Contingency, retained search or RPO: which recruitment model fits your company
A lot of our first conversations with a company open with the same question: “What do you charge?”. It is a fair thing to ask, and we are happy to answer it. But if you answer it before working out which model suits the role, you end up comparing percentages for things that are not alike.
Contingency, retained search and RPO work in very different ways. Each one splits the risk and the workload between you and your partner differently, and that usually has more bearing on the outcome than the fee.
Contingency, or paying only if you hire
Here the agency is paid only if you hire a candidate it introduced. The fee is usually a percentage of the new hire’s annual gross salary.
It makes sense for roles with a reasonably large pool of candidates, for one-off needs where you would rather not commit budget up front, or when you already have other channels running, such as an internal team or referrals, and want some extra reach.
The thing to be aware of is that, because the agency only gets paid if it closes, it will naturally put its effort into the searches most likely to succeed. And if several agencies are working the same role, each one has a reason to submit fast, which is not always the same as submitting well. For candidates, hearing about the same job from three different people does not show the company at its best either.
Contingency works well when there is exclusivity or only a couple of agencies involved, a clearly defined profile and a quick internal process.
When commitment runs both ways
With retained search you engage the agency for a specific search and pay the fee in stages. Typically that means one part at the start, another at a milestone such as the shortlist, and the rest when the person starts. In return, the agency puts a team and a method on that search exclusively.
This is the model we usually recommend for leadership, C-level and genuinely scarce profiles. Also for confidential searches, for example when you need to replace someone who is still in the role, and for searches where market mapping and in-depth assessment matter as much as the hire itself.
Because there is commitment from the outset, the agency can afford to do far more thorough work: map the whole market, approach people who are not looking, assess them properly and support you through the negotiation. Your company commits too, to giving time and feedback and to not opening the same role with other providers in parallel.
The trade-off is that you pay part of the fee even if the search does not end in a hire. So it is worth pinning down the scope, what gets delivered at each stage and what happens if things change, for instance if the role is cancelled or redefined halfway through.
RPO, when volume is what matters
Recruitment Process Outsourcing is something else again. Rather than commissioning a search, you hand some or all of your hiring process to a partner for a period of time. That can cover sourcing, screening, interview coordination, employer branding or running your ATS.
It fits growth plans with lots of hires in a few months, which is common after a funding round, companies with no internal talent team or one that needs temporary support, and the opening of new offices or markets.
It is usually billed as a monthly fee, sometimes with an extra per-hire element. It needs genuine integration with your team: shared tools, direct access to hiring managers and documented processes. And if the expected volume does not show up, you will be paying for capacity you do not use, so take a realistic look at your hiring plan before you sign.
Questions to ask yourself first
If you are not sure, these five questions tend to bring a lot of clarity:
- How many people will you hire in the next six months? One or two one-off searches point to contingency or retained. Steady volume points to RPO.
- How much does this role matter to the business? The more strategic it is, the more sense a model with guaranteed dedication makes.
- How many candidates are really out there? If the profile is scarce, or the ideal person is not looking, you need an active, methodical search.
- Does it need to stay quiet? A sensitive search calls for a level of control that is very hard to keep with several agencies at once.
- How much time can your team give? No model works without internal involvement, although RPO takes on more of the operational load.
Mixing models is normal
In practice, plenty of companies combine them. It is common to run a leadership role on a retained basis and team-level roles on exclusive contingency, or to start with one-off searches and move to RPO once the pace of hiring justifies it. What matters is that the agreement reflects the real effort each search is going to take.
What should be in writing
Whichever model you choose, check that the agreement is clear on:
- The scope of the search and the agreed profile.
- The expected timeline and when you will review progress.
- The fee structure and when each payment falls due.
- A replacement guarantee if the new hire leaves in the first few months.
- Exclusivity, and what happens with candidates your company already knew.
A good partner will point you to the model that makes sense for your situation, even when it is not the one that suits them best. At Mimmic Talent we always start by understanding the need before suggesting how to work together, and if you would like to look at it for your next hire, you can reach us here.