From Contingency Recruiting to Retained Search: How My Billing Changed Everything

By Vanessa Moore, Recruitment Agency Owner — Minneapolis, MN

I started Pinnacle Search in 2017 with one desk, a recruiting database, and a contingency-only model. Contingency recruiting is the standard entry point for independent recruiters: you work the search, fill the position, get paid. If you don’t fill it — for any reason — you get nothing. It’s high-risk, high-volume, and structurally disadvantageous to the recruiter.

In contingency recruiting, I was essentially giving clients a free option: they could work with me, several other agencies, and their internal talent team simultaneously. The first one to place a candidate wins. The others absorb their time and cost.

By 2021, I had placed 84 candidates, built a solid client roster, and survived a genuinely terrible year during pandemic hiring freezes. I had also, by my calculation, worked approximately 2,300 hours on searches that never resulted in a placement — searches killed by hiring freezes, internal promotions, scope changes, or clients who ultimately hired someone they found through LinkedIn.

2,300 hours. Zero revenue.

I rebuilt the practice around retained search. The billing model changed everything.

The Retained Search Model

Retained search means the client pays a portion of the fee upfront, before the search begins. The standard retained structure is thirds:

First third (engagement fee): paid when the search is engaged — before any candidates are sourced
Second third (search fee): paid at presentation of finalists (typically 3-5 candidates)
Final third (placement fee): paid upon candidate start date

The engagement fee compensates for the actual work of running a search, regardless of outcome. This is the structural difference from contingency: I am compensated for the expertise and work, not only the luck of a placement in a competitive environment.

I kept a contingency option for clients who won’t commit to retained — but I charge a premium for it, and I manage it as a secondary priority.

The Retained Search Invoice Structure

Invoice Flow app invoice editor of a recruiter — a 22% permanent placement fee with candidate start date, salary and a 90-day guarantee period in custom fields — The placement fee with start date, salary and the 90-day guarantee — documented the moment it happens.

Retained Search Engagement — [Company Name] — [Date]:

Position: [Job Title] — [Department/Division]
Search scope: [Brief description — e.g., VP of Operations, 10+ years experience, industry-specific requirements]
Placement fee basis: 30% of first-year base salary (estimated: 30% × $180,000 = $54,000)
Engagement fee (⅓, due at search commencement): $18,000.00
Search fee (⅓, due at finalist presentation): $18,000.00 (invoiced separately)
Placement fee (⅓, due at start date): $18,000.00 (invoiced separately)
Guarantee: 90-day replacement guarantee if candidate departs for non-performance
Payment Terms: Net-15

The full fee structure — all three thirds — appears on the first invoice. The client sees the total commitment before the engagement begins. No surprises at finalist presentation or placement.

The Second and Third Invoices

Retained Search — Finalist Presentation — [Company Name] — [Date]:

Position: [Job Title] | Search Reference: SR-2026-[Number]
Milestone: Finalist presentation — 4 qualified candidates presented
Search fee (⅓ per retained agreement): $18,000.00
First invoice (engagement fee): $18,000.00 — paid [Date]
Total invoiced to date: $36,000.00 of $54,000.00
Payment Terms: Net-15

Retained Search — Placement — [Company Name] — [Date]:

Position: [Job Title] | Search Reference: SR-2026-[Number]
Candidate: [Name, optional if client prefers not on invoice]
Start date: [Date]
Placement fee (⅓ per retained agreement): $18,000.00
Total invoiced to date: $54,000.00 of $54,000.00 — search complete
Guarantee: 90-day replacement guarantee in effect
Payment Terms: Net-15

Each invoice references the search and tracks the running total. No arithmetic required for the client.

Contingency Placement Invoices

Invoice Flow app documents of a recruitment agency — a permanent placement fee, a retained-search tranche, a weekly temp-staffing invoice and paid work — Permanent fees, retained tranches, weekly temp billing — every model on one screen.

For contingency placements, the full fee invoices on the start date:

Contingency Placement — [Company Name] — [Date]:

Position: [Job Title]
Candidate: [Name, optional]
Start date: [Date]
First-year base salary: $95,000.00
Placement fee (25% contingency rate): $23,750.00
Guarantee: 60-day prorated replacement guarantee
Guarantee calculation: If candidate departs within 60 days, fee credit = (days remaining ÷ 60) × $23,750
Payment Terms: Net-15

The guarantee calculation on the invoice prevents disputes about how a refund is calculated if the guarantee is triggered.

Temp and Contract Staffing Invoices

For temp and contract placements, I invoice weekly with markup calculation documented:

Contract Staffing — [Company Name] — Week of [Date]:

Contractor: [Name] | Assignment: [Job Title] | Client site: [Location]
Hours worked: [N] hours × $65.00/hour (contractor rate) = $[Amount]
Agency markup (35%): $[Amount]
Total bill rate: [N] hours × $87.75/hour = $[Total]
Bill rate calculation: Contractor rate $65.00 + markup $22.75 = $87.75/hour
Payment Terms: Net-7

Weekly invoices with the markup calculation visible — clients always know exactly what the markup is. Transparency builds trust; undisclosed markups build suspicion.

Corporate Retained Client Invoices with PO Fields

Invoice Flow app recurring invoices of a recruiter — a weekly temp-staffing invoice for warehouse associates by the hour — The temp desk bills itself weekly — hours in, invoice out, no manual recreation.

Large enterprise clients have procurement requirements:

Executive Search — [Company Name] — [Date]:

Position: [C-Suite Title] | Search Reference: SR-2026-CORP-[Number]
Engagement fee (⅓ of total retained fee): $32,000.00
PO Number: PO-2026-TALENT-0028
Cost Center: HR-EXEC-2026
Billing Contact: [Name], Talent Acquisition
Payment Terms: Net-30

The Business Five Years After Going Retained

Current practice:

Retained searches (active and ongoing): approximately $42,000/month in milestone payments
Contingency placements: approximately $8,400/month (secondary priority, premium-priced)
Contract staffing (3 active contractors): approximately $6,200/month
Total monthly revenue: approximately $56,600/month
Year 1 revenue: $112,000. Current year: on pace for approximately $680,000.

The 2,300 uncompensated hours from my contingency years represent a permanent cost I absorbed in exchange for a client roster and market position. The retained model means that every search I run now either results in payment or a replacement guarantee — never zero.

What InvoiceFlow Does for Recruitment Agencies

Recruiting billing involves retained search three-part milestone invoices, contingency placement invoices with guarantee calculation, weekly contract staffing invoices with markup documentation, and enterprise PO fields. InvoiceFlow handles all of these from one Android app.

Download InvoiceFlow. Build the three-invoice retained search template. Add the guarantee calculation to contingency placement invoices. Document the markup on contract staffing invoices. The billing structure of a retained search firm is disciplined billing — and InvoiceFlow makes it practical.

Vanessa Moore is the owner of Pinnacle Search in Minneapolis, Minnesota, providing executive retained search, professional contingency recruiting, and contract staffing for technology, operations, and finance roles.