Retained vs Contingent Search: How Semiconductor Startups Should Hire

Why the fee model matters more in semiconductors

In software hiring, a recruiter can usually find several decent candidates for most roles. In semiconductors and photonics, the pool for a given role can be tiny. There may be only a few dozen people in Europe with hands-on experience of co-packaged optics, high-speed SerDes, or building a PDK for a new photonic platform.

When the pool is that small, the hard part is not finding CVs. It is finding the right people, who are almost always employed, getting them to talk, and running a process that keeps them interested. How you pay a recruiter decides how much time they can afford to spend on that work.

Contingent: pay only on success

A contingent recruiter is paid only when you hire their candidate. The fee is normally a percentage of first-year base salary. There is no upfront cost, and you can brief several agencies at once.

The trade-off is commitment. With no guarantee of payment, agencies prioritise the roles they are most likely to fill quickly. Searches for rare skills often get pushed down the list, or handled by sending whoever is already on the database.

Briefing several agencies also has a hidden cost in a small market. The same engineer may get calls about your role from three recruiters in a week. To a senior candidate, that looks like a company struggling to hire, and it can damage your reputation before you have spoken to anyone.

Retained: a committed, mapped search

A retained search is paid in stages, usually at the start, at shortlist and on hire. In return you get a dedicated search: the full market mapped, a targeted approach to people who are not looking, and regular reporting on who has been contacted and why.

For a deeptech role, mapping means listing every relevant team: competing startups, the big chip and photonics companies, foundries, research institutes and university groups. Then working out who in each team has the exact experience you need, such as tape-outs on a given process node or packaging work on a specific laser integration approach.

This is the standard model for executive, leadership and highly specialised roles, where the right person is almost always employed and not looking. It is also the best option when the search must stay confidential, for example when replacing someone in post.

Exclusive: the middle ground

An exclusive contingent agreement gives one specialist sole rights to a role for a set period, without a large upfront fee. It removes the race between agencies and gives the recruiter enough confidence to invest real time.

Because only one recruiter is speaking to the market, your message stays consistent and candidates hear about the role once, from someone who can explain it properly.

For many early-stage startups, exclusive is the practical balance between cash flow and search quality.

Side-by-side comparison

Upfront cost: contingent has none; exclusive has none or a small engagement fee; retained has a first payment at the start.

Recruiter commitment: contingent is low and shared with other agencies; exclusive is high for the agreed period; retained is full and dedicated.

Reach: contingent mostly reaches active job seekers; exclusive and retained reach people who are not looking.

Confidentiality: hard to control with contingent; good with exclusive; strongest with retained.

Best for: contingent suits broad, less urgent roles; exclusive suits specialist engineering and commercial hires; retained suits executives, first technical leads and confidential searches.

Three typical startup scenarios

A seed-stage photonics startup needs a test engineer. The skills exist in many labs and the timeline is flexible. Contingent can work, ideally with one or two recruiters who know the field.

A Series A chip startup needs a senior verification lead before its first tape-out. The pool is small, every month of delay pushes the schedule, and the wrong hire is very expensive. An exclusive search with a specialist is usually the right call.

A startup with fresh funding needs a VP Engineering or Chief Commercial Officer, and the board wants discretion. Retained search is the norm here: the person is almost certainly employed, and the approach needs to be careful and confidential.

The real cost of the wrong choice

The cheapest-looking option is not always the cheapest. A slow search for a critical engineer can delay a tape-out, a customer qualification or a funding milestone. A rushed hire who leaves within a year means paying again and losing months of work.

Compare the fee against what an empty seat costs you each month, not against zero.

Questions to ask any recruiter

Who will actually run the search day to day, and speak to candidates?

How will you assess technical fit before I spend interview time?

How will you report progress, and how often?

How do you keep the search confidential?

What happens if the hire leaves in the first few months?

Good specialists will answer all of these clearly. Vague answers are a warning sign, whatever the fee model.

Which model fits which role

Use contingent for roles with a broad candidate pool and a forgiving timeline. Use exclusive for specialist engineering and commercial roles where a focused search matters. Use retained for executives, first technical leads, and any hire that must stay confidential.

If you are unsure which model suits your next semiconductor or photonics hire, book a short call with NeoSilicon and we will talk it through.