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Retained vs. Contingent Recruiting: Which Is Right for Your Business?

Recruiting and hiring the right talent is critical for the success of your organization. But, sorting through a large pool of applicants can take time and effort. 

To streamline the process, many companies turn to a recruitment agency for help. These agencies can offer you retained or contingent RPO services depending on your hiring needs.

Let's explore the differences between contingent recruiting and retained recruitment. Find out how you can make an informed decision on which approach is best suited for your business.

Retained Vs. Contingent Recruiting: What's the Difference?

Retained and contingent recruitment are two different approaches to hiring talent. Choosing either approach depends on your needs and the type of position you're trying to fill. Here's a breakdown of each recruitment method:

Understanding Contingent Recruiting

Contingent RPO is an approach where organizations engage recruitment agencies on a "pay on success" basis. In this model, you'll only pay your recruitment partner if they help you find the right candidate.

Contingent RPO is commonly employed for junior to mid and senior positions. You can also use it for contract workers and permanent hires for related positions.

Contingency recruitment can be favorable if you're looking to fill open positions quickly and efficiently. This recruitment method offers several advantages, including:

No Upfront Financial Commitment

One of the primary advantages of contingent recruiting is that you do not need to make an upfront financial commitment. You only pay the recruitment agency after successful hiring, making it a cost-effective option for your business.

A pay-on-success model for recruits reduces the risk of bad hiring and fraud from a recruiter. Recruiters have to do their due diligence to provide you with the right candidates. This means your company is less likely to lose money to fraudsters who may pose as recruiters. 

Access to a Wider Pool of Candidates

In-house recruitment is often slower since employers must conduct the hiring process from scratch. The lack of an accessible database of potential candidates can make it difficult to fill vacant positions. Research shows it takes 42 days for most companies to fill a position. 

Contingent recruiters often have a vast network of candidates and use various sourcing methods to attract potential hires. This allows your firm to tap into its broader talent pool and increases the chances of finding suitable candidates quickly.

Faster Turnaround Time

Accessing a recruiter's database is another reason to outsource hiring to contingent recruiters. Since they're actively sourcing for new candidates, they must build a database to reduce fill times for potential candidates. 

Contingent RPO recruiters also work on a competitive basis, which means they are motivated to fill positions as quickly as possible to secure their fees. This can result in a faster turnaround time for hiring, which is beneficial when you must fill roles promptly.

Suitable for High-Volume Hiring

No-shows, late cancellations, skill mismatch, and offer declines are only a few challenges if you want to fill many positions simultaneously. The process can be arduous for your in-house recruiting team seeking to scale up staffing.  

Contingent RPO is particularly well-suited for high-volume recruiting. You can access many candidates by engaging contingent recruitment agencies, increasing the chances of finding the right fit for their roles.

Disadvantages of Contingent Recruiting

Outsourcing hiring to a contingency recruiting agency is a great idea, but the option has pitfalls. Some of the reasons you may opt for other recruitment methods instead of contingency include:

Lack of exclusivity

In a contingent recruiting model, recruiters often work with multiple clients simultaneously. This lack of exclusivity means the same candidates may be presented to many organizations. It can cause you to compete and conflict with other companies vying for the same talent.

Potential for Lower Candidate Quality

Lack of exclusivity may also affect the quality of your candidates. As contingent recruiters are focused on filling positions quickly, there may be a trade-off regarding quality. 

Research shows the average US employer spends over $4000 to hire a new worker. The resources invested are significant, so a quick hiring process is often not a good idea.

The reactive sourcing methods used by contingent recruiters may result in more mismatched candidates presented to your company. This can escalate hiring costs and hurt operations due to hiring inefficiency. 

Limited Commitment From Recruiters

Contingent recruiters may rush your recruitment process to receive quick payments or reduce costs. They often prioritize roles more likely to be filled quickly to maximize their chances of receiving payment. This could result in less effort being dedicated to your niche positions, leading to a mismatch in hiring.

Not Suitable for Specialized or Permanent Hires

The contingent recruitment method is a popular option for filling temporary or contract positions. But it's generally not suitable for specialized or permanent hires.

Usually, most contingent recruiting agencies focus on numbers rather than quality. As much as they have a large database of candidates, it's not optimized for specialist positions.

Specialists or permanent hires usually need to be able to commit to your company for a long time. Hiring for any strategic position requires proper interviewing and review of personality and skills. 

Understanding Retained Recruitment

Retained recruitment involves engaging a recruitment agency exclusively to conduct a thorough and customized search for highly qualified candidates. 

In this model, the organization pays a retainer fee upfront, regardless of the outcome, to secure the recruitment agency's services. Retained recruitment is commonly used for critical positions that require specialized skills or senior-level leadership roles.

Hiring specialized or senior-level staff is often challenging because of the increasing talent shortage. As the level of expertise required for a position increases, filling it becomes difficult. Outsourcing to a retained recruitment agency is a proven way to fill these positions. Here are the benefits of using this recruitment method:

Exclusive Focus on Client's Needs

Filling senior roles and permanent positions is like solving a puzzle. Their experience, skills, and cultural fit must all align perfectly to complete the picture. A bad hire for a senior role can be a costly mistake for growing and established companies.

Retained recruitment is often preferred to contingent hiring methods for senior and permanent hires. This recruitment method involves total dedication of attention and resources to your company to help it find the right candidates. 

Before the recruitment process begins, the agency takes time to understand your organization's needs, culture, and requirements. This exclusive focus often results in a more tailored and thorough search process, allowing you to find the best candidates. 

Access to Passive Candidates

High-in-demand talent is highly likely to be very passive in the job market. A recent study showed that passive candidates make up 39% of the talent pool

Passive candidates are those candidates who are not actively looking for a new role. Recruiting them is one way to overcome the talent shortage challenge and fill up specialist or senior roles. The big challenge for most companies is finding these types of candidates. 

Enter retained recruitment. Retained recruiters have the time and resources to proactively identify and approach passive talent. This enables you to tap into a pool of highly qualified individuals who may fit your team perfectly.

Comprehensive Market Analysis

Evolving skill needs require keeping an eye on the latest trends in the workforce. As companies seek new candidates, they must make sure these candidates have the skills to thrive in the modern market. 

Conducting marketing research is essential before recruiting new talent. You need to understand the latest skills needed to cope with industry demands. 

Retained recruitment involves in-depth market analysis and mapping highly critical in the modern market. This comprehensive approach ensures you can easily access the most qualified and suitable candidates.

Long-term Partnership

Hiring is usually an ongoing process for any growing and expanding company. Despite conducting rigorous interviews, new hires often fail before their first anniversary.

A high turnover rate is becoming less of a hiring problem but a rising concern amid changing employee needs. For example, 68% of Americans currently prefer working from home or remotely. 

Hence, effective outsourced recruitment nowadays calls for long-term partnerships between your organization and hiring agencies. This makes retained recruitment a great option if you're seeking long-term hiring solutions. 

A collaborative relationship allows for a deeper understanding of your goals, culture, and hiring needs. This can result in more successful candidate placements, permanent hires, and long-term retention.

Disadvantages of Retained Recruitment

Finding the top talent can become easier after outsourcing hiring to a retained agency, but at what cost? Here are some common disadvantages of using this recruitment method.

Upfront Financial commitment

Retained recruitment requires you to make an upfront financial commitment through a retainer fee. This fee may be higher than contingent recruiting, which can be a barrier if your company is on a budget or under uncertain hiring needs.

Longer Hiring Process

Due to the comprehensive nature of retained recruitment, the hiring process may take longer than contingent recruiting. The extensive market analysis and in-depth evaluation of candidates require more time and resources, which may not be suitable for organizations with immediate hiring needs.

Limited Access to Multiple Agencies

Engaging in a retained recruitment model means working exclusively with one recruitment agency. While this allows for a focused and dedicated search process, it may limit access to multiple agencies' diverse networks and resources.

Considering a Hybrid Approach

In some cases, a hybrid approach combining contingent and retained recruitment elements may best fit your needs. This hybrid model allows for flexibility and customization, leveraging the advantages of both approaches.

For example, you can engage a recruitment agency on a retained basis for critical or niche positions that require an extensive search process. Simultaneously, you can utilize contingent recruiting for roles that require a larger candidate pool and a faster turnaround time.

Another way to combine the two is to use contingency recruiters to find a large pool of candidates for a specific role. Then, use a retained recruiter to help you narrow down the pool and find the best candidate. 

The hybrid approach to recruitment offers several advantages if you're seeking to optimize your hiring processes. Here are some key benefits:


A hybrid approach allows your company to tailor recruitment strategies to the unique requirements of each position. This customization ensures that the methods employed align closely with the skills, experience, and characteristics needed for success in a particular role.


You can adapt your recruitment methods based on budget constraints, urgency, and position criticality. The flexibility of a hybrid approach enables you to balance cost-effectiveness and thoroughness, adjusting strategies as needed.

Optimized Resource Allocation

By combining contingent and retained recruitment elements, you can optimize the allocation of resources. You can use contingent RPO for roles with standard requirements and larger talent pools. Meanwhile, you can reserve retained recruitment for specialized positions or senior leadership roles, maximizing efficiency and effectiveness.

Time Management

The hybrid approach allows you to manage time effectively by leveraging the speed of contingent recruiting for urgent positions while ensuring a more deliberate and thorough search for critical or specialized roles. This balance helps meet hiring deadlines without compromising on quality.

Risk Mitigation

A hybrid recruitment approach prevents the risks of relying on one recruitment method. For example, you can integrate in-depth analysis during high-volume recruiting. This can help you reduce the risk of making rushed or mismatched hires.

Enhanced Candidate Quality

The ability to tailor recruitment strategies means you can focus on the right candidates. This emphasis on quality can lead to better long-term employee satisfaction and retention.

Improved Cultural Fit

Retained recruiters' focus on understanding company values contributes to improved cultural fit. This is particularly valuable if you want a focus on your culture and values in the hiring process.

Contingent RPO: Making the Right Choice for Your Business

Retained and contingent recruiting are two methods that can help you find top talent for your organization. Take the time to find the approach that is the best fit for your business. 

Consider your budget, urgency, position requirements, and company culture when deciding. You can also consider a hybrid approach to get the best of both worlds.

Looking for a reliable partner for your entire hiring needs? Check out our outsourced hiring services for contract and specialized positions. Save time and resources building a winning team for your company.


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