Retained vs Contingency Fees: What’s Best for Your Charity?

Recruiting the right people is crucial for charities of all sizes. Whether you’re hiring a Chief Executive, Head of Fundraising, Finance Manager, or a specialist project lead, selecting the right recruitment approach can significantly impact the quality of candidates you attract and the speed of the hiring process.

One of the first decisions many charities face when engaging a recruitment agency is choosing between a retained and a contingency recruitment model. Understanding the differences can help trustees, hiring managers, and leadership teams make an informed choice that aligns with their budget, timescales, and recruitment objectives.

What Is Contingency Recruitment?

Contingency recruitment is the most common fee structure used by recruitment agencies. Under this model, the agency is paid only if it successfully places a candidate.

For charities, this can appear to be a low-risk option because there is no upfront financial commitment. Agencies typically compete against one another, presenting candidates in the hope of securing the placement fee.

Contingency recruitment often works well for roles that are relatively straightforward to fill and where there is a strong pool of active candidates. It can also be suitable for charities with limited recruitment budgets or urgent hiring requirements.

However, because agencies are working without a guaranteed fee, they may prioritize vacancies with a higher likelihood of success. This can sometimes result in less time being invested in candidate research, market mapping, or engaging passive candidates who are not actively seeking new opportunities.

What Is Retained Recruitment?

Retained recruitment involves paying an agency an agreed fee in stages throughout the recruitment process, regardless of when a placement is made. The recruiter is effectively retained as a recruitment partner for a specific assignment.

This approach is commonly used for senior leadership, executive, specialist, or hard-to-fill positions within the charity sector.

Because the agency receives an upfront commitment, it can dedicate more resources to the search. This often includes detailed market research, targeted headhunting, comprehensive candidate assessments, and regular progress reporting. For charities recruiting key leadership roles, retained search can provide access to a wider talent pool, including experienced professionals who may not respond to traditional job advertisements.

Which Option Is Best for Your Charity?

The right choice depends on the nature of the role and your organisation’s priorities.

A contingency model may be suitable if:

• The role is mid-level or operational.
• There is a readily available candidate market.
• Budget constraints are a major consideration.
• Speed is the primary objective.

A retained model may be preferable if:

• The position is senior, specialist, or business critical.
• The talent pool is limited.
• Confidentiality is important.
• You want a more consultative and strategic recruitment process.

Looking Beyond Cost

While many charities focus understandably on recruitment costs, the true value lies in securing the right candidate. A poor hiring decision can lead to additional recruitment costs, lost productivity, and service delivery disruptions.

When evaluating recruitment partners, charities should consider factors such as sector expertise, track record, candidate networks, and the level of support offered throughout the process, not simply the fee structure.

In summary

Both retained and contingency recruitment models have their place within the charity sector. Contingency recruitment offers flexibility and lower upfront costs, while retained search provides a more dedicated, strategic approach for critical hires. By assessing the complexity of the role and the importance of the appointment, charities can select the recruitment model that delivers the best long-term value for their organisation.