In short
Retained when the cost of the wrong hire exceeds the cost of the search — CFO, CTO and C-suite appointments, confidential replacements, and any role where the candidate pool is small enough that you need all of it. Contingency otherwise.
- Contingency: 10–15% of fixed annual CTC in India, payable only on joining, non-exclusive, zero financial downside.
- Retained: from 18% of fixed annual CTC, milestone-based, exclusive, buys full market coverage including passive candidates.
- The real trade-off: contingency economics make approaching passive candidates uneconomic, so you see the fifth of the market that is actively looking.
- Always ask whether the fee is on fixed CTC or total CTC. In India the difference is worth several lakh.
Most explanations of this are written to push you toward retained, because retained pays the firm better and pays it earlier. Here is the version that includes the parts that are not in our interest to tell you.
What each model actually is
Scroll the table sideways to see all columns.
| Retained | Contingency | |
|---|---|---|
| You pay | In milestones, regardless of outcome | Only when your hire joins |
| Fee (India) | From 18% of fixed annual CTC | 10% mid-senior, 15% executive |
| Exclusivity | Exclusive to one firm | Run as many firms as you like |
| Firm's incentive | Do the work properly; paid either way | Fill it fast, before someone else does |
| Market coverage | Full map, including passive candidates | Whoever can be reached quickly |
| Your risk | You can pay and get nothing | None financially |
The honest case for contingency
Contingency is underrated by search firms for obvious reasons. It is genuinely the right answer more often than the industry admits:
- Your downside is zero. If nobody joins, you pay nothing. For a first engagement with a firm you have not worked with, that is a rational way to test them.
- You are not locked in. Run three firms and your own network in parallel. For a role where you mainly need volume and speed, that is an advantage.
- It is cheaper when it works. 10–15% against 18%+.
- For roles with genuine active supply — Financial Controller, FP&A Head, Head of Treasury — the passive market matters less, and contingency reaches enough of it.
The honest case against contingency
The economics create real distortions, and you should know them:
- Speed beats fit. A firm paid only on placement, competing against other firms, is rewarded for sending you someone quickly — not for telling you your brief is wrong.
- Passive candidates are uneconomic. Approaching a sitting CFO who is not looking takes weeks with maybe a 20% conversion. On contingency that work often does not pay, so it does not get done, and you see the fifth of the market that is actively looking.
- Your mandate competes for attention against retained work that is already paying. Any firm that says otherwise is being polite.
- Confidentiality is harder. Multiple firms in market means more approaches, more conversations, and a higher chance the role becomes known.
The honest case for retained
Retained buys three things worth paying for, and only these three:
- Full market coverage. The firm can afford to spend three weeks on twelve passive candidates because it is not racing anyone.
- The ability to push back. A retained partner can tell you the brief is wrong, the budget is short, or the role should not be filled — because saying so does not cost them the fee.
- Real confidentiality. One firm, one controlled approach, anonymised until interest is mutual.
The honest case against retained
You can pay one or two milestones and get nothing usable. That is the deal, and any firm that implies otherwise is misrepresenting it. Ask specifically what happens to paid milestones if you cancel or shelve the role — that is where retained agreements bite, and the answer varies enormously.
Our terms, since we are making the argument: if you shelve or cancel, paid milestones are held as credit against any mandate within twelve months rather than forfeited. We state that up front because the alternative — discovering it in clause 7 — is how this model earned its reputation.
How to actually choose
Retained when the cost of the wrong hire exceeds the cost of the search. Contingency when it does not.
Go retained for: CFO, CTO and C-suite. Confidential replacements of a sitting executive. Any role where the pool is small enough that you need all of it. Board-visible appointments.
Go contingency for: Financial Controller, FP&A Head, Treasury, Compliance, most Director-level roles. First engagement with an unfamiliar firm. Anywhere speed matters more than coverage.
Questions to ask either way
- Is the fee on fixed CTC or total CTC? In India, total CTC includes employer PF, gratuity and variable pay. On a ₹90L package the difference is worth several lakh. Ours is on fixed CTC; not everyone's is.
- What is the replacement guarantee, exactly? Replacement only, or is a refund available? Does it apply if you terminate, or only if they resign? How long do they have to deliver a replacement?
- How many mandates are live right now? A firm with twenty active searches and four consultants is not giving you senior attention regardless of the model.
- On retained: what happens to milestones if we cancel?
- On contingency: what changes about how you work the mandate? Ask directly. The honest answer is that something does.
What is the difference between retained and contingency search?
Retained is paid in milestones regardless of outcome and is exclusive to one firm, which buys full market coverage including passive candidates. Contingency is paid only when your hire joins and is non-exclusive, which means no financial risk but narrower reach, because approaching passive candidates is uneconomic when the firm may not be paid.
Which is cheaper, retained or contingency?
Contingency, when it works: 10 percent of fixed annual CTC for mid-to-senior roles and 15 percent for executive appointments in India, against 18 percent or more for retained. But retained covers the full market, so the comparison is only fair when both models can realistically fill the role.
When should I use contingency search?
For Financial Controller, FP&A Head, Treasury, Compliance and most Director-level roles where there is genuine active supply. Also for a first engagement with a firm you have not worked with, since your financial downside is zero. Speed and no risk are real advantages.
When is retained search worth it?
For CFO, CTO and C-suite appointments, confidential replacements of a sitting executive, and any role where the candidate pool is small enough that you need all of it. Retained also buys a partner who can tell you the brief is wrong, because saying so does not cost them the fee.
Is the fee on fixed CTC or total CTC?
Ask this specifically, because it varies by firm and matters. In India total CTC includes employer PF, gratuity and variable pay, so a fee on total CTC is meaningfully larger than the same percentage on fixed CTC. On a 90 lakh package the difference is several lakh. Talfino charges on fixed annual CTC.
What happens to retained milestones if we cancel the search?
It varies enormously by firm and is where retained agreements most often bite, so ask before signing. At Talfino, paid milestones are held as credit against any mandate within twelve months rather than forfeited.