfully better fit than the one who would have surfaced in week 3, because the search had 8 weeks of calibration.
Retained search also comes with a guarantee. If the placed executive doesn't work out within an agreed period, the firm re-runs the search.
That changes the dynamic. The firm's long-term reputation depends on placements that stick.
The cost question
Retained search costs more upfront. It should. You're paying for a dedicated team, a structured process, deep candidate evaluation, and a guaranteed outcome.
But "costs more" isn't the same as "costs more in the end."
The cost of a failed executive hire, when you add up severance, lost productivity, downstream turnover, and the cost of running the search again, typically lands between $300K and $500K for a VP-level role in construction or home services. A retained search fee for the same role is a fraction of that number.
The relevant comparison isn't "retained fee vs. contingent fee." It's "retained fee vs. the total cost of getting it wrong."
When to use which
Contingent recruiting isn't bad. Different models serve different needs.
Contingent works well when the role is well-defined, the talent pool is broad, speed is the priority, and the evaluation criteria are straightforward. Mid-level management, technical specialists, roles where industry experience matters more than leadership fit.
Retained works well when the role is senior, the talent pool is narrow, cultural fit is critical, the hire will shape the organization's trajectory, and a bad hire carries high cost. C-suite, VP-level, and other executive roles where the wrong person can damage the culture, derail projects, or cost the company hundreds of thousands of dollars.
If you're not sure which model fits your next hire, that's a reasonable place to be. The answer depends on the role, the market, and the stakes. We're happy to talk through it honestly, even if the answer is that you don't need a retained search for this particular hire.