Contingent, Contained, or Retained? 5 Questions to Ask Before Hiring a Recruiting Firm

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The right recruiting model isn't determined by the job title. It's determined by what it takes to make the right hire.

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You just raised $40 million.

Congratulations.

Now comes the fun part. You've got to actually put that money to work.

The board wants growth. Your revenue targets just doubled. And somewhere in that beautiful spreadsheet you presented to investors is a hiring plan that includes six account executives, two SDR managers, and a VP of Sales.

All of whom you apparently needed yesterday.

So you start talking to recruiting firms.

One says they'll work on contingency. No upfront fee.

Another recommends a contained search with an upfront commitment.

And a third wants a traditional retained engagement.

Same positions. Three different proposals.

And you're sitting there thinking, "Why in the world would I pay someone upfront when another firm is willing to do it for free?"

Well, not exactly free. But you get my point.

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It's a fair question.

In my last blog, “What Does a Sales Recruiter Actually Cost?”, I broke down what recruiting firms charge and how the different search models work.

Today, I want to help you figure out which one you actually need.

Because after 20-plus years in recruiting and people strategy, I've learned something.

The job title shouldn’t determine the recruiting model. The complexity of the search does.

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And before you sign an agreement with a recruiting firm, there are five questions I'd encourage you to think through.

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1. Do you actually have an outbound recruiting function?

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This is usually one of the first questions I ask when talking with a founder, CEO, or CRO who's getting ready to scale.

Walk me through your current people and talent acquisition function.

Do you have an HR director? A head of people? Maybe an HR coordinator?

Or do you have experienced recruiters who know how to proactively identify, engage, assess, and recruit top talent?

Because those are two very different things.

And I see this all the time with growing companies.

They've invested in HR. They've got someone handling benefits, compliance, employee relations, onboarding, and everything else that comes with managing people.

All important stuff.

But having an HR function doesn't necessarily mean you have a recruiting function.

Posting a position on LinkedIn and reviewing applicants is one thing. Proactively identifying and recruiting a high-performing account executive who's already making great money somewhere else is something entirely different.

And that's where companies can get themselves into trouble.

If you've got experienced internal recruiters and a solid hiring process, contingent recruiting might be exactly what you need. You're leveraging an external firm's network and sourcing capabilities while your team manages much of the process.

But if your head of people is already wearing 12 different hats and recruiting is about to become number 13, you may need more than someone sending you candidates.

You may need to outsource the recruiting process itself.

That's where contained or retained search can make a lot of sense.

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2. How complicated is this hire, really?

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Here's something I think gets overlooked.

Not all searches are created equal.

Let's say you're hiring your 5th account executive in New York City.

You've hired 4 others successfully. You know what good looks like. You've got a proven success profile, competitive compensation, and an interview process that's worked.

Pretty straightforward.

A contingent search could be a great fit.

Now imagine you're a founder hiring your very first account executive.

You've never hired for the position before. You're still figuring out your sales motion, what experience translates to your business, and what type of person will actually succeed.

Same job title. Completely different search.

And that second situation requires a lot more than finding candidates.

You may need help building the success profile, developing the job description, understanding the talent market, and figuring out how to assess whether someone can actually do the job.

At Pursuit, those are the types of searches where we'll often recommend a contained engagement.

And complexity isn't just about the position.

Maybe it's a difficult location. Maybe the talent pool is limited. Maybe you're looking for a very specific combination of industry experience and technical capabilities.

Or maybe you've got 5 executives who all have different opinions about what the ideal candidate should look like.

Ever been in one of those meetings?

The CEO wants a builder. The CFO wants someone who's managed a $100M revenue organization. The board wants someone who's done it all before.

And somehow, they're all convinced they're describing the same person.

Good luck recruiting that unicorn.

That's why a more collaborative search process can be valuable. You need to get everyone aligned on what success actually looks like before you spend months interviewing people.

The complexity of the search matters a whole lot more than the title on the business card.

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3.How many people do you need, and how fast?

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Let's go back to our founder who just raised $40 million.

Maybe you've got 12 GTM positions to fill over the next 6 months.

8 AEs, 2 SDR managers, a RevOps leader, and a VP of Sales.

That's a lot of hiring.

And here's where recruiting capacity becomes important.

Recruiting is, in part, a numbers game.

Not in the sense that you want someone throwing resumes at you. Nobody wants that.

But if you're trying to identify the best talent in the market, you've got to engage enough of the right people.

That takes sourcing, outreach, conversations, assessments, and follow-up. And all of that takes time.

So the question becomes: Do you have enough recruiting capacity to execute the hiring plan?

If you're filling 8 similar AE positions with an established success profile and hiring process, contingent recruiting may work really well.

But if you've got several complex positions that require ongoing collaboration, dedicated recruiting resources, and a more structured approach, contained search might make more sense.

And sometimes the right answer is a combination of both.

Here's another thing worth considering.

Speed isn't just about how quickly a recruiter sends you candidates. It's about how quickly your entire hiring process moves.

I've seen recruiters identify great candidates in a matter of days, only to watch those candidates sit around waiting 2 weeks for interview feedback.

Meanwhile, another company makes them an offer.

And now we're starting over.

Not exactly the growth strategy you had in mind.

When we run contained searches at Pursuit, we allocate dedicated weekly recruiting capacity and establish regular meetings with the hiring team.

We call them syncs.

We're sharing what we're seeing in the market, discussing candidate feedback, and making adjustments as we go.

Maybe compensation isn't competitive. Maybe the experience requirements are too narrow. Maybe candidates aren't interested in being in the office 5 days a week.

Rather than spending months figuring that out, we're having those conversations along the way.

That's part of what you're paying for.

Not just candidates, but a process that helps the organization make better decisions, faster, and doesn’t end with a declined offer.

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4. What's the cost of getting this hire wrong?

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This is one I wish more hiring leaders would spend time thinking about.

Let's say you're hiring a VP of Sales with an annual compensation package of $450,000.

You make the hire, and 12 months later you realize it's not working.

Well, that's an expensive lesson.

But the compensation is just the beginning.

What about the sales strategy that wasn't executed? The account executives who weren't hired or ramped? The revenue opportunities you missed? The customers you didn't acquire?

And now you've got to start the search all over again.

For a growth-stage company trying to hit aggressive revenue targets, the impact can be significant.

Now, I want to be clear.

A contained or retained search doesn't guarantee you're going to make the right hire.

I wish it were that simple.

But a more structured and collaborative process can help mitigate the risk.

And that starts with 2 questions we ask at Pursuit.

1. Why are you hiring this position?

And...

2. What impact should this person have on the organization?

Those answers help us develop what we call a job profile, which defines the competencies, experiences, characteristics, and capabilities someone needs to succeed.

That's different from a job description, which outlines what the person will actually be responsible for doing.

One defines what success requires. The other defines what the person will do.

From there, we can help establish candidate scorecards, build an effective interview process, and make sure the hiring team is aligned on how candidates will be evaluated.

Because here's something I've learned.

You can find an outstanding candidate and still make a bad hire if your evaluation process isn't effective.

And when the consequences of getting that decision wrong are significant, investing in a more rigorous search process can be well worth it.

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5. Are you paying for candidates or a recruiting process?

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This is probably the simplest way I know to explain the difference between the models.

If you've got a strong internal recruiting function, a well-defined position, and an effective interview process, you may primarily need additional access to qualified candidates.

Contingent recruiting can be a great solution.

But if you need help defining the role, developing the success profile, mapping the talent market, assessing candidates, and managing a more collaborative hiring process, you're asking for something different.

You're asking a recruiting firm to help execute the search process itself.

And that requires a different level of commitment.

At Pursuit, both our contingent and contained engagements assign a recruiter to the search.

But with contained, we're committing dedicated weekly recruiting capacity, regular collaboration with your hiring team, ongoing market intelligence, and a structured process for refining the search.

And here's something important.

The upfront contained fee isn't an additional charge. It's credited toward the total recruiting fee.

For example, let's say you've agreed to a 25% fee on a position with $200,000 in first-year guaranteed compensation.

That's a $50,000 recruiting fee.

If the contained engagement requires a $10,000 upfront fee, that amount is credited toward the total.

When we successfully place the candidate, the remaining balance is $40,000.

You're not paying $60,000. You're paying $50,000.

The difference is that a portion of the fee is committed upfront to support a dedicated recruiting process.

And that commitment works both ways.

We're committing resources, time, and attention to your search.

You're committing to a collaborative process with timely feedback and engagement.

That's a pretty important distinction.

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Contingent vs. Contained vs. Retained: Which Model Fits?

These are general characteristics, not universal rules. Services, fees, guarantees, and payment terms vary by firm and agreement.

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So, which model would I recommend?

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For the organizations we typically work with at Pursuit, including privately held businesses, founder-led companies, venture-backed organizations, and growth-stage businesses, I believe contingent and contained recruiting can address the vast majority of GTM hiring needs.

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That doesn't mean retained search doesn't have its place.

It absolutely does.

There are board-level searches, confidential executive engagements, and highly specialized leadership positions where a traditional retained model may make perfect sense.

But I don't believe every important or senior-level GTM search requires a fully retained engagement.

Sometimes a contained search provides the dedicated capacity, collaboration, and structure you need while keeping the majority of the recruiting fee tied to a successful placement.

And sometimes a straightforward contingent engagement is exactly the right solution.

The key is matching the engagement model to the needs of the search, not simply the title of the position.

And once you've determined which model makes the most sense, there's another important decision to make.

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Which recruiting firm should you actually hire?

Because just like recruiting models, not all recruiting firms are created equal.

That's what I'll tackle in Part 3.

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