The mechanical difference
In a retained search, the client pays in instalments across the mandate - typically on engagement, on shortlist and on placement - regardless of whether a hire is made. The firm is paid to run a process. The mandate is usually exclusive.
In a success-based or contingency search, nothing is payable until a candidate starts. The firm carries the risk. The mandate may or may not be exclusive.
That is the entire mechanical difference. Everything else that gets attributed to the two models - research depth, quality, seniority of consultant - follows from the incentives rather than from the label.
What retained actually buys
Three real things, and it is worth being clear about them because success-based firms tend to skip over them.
- Funded research. Mapping a market properly takes expensive hours. When a firm is paid for those hours, it can afford to spend them on a brief that may never convert.
- Persistence through difficulty. If a search turns out to be harder than expected, a retained firm is still being paid to keep going. A success-based firm facing the same situation has a quiet incentive to move resource to an easier mandate.
- Discretion. Exclusivity means one firm in the market asking questions about your business. For a confidential succession, that matters.
Where retained breaks down
The retainer is paid whether or not the firm performs. If the brief was wrong, or the consultant is weak, or the market simply does not contain the person described, the client has paid for a process that produced nothing. The model also encourages long engagements, because the fee is earned by running the process rather than by closing it.
What success-based actually buys
- Risk transfer. If nobody is hired, you have spent nothing but your own time.
- Speed. The firm is paid at the finish line, so there is no incentive to extend the process.
- Honesty at the briefing. This one is underrated. A firm that only gets paid on placement has a strong reason to tell you at the briefing that your salary band is unrealistic or your role is unfillable as written, because taking an impossible mandate means working for free.
Where success-based breaks down
It is weakest exactly where retained is strongest. If three firms are working the same role non-exclusively, each one has an incentive to move fast rather than deep, and the market gets approached clumsily by several parties at once - which is noticeable, and damaging, at senior level. On a genuinely difficult brief, a success-based firm can quietly deprioritise you without ever saying so.
The practical defence is exclusivity without a retainer. A success-based mandate given to one firm, with an agreed review point, keeps the risk transfer while removing the race. That is how most of our mandates run.
Choosing for a specific role
| Situation | Usually better | Reason |
|---|---|---|
| Board or CEO appointment at a listed or regulated group | Retained | Governance expectations and discretion outweigh fee risk |
| Confidential succession, incumbent in post | Retained or exclusive success-based | One firm in the market, controlled messaging |
| Country manager or functional director, clear brief | Success-based, exclusive | The pool is reachable; risk transfer is worth more than funded research |
| Role you suspect may be unfillable as written | Success-based | The firm's incentive is to tell you before you spend anything |
| Very narrow technical niche, small global pool | Retained with a specialist | The research is the work and it has to be paid for |
| Several roles at once under time pressure | Either, but exclusive | Throughput depends on dedicated resource, which non-exclusivity undermines |
Our position, and its limits
We work success-based with no retainer. It suits our clients, who generally want to see a shortlist before committing money, and it suits us, because it forces us to be straight at the briefing about whether a role is fillable.
The honest limit is this: if you are running a board appointment where the process itself needs to be demonstrably funded and exclusive, a retained firm is the better instrument and we would say so. The model is a tool, not a virtue.