If your company makes one or two hires a year in specialized roles, contingency recruiting is probably the right fit. You pay a fee when a placement is made, you have no ongoing commitment, and the arrangement scales with your actual hiring activity.
But if you are hiring more regularly, or if you have a stretch of growth ahead that is going to require consistent recruiting support, the math on contingency starts to shift. At a certain point, paying per placement becomes more expensive than a structured monthly arrangement with a recruiter who knows your business and is actively working your roles.
Figuring out where that line is for your company is worth doing before your next search opens.
How Contingency Costs Add Up Over Time
Contingency fees typically run between 20 and 25 percent of first-year salary. For a single hire on a $100,000 role, that is $20,000 to $25,000. For a company that hires once or twice a year in that range, that fee represents reasonable value for a focused search with no upfront risk.
Now apply that to a company making three, four, or five hires a year in technical, senior, or specialized roles. The fees start to stack up quickly. Three placements at an average fee of $22,000 each is $66,000 in a single year. Five placements pushes past $100,000.
At that volume, a monthly retainer arrangement that covers ongoing recruiting activity starts to look very different from a cost perspective. The per-hire fee tends to be lower, the recruiter has a much deeper understanding of your business after working with you consistently, and you are not starting from scratch every time a new role opens.
What Changes When a Recruiter Knows Your Business
One of the less obvious advantages of a retainer arrangement is what happens to search quality over time. A recruiter working your roles on a one-off contingency basis has to learn your business, your culture, your hiring process, and your specific requirements every time you bring them a new search. That learning takes time, and it costs something in the early stages of every engagement.
A recruiter who has been working with you on a monthly basis for six months already knows what your hiring managers care about, what your team looks like, and what has worked and not worked in previous searches. They can move faster on a new role because the context is already there. They can also push back more usefully when a job description is unrealistic or a salary range is going to make the search harder than it needs to be.
That accumulated knowledge has real value, and it is something a per-placement arrangement almost never produces.
The Crossover Point
The crossover point where a retainer arrangement tends to become more cost-effective than straight contingency varies depending on salary levels and fee rates, but a reasonable starting point for most mid-market companies is around three hires per year in roles above $80,000.
Below that volume, contingency is probably still the more flexible and cost-efficient option. Above it, the combination of lower per-hire fees, faster searches, and the value of an ongoing relationship with a recruiter who understands your business starts to tip the math clearly in favor of a structured arrangement.
The other factor worth considering is timing. Contingency searches are typically reactive. A role opens, you call a recruiter, and the search begins. A retainer arrangement allows for more proactive planning. If you know you are going to need a senior engineer in Q3 and a finance manager in Q4, a recruiter working with you on an ongoing basis can start building a pipeline before those roles are officially open. That lead time tends to produce better candidates and shorter time-to-fill.
What an Outsourced Recruiting Arrangement Actually Looks Like
For companies that do not have a dedicated internal recruiting function, an outsourced arrangement with an external recruiter can effectively serve as their recruiting department for as long as the engagement runs. The recruiter handles sourcing, screening, and shortlisting. The client handles interviews, decisions, and offers.
This structure works particularly well for mid-market companies in the 51 to 500 employee range that are growing but have not yet built out internal HR capacity to handle multiple concurrent searches. Rather than paying a full-time internal recruiter, they pay a monthly fee for access to an experienced external recruiter who is actively working their roles.
Steven Cardwell Search & Placement offers a structured Outsourced Talent Partner arrangement for companies in that situation. Monthly fees vary based on the volume and complexity of active searches, and the placement fee rate under this model is lower than standard contingency to reflect the ongoing commitment on both sides. You can read more about how the firm structures these engagements on the How We Work page.
The firm works with mid-market companies across Canada and the United States, primarily in engineering, skilled trades, finance, and accounting. The Industries We Serve page covers the full range of sectors the firm operates in.
When Contingency Is Still the Right Answer
It is worth being clear that contingency recruiting is not a lesser option. For companies with infrequent or unpredictable hiring needs, it is often the better fit. There is no ongoing commitment, no monthly invoice regardless of search activity, and the full focus of the fee is tied directly to a result.
The decision between contingency and a retainer arrangement is really a question of hiring volume, predictability, and how much value you place on having a recruiter who knows your business deeply over time. Neither model is right for everyone, and the honest answer depends on where your company is and where it is headed.
How to Know Which One Makes Sense for You
If your hiring needs are occasional and hard to predict, start with contingency and see how it goes. If you are growing and expect to be hiring consistently over the next 12 to 18 months, it is worth having a conversation about what a retainer arrangement would look like.
The starting point is understanding what your actual hiring volume looks like, what it has cost you in recruiting fees over the past year or two, and whether a more structured ongoing relationship with a recruiter would produce better results for less money.
If you want to talk through the numbers for your specific situation, get in touch and we can work through it together. You can also browse current open roles to get a sense of the types of searches the firm is actively working.
The right structure is the one that fits how your company actually hires. Sometimes that is contingency. Sometimes it is something more ongoing. The answer is usually pretty clear once you look at the numbers.