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Contingent vs. Retained Executive Search: What Companies Need to Know Before Writing a Six-Figure Check

Every summer, it happens.

Boards meet. Succession plans surface. And quietly—sometimes suddenly—C-suite leaders announce they’ll be stepping down at year-end.

That’s when the scramble begins.

The instinct for many organizations? “Let’s hire a retained executive search firm.”

After all, it feels like the safer bet.

But is it?

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The Reality of Executive Search Today

The executive search industry is big business—over $10 billion annually in the U.S. alone.  And while retained firms dominate the perception of C-suite hiring, the truth is more nuanced:

· Retained search holds roughly 63% of market share

· Contingency firms outnumber retained firms by as much as 10 to 1

· And perhaps most surprising: up to 40% of executive searches fail to result in a hire at all

Let that sink in.

Even in a model where companies pay upfront—sometimes $100K+ before a single candidate is hired—there is still no guarantee of success.

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Retained Search: High Cost, High Commitment… But Not Always High Return

The retained model is built on exclusivity and upfront investment.

Typical structure:

· 1/3 fee upfront

· 1/3 mid-search

· 1/3 upon completion

Fees often total 30–35% of first-year compensation

That means a $400K executive hire could easily cost $120K+.

And here’s the key issue:

That money is spent whether the search succeeds or not.

Yes, retained firms often cite high completion rates—but even industry data shows:

· Executive hiring failure rates can reach 38% within 18 months

So even when the role is filled, success is not guaranteed.

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Contingent Executive Search: Performance-Based, Not Promise-Based

Now let’s talk about the model that doesn’t always get enough credit at the executive level.

Contingent search firms:

· Get paid only when they deliver

· Put their time, resources, and reputation on the line first

· Often move faster and more flexibly

· And—when experienced in C-suite recruiting—tap into the same talent pools, tools, and networks

There’s a misconception that contingent firms only work on mid-level roles.

That’s simply outdated.

In reality:

· C-suite roles now represent over 50% of executive search activity

· Information access, LinkedIn, AI sourcing tools, and networks have leveled the playing field

The difference today isn’t access.

It’s accountability.

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The $100K Mistake Companies Don’t Talk About

In the past 10 years, we’ve seen a pattern more than once:

A company engages a retained firm. They write a $100K+ retainer check.

Months go by…

No hire.

Then they call us.

We run the search. We deliver the candidate. They hire.

And now?

They’ve paid:

· $100K to the retained firm

· PLUS a full contingent fee

All to fill one role.

That’s not strategy.

That’s avoidable cost

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The Truth: Both Models Can Work—But Risk Should Drive the Decision

Let’s be fair—retained search has its place:

· Highly confidential roles

· Board-driven mandates

· Complex global searches

But here’s the question every CEO and board should ask:

“Why pay upfront for something you can pay for upon success?”

Especially when:

· A large portion of searches don’t result in a hire

· And executive hires themselves carry significant failure risk

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A Smarter Approach for Today’s Market

The most forward-thinking companies are shifting toward:

Performance-Based Executive Search

· Start with a proven contingent partner

· Leverage speed, market reach, and flexibility

· Pay for results—not activity

Some even adopt a hybrid approach, blending retained and contingent strategies depending on the role

But one thing is becoming clear: The old assumption that “retained = better” is no longer a given.

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Final Thought: This Summer, Make the Smarter Call

As executive transitions ramp up in the coming months, companies will face a critical decision:

Do you:

· Write a large check upfront and hope for results?

Or

· Partner with a firm willing to earn the fee by delivering the outcome?

At our firm, we’ve successfully completed C-suite searches under a contingent model—because we believe in aligning our incentives with yours.

We don’t get paid unless you win.

And in executive hiring, that alignment matters.

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Let’s Talk Before You Write That Check

If you’re anticipating a leadership transition this year, let’s have a conversation.

Before you commit six figures upfront…’

See what a performance-based approach can deliver first.