Recruiter placement fees: contingency, retained, and container

Contingency pays only if the client hires your candidate. It is usually non-exclusive, so several firms may work the same role. Retained search pays in installments whether or not the client hires, and is exclusive. Container or engaged search sits between them: exclusive or close to it, with part of the fee paid up front and the rest on placement.

NPAworldwide separates three contingent variants: non-exclusive, exclusive, and engaged. In its description, an engaged search is a precursor to retained search and the up-front payment is non-refundable.

There is no single market rate. The table shows what each source states for each model. All are percentages of the candidate’s first-year pay, though the base differs, as the next section explains.

The overlap is the useful part. Contingency ranges run from the mid-teens to 30 percent, and 20 percent falls inside every one of them. Every retained range includes 30 to 35 percent. Container or engaged work sits between the two, and sources do not agree on what to call it.

The fee base differs. Contingency fees are usually quoted on base salary. Retained fees are usually quoted on total first-year compensation. KORE1 gives a worked case: a $250,000 base with a $75,000 bonus target and $100,000 of equity vesting in year one is a $425,000 fee base. At 33 percent that is $140,250, paid in thirds, with the first $46,750 due at signing. The same percentage on base alone would be much smaller.

Role level matters. Recruiters LineUp puts entry-level contingency at 10 to 15 percent and executive roles at 25 to 30 percent. Market and scarcity matter too. Firms that describe their own fees also describe their own niche.

The ASA and NAPS model recruiting agreement, reproduced by NPAworldwide, takes the wide view. It sets the fee as a percentage of the candidate’s estimated total first-year compensation, including estimated commissions, bonuses, and any signing bonus. If your agreement says “salary,” decide whether you mean base or total pay, and write it down.

KORE1 compares the three models on one $180,000-base role. These are its illustrative numbers, not a market survey.

The lesson KORE1 draws is a good one for any firm: percentages do not compare across models, because the bases differ. Compare total cash out across the whole payment schedule.

Firms use “container,” “engaged,” and “retained” loosely. KORE1 puts the up-front part of an engaged search at a fixed $3,000 to $15,000, or about a third of the projected total. NPAworldwide describes it as often between 25 and 33 percent of the anticipated fee, with some firms using a smaller flat fee instead.

The ASA and NAPS model agreement handles this in a clause: a non-refundable retainer, credited against any further fee due, and no search starts until it is paid. Whatever you call it, name the amount, say whether it is credited, and say whether it is refundable.

The percentage is the headline. These terms move the real price, for the client and for you.

The ASA and NAPS model agreement also covers expense reimbursement and late-payment interest. Have an attorney review any agreement before you use it. Fees and contract language are not legal advice.

A placement fee is not always allowed. For temporary healthcare staffing, some states bar charging a fee when a facility hires your temporary worker. A November 2023 Barclay Damon alert says New York’s Article 29-K stops temporary health care staffing agencies from requiring liquidated damages, employment fees, or other compensation if the worker is hired permanently by the facility where they were placed. McKnight’s Senior Living reports that Nebraska’s LB 921 prohibits conversion fees too, with registration starting July 2027.

If you place healthcare staff, check each state before you write a conversion clause.

Many buyers now read negotiation guides. Pin, a recruiting software vendor, tells hiring teams that recruiter fees are negotiable by 3 to 7 percentage points and that guarantee, exclusivity window, and payment terms are all movable. That is a vendor’s claim, but it describes the conversation you will have.

The practical answer is to trade terms before you cut the rate. Exclusivity, faster payment, a clear fee base, and a longer search window are worth more to you than a point of percentage, and they cost the client less than a discount does.

A fee only exists if you win the job order. That is the harder problem for most firms. dreach covers that side: it flags past clients hiring again and employers about to hire, and names the hiring manager with a current email and phone, so the fee conversation starts with a manager who has a role open.