Contingency vs Retained vs Subscription Recruiting: Which Fee Model Fits Your Hiring

Contingency fits when you have one or two roles, want to pay only if someone is hired, and can accept 20 to 25 percent of first-year base salary as the price of that flexibility. Retained fits one senior, confidential or genuinely hard search where you want a firm's full attention and will pay 25 to 35 percent in stages whether or not it closes. Subscription fits when you have several roles open at once or hire continuously, because a flat monthly fee per open role stops repeating every time you make a hire.

That is the short version. The longer version is arithmetic, and the arithmetic turns on one number: how many people you expect to hire in the next twelve months.

I owned a recruitment firm for ten years before I built the AI side of Next Chapter Talent, so I have seen these models from the firm's side of the table. Now I build and sell one of them. Here is how I would choose if I were the one paying.

Contingency: you pay per hire, and only on a hire

The firm sources, screens and sends candidates. If you hire one, you pay a fee, typically 20 to 25 percent of the first-year base salary. If you do not hire, you pay nothing.

Worked example: a $150,000 role at 20 to 25 percent costs you roughly $30,000 to $37,500, for that one hire. Fill the same role again in eighteen months and the fee is due again.

When it fits:

• You have one or two roles and no plan to hire more this year.
• You want to keep options open, run your own posting alongside the agency, and pay only for a result.
• The role is mainstream enough that a firm will actually work it.

That last point is the quiet cost of contingency. A recruiter paid only on a close will, rationally, spend their hours on the roles most likely to close. If your role is niche, your process is slow, or your comp is below market, it slides down their list. That is not a flaw in the recruiter. It is the incentive the model creates, and the work behind the fee is real when it lands.

What it costs beyond the fee: every week the role sits open while the firm works something easier, you are paying the cost of an unfilled role on top.

Retained: one firm, full attention, paid in stages

You engage a single firm exclusively and pay in stages across the search, typically 25 to 35 percent of first-year total cash compensation, whether or not the search closes. In return the firm commits real hours to your role from day one, because it is already being paid for them.

When it fits:

• The role is executive level, confidential, or expensive to get wrong.
• Total compensation is high enough that the percentage is worth a dedicated search team.
• You want one accountable partner rather than three agencies working the same shortlist.

What it costs: the fee scales with compensation, and you carry the risk of a search that stalls. On a $300,000 total comp package, 25 to 35 percent is $75,000 to $105,000, committed before you have met a candidate. For a CFO that can be the right call. For a senior engineer it usually is not.

Subscription: a flat monthly fee per open role

This is the model I build. You pay a fixed monthly fee per open role. The service sources passive candidates from 100+ data sources, runs personalized outreach, delivers ranked shortlists, books interviews onto your calendar, and shows you the pipeline in a live dashboard with a weekly written update. You interview and close. Whether you hire one person from the pipeline or four, the monthly fee does not change.

AI Talent Partner is priced at $1,000 per open role per month for up to three roles, with the per-role rate stepping down as more roles run at once. There is a $3,000 one-time setup, it is month to month, and you can cancel any time.

Here is the arithmetic in the open, so you can check it:

• First year, three concurrent roles: $3,000 setup plus twelve months at $3,000, so $39,000.
• One contingency placement on a $150,000 role: roughly $30,000 to $37,500.
• So year one costs about what a single agency placement costs, and it covers three open roles continuously. Year two is $36,000 with no setup.

The difference is not the first hire. On the first hire the two models are close. The difference is the second, third and tenth hire, which cost nothing extra under the subscription and a full fee each under contingency. Two hires at $150,000 through contingency is $60,000 to $75,000. Two hires under the subscription in the same year is still $39,000.

When it fits:

• You have three or more roles open now, or a steady flow of backfills and growth hires through the year.
• You have someone on your side who will interview promptly and give feedback, because the pipeline moves at your pace.
• You want the top of the funnel handled continuously rather than restarted from zero every time a role opens.

When it does not fit: you hire once a year and the role is not hard. Twelve months of a subscription to make one hire is more than a contingency fee, and I would rather tell you that here than have you find out on the invoice.

The five-minute decision rule

Answer three questions.

How many hires in the next twelve months? One, and it is not senior: contingency. Three or more: the subscription math starts winning at the second hire and keeps widening from there.

Is one of the roles senior, confidential, or very expensive to get wrong? Retain a firm for that one role. Do not stretch the retained fee across the rest of the plan.

Do you have anyone in-house to run the process? Every model still needs a person on your side to interview, decide and close, and that is the part worth keeping human. If you have that person but not the sourcing capacity, the subscription buys the capacity. If you have neither, and you are weighing an internal recruiter against outside help, start with the real cost of hiring through a recruiter versus in-house before you pick a fee model.

Then do the multiplication with your own salaries. Expected hires times a typical fee, against twelve times a monthly rate. The answer is usually obvious once the numbers are on the page.

Most companies end up mixing them

This is not a religion. A company hiring a VP of Finance, five engineers and two account managers this year might retain a firm for the VP, run the seven other roles on a subscription, and keep a contingency relationship for the odd one-off that neither covers. Each model is priced for a different shape of hiring. The mistake is not picking the wrong one. It is using one model for every role because it is the one you already have a contract for.

If you run a recruitment firm, read the subscription section differently: the percentages above are your revenue, and a flat monthly cost for sourcing under your own brand is capacity, not a fee you are avoiding.

If you are working through this for your own hiring plan and want a second set of eyes on the arithmetic, the per-role pricing is laid out at nextchaptertalent.ai. Bring your open roles and the salaries, and I am happy to run the comparison with you, including the cases where the honest answer is that contingency is the better fit.

FAQ

What is a typical contingency recruiting fee?

Typically 20 to 25 percent of the hire's first-year base salary, paid only when a placement is made. On a $150,000 role that is roughly $30,000 to $37,500 for one hire. Rates vary by market, role and firm.

Is retained search worth the cost?

For an executive, confidential or business-critical role, usually yes, because you are paying for a firm's committed hours and a single accountable partner. For mid-level roles the same percentage buys far more through contingency or a subscription.

How does subscription recruiting work?

You pay a flat monthly fee per open role and receive a continuous pipeline: sourcing, outreach, ranked shortlists and scheduled interviews. The fee does not change with the number of hires you make from it, which is why it fits companies with several roles open at once or continuous hiring.