To begin with, there are many differences between the two types of services beyond the superficial difference of how the recruiter is paid. In some ways, a true retained search practice resembles a temp agency more than a perm-placement business, for the simple reason that both use a “division of labor” business model.
For example, in a large retainer practice, a search director will delegate the research and screening to a support staff, in much the same way an account manager or sales manager will delegate the “recruiting” function to a staffing coordinator. In contrast, the vast majority of contingency recruiters do their own research and screening to fill their job orders.