Recruiting proposals come in three broad shapes: a retained search where you pay part of the fee upfront, a contingency search where you pay only on hire, and a referral model where a network of people who know candidates is paid on hire. The percentages differ from provider to provider; the structures differ in what they buy and where the risk sits. This guide explains the structures so you can compare any proposal on the same basis.
Correction: An earlier version of this article stated fee percentages for retained and contingency firms as market facts, along with time-to-fill medians, conversion rates, and survey results. Those figures were not supported by a verified dataset and have been removed. Percentages below are labeled examples, not claims about what any provider charges.
The three structures
| Retained search | Contingency agency | Referral network | |
|---|---|---|---|
| When you pay | Part upfront, rest at milestones or hire | On hire | On hire |
| What you get | A dedicated researcher, market mapping, a managed process | A recruiter sourcing from their channels, often non-exclusive | Introductions from people who know the candidate, vetted before you see them |
| Risk if no hire | Retainer is spent | Nothing paid | Nothing paid |
| Exclusivity | Usually required for a period | Sometimes | Usually none |
| Typical fit | Executive and highly specialized roles | Mid-level to senior roles with a broad candidate pool | Senior engineering and GTM where warm introductions matter |
Retained search: paying for dedication
A retained firm assigns a researcher and a partner to your search and runs a structured process: map the market, approach candidates, reference deeply, present a shortlist. The retainer pays for that dedication whether or not a hire results.
Use it when the role is consequential and narrow enough that systematic mapping of a small candidate universe is worth paying for in advance, typically C-level and some VP roles.
Read the terms for: what happens to the retainer if the search fails, whether the firm is paid on a candidate you sourced yourself, and the off-limits list (companies the firm will not recruit from because they are clients).
Contingency: paying only on hire
A contingency agency is paid a percentage of first-year compensation when a candidate they submitted is hired. Non-exclusive engagements mean several agencies may work the same role, sourcing from overlapping channels.
Use it when you want a broad funnel with no upfront spend and have the capacity to screen more submissions.
Read the terms for: the fee basis (base, or base plus bonus and commission), the payment trigger (offer signed or start date), the replacement period, and how the agency handles a candidate who is already in your pipeline. See recruiting payment and guarantee questions.
Referral network: paying for who is vouching
A referral network pays the people who introduce candidates a share of a success fee. The company pays only on hire. The difference from contingency is the source: referrals come from operators and specialist recruiters who know the person, rather than from database searches, and at Refery every referral is vetted by a Talent Committee before it reaches you.
Use it when the role is one where the best candidates are not looking, and a warm introduction with context is more valuable than a wide funnel.
Refery's terms: 15% to 25% of first-year base salary, paid only on hire, with the exact scope and fee agreed before the search starts. No retainer, no exclusivity, no fee on candidates already in your pipeline. If a hire does not work out early, Refery runs the replacement search at no extra fee on the terms in the client agreement.
Comparing on the same basis: a labeled example
Use an illustrative base salary of $200,000. The percentages are example inputs, not claims about any provider.
| Structure (illustrative) | Upfront | Success fee | Total if hired | Total if not hired |
|---|---|---|---|---|
| Retained at 30% with one third upfront | $20,000 | $40,000 | $60,000 | $20,000 |
| Contingency at 25% | $0 | $50,000 | $50,000 | $0 |
| Referral at 15% | $0 | $30,000 | $30,000 | $0 |
Two things the table shows that a headline percentage hides. First, the retained structure has a cost when the search fails. Second, the total depends on the fee basis: if a provider charges on total compensation rather than base, a 20% fee on a package with a large bonus can exceed a 25% fee on base alone. Confirm the basis before comparing percentages.
Questions to ask every provider
- What is the fee basis, and does it include bonus, commission, or equity?
- What triggers payment: offer, start date, or something else?
- Is any part of the fee paid whether or not there is a hire?
- What is the replacement provision, over what period, and is there a fee?
- Is exclusivity required, and for how long?
- What happens if a candidate was already in my pipeline?
- What does the fee cover: sourcing only, or screening, scheduling, and offer support?
The recruiting partner checklist covers the non-price factors: role fit, screening evidence, ownership, and references.
Matching the structure to the role
| Role | Structure that usually fits | Why |
|---|---|---|
| CEO, CRO, CTO | Retained | Small candidate universe; dedicated mapping is worth the retainer |
| VP Engineering, VP Sales | Referral or retained | Referral if the network reaches the profile; retained if the niche is narrow |
| Senior and staff engineers | Referral | Candidates are passive; introductions from peers convert |
| Senior GTM (AE, RevOps) | Referral | Operators know who built pipeline themselves |
| Mid-level roles with broad pools | Contingency or in-house | Funnel width matters more than referral context |
| Highly specialized or regulated roles | Contingency or retained | The network may not reach the pool |
The bottom line
The question is not which structure is cheapest. It is which one puts the risk where you want it and buys the kind of sourcing your role needs. Put every proposal on the same basis, include the cost of searches that do not close, and compare scope alongside price.
Share your role with Refery to agree the scope and fee for your search.
To see these structures priced by actual providers rather than in the abstract, read what a startup recruiter costs.