Contingency and Retained Are Not the Same Bet
Contingency recruitment and retained search are both real, named, distinct fee models, not interchangeable labels for the same work, per Murray Resources’ staffing-industry glossary. Contingency work is typically paid only when a placement closes; direct-hire contingency fees run 20% to 30% of first-year salary per Frontline Source Group, or 15% to 25% per altLINE, going as high as 30% for specialized roles. Retained and executive search, by contrast, is paid upfront in installments regardless of whether a specific candidate is ultimately placed, with fees typically running 25% to 35% of first-year compensation.
That is a genuine difference in who carries the risk. A contingency firm works entirely on spec, absorbing the cost of every search that does not close. A retained firm gets paid for the search itself, win or lose on any single candidate.
Why a Firm Might Refuse Contingency Business Entirely
A firm running purely on contingency is, by definition, working every open search on spec, competing against however many other agencies a client hands the same job order to at once, with no guarantee any of that work gets paid. A firm that refuses contingency business outright is opting out of that specific risk, choosing to be paid for the search itself rather than betting the entire engagement on a successful placement.
That trade cuts both ways. A retained-only firm gives up the higher deal volume a contingency model allows, since clients are far more willing to hand out a no-risk contingency search to five agencies at once than to pay five different retainers for the same role.
Where Splits Networks Fit Into the Decision
Splits networks exist specifically because trading job orders and candidates for a split fee is a recognized structural alternative to running contingency BD in-house, confirmed as a real, active practice directly in a staffing recruiter community: “You could join a splits network or a network with job orders to fill.” A recruiter in one of these networks can work a contingency-style split placement without carrying the full cold-outreach burden of finding that job order themselves, which changes the risk calculation for a firm deciding whether contingency work is worth pursuing directly at all.
A firm weighing whether to refuse contingency business outright is really weighing three options, not two: run contingency in-house, run it through a splits network, or avoid it and focus entirely on retained work.
Analytical Read, Not a Cited Statistic: Why the Refusal Is Rarely Absolute
No external source quantifies how many staffing firms adopt a hard, firm-wide policy against contingency business, so the following is reasoning, not a cited adoption figure. In practice, a genuinely absolute refusal is rare; most firms describing themselves as “retained only” are making a positioning statement about their default posture, not a contractual impossibility, and will still take a contingency search for the right relationship or the right fee.
The economic logic above, who carries the risk, what fee structure compensates for that risk, and whether a splits network changes the calculation, explains why a firm leans one direction more than it explains a truly absolute policy either way.
What This Means for How a Firm Should Decide
The decision is less about picking a permanent identity, contingency shop or retained shop, and more about matching the fee model to the specific risk a given search carries. A well-known, easy-to-fill role at a client with a track record of paying fast is a reasonable contingency bet. A confidential, hard-to-fill executive search for a first-time client is a much harder one to work on spec.
Sources
The external data in this article draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.
- Frontline Source Group, Staffing Agency Fees: Pricing, Costs, What to Expect
- altLINE, How Much Do Staffing Agencies Charge?
- Murray Resources, Recruiting and Staffing Industry Glossary of Terms