Why Contingent Recruitment Falls Short When the Stakes Are High

Over two decades in HR recruitment, I've watched organisations make the same costly mistake: choosing contingent recruitment for roles that genuinely matter, including senior People & Culture leaders, ER managers, IR specialists, then finding themselves back at square one within months.

The appeal is obvious. Contingent recruitment promises rapid shortlists, payment only on success, and multiple agencies competing. But when a role shapes culture, manages compliance risk, or determines how your organisation navigates industrial complexity, deciding on contingent recruitment often doesn’t save money. In fact, it negates the value of upfront investment for long-term success.

The Hidden Costs that are worth calculating

The numbers are sobering. The average cost to hire in Australia is $23,860 per candidate (AHRI/ELMO, 2022) but that's just the beginning. Research quoted in the Australian Business Review revealed a bad hire can cost a business up to 2.5 times the employee's salary. More recent 2025 estimates put poor hiring decisions at anywhere from $15,000 to $35,000 per role, with some specialists suggesting costs can reach 30% to 150% of the employee's annual salary when all factors are included.

But the real cost isn't just financial. I've sat across from executives whose failed HR Director appointment set their culture transformation back eighteen months. I've watched organisations struggle to rebuild stakeholder trust after a poorly chosen ER leader damaged critical relationships.

When you calculate lost productivity, leadership time diverted to performance management and re-recruitment, team disruption, and heightened compliance exposure, that "cheaper" contingent placement becomes extraordinarily expensive.

Why Retained Search Delivers Better Outcomes

At the executive level, boards rarely leave senior appointments to chance or competing agency incentives. They invest in retained search because failure is unacceptable. This same logic applies to any role of genuine influence, not just the C-suite.

Your Head of People & Culture, your Senior ER Manager, your IR Director all shape culture, manage risk, and protect reputation. Yet they're often still recruited transactionally.

Retained search works differently because it's structured for quality, not just speed. Market mapping becomes comprehensive; we identify and approach high-performing leaders who aren't actively looking. Confidentiality is protected when you're replacing someone or managing sensitive matters. Assessment is calibrated to real risk, evaluating operational judgment and cultural alignment alongside qualifications. You receive market intelligence on candidate motivations and competitive pressures, helping you position roles effectively.

The misconception that retained search is ‘more expensive’ misses the point. The investment is visible upfront, but the value is delivered over the entire tenure of the hire, measured in problems that never happen.

What Success Actually Looks Like

I recently worked with a professional services client who needed a new Head of People & Culture. They'd used contingent recruitment and cycled through three appointments in two years. Each person looked perfect on paper. Each time, something critical was missed – how their story, aligned in some way to the current needs of the business, strong cultural alignment.

When we engaged on a retained basis, the brief was detailed, with multiple stakeholders involved, not just the hiring manager. We spoke with the leadership team, understood the three-year strategy, and the challenges and opportunities within it. The candidate we placed is still there, has successfully led a major transformation program, and recently told the CEO it was the best career move they'd made.

Organisations using retained search for influential HR roles consistently report higher offer acceptance rates, fewer interview dropouts, stronger cultural alignment, and better retention. These outcomes reflect commitment and process depth that contingent approaches simply can't match. It is a process that is rewarding for us, for the client and for the successful candidate.

The Candidate Experience Factor

Senior candidates are constantly assessing you. They notice who's representing your organisation, how informed the process feels, and whether the role is positioned honestly.

When multiple contingent agencies simultaneously represent your role, the varied information they present may confuse or frustrate high-calibre candidates. They wonder why you're not investing in the process if the role matters.

As your retained partner, we control that experience. There's one brief, one point of accountability, and shared commitment to successful outcomes. Candidates feel valued, you're positioned as an employer of choice, and the process concludes with confidence rather than compromise.

A Different Approach for Roles That Matter

If you're considering contingent recruitment for a senior HR role, pause and ask yourself: What happens if this hire fails? Not just financially, but the operational disruption, team impact. What are you prioritizing – avoiding upfront costs, or securing the right outcome?

At The Next Step, we specialise in HR Recruitment, Your Head of People & Culture and Leadership Team, are shaping your employee value proposition. Your ER Director isn't just managing cases; they're safeguarding your reputation.

These appointments deserve a process built for success, not convenience. Retained search is essentially insurance against risk you cannot afford. It supports leadership stability, accelerates productivity, strengthens retention, and removes the distraction that failed appointments create for executive teams.

The question becomes: can you afford to get this wrong again?

If you'd like to discuss how retained search could support your next critical appointment, or if you're tired of repeating the same recruitment cycle, I'd welcome the conversation. Let's talk about what's really at stake, and what genuine success would mean for your organisation.

Ready to make your next HR appointment count?

Contact us to discuss how retained search can deliver the quality, confidence, and long-term success your critical roles deserve.

Get in touch here or reach out directly – we’d love to talk about how we can help with your hiring challenges.

Contingent vs Retained Search: The Reality Check