When searching for executive talent in the hospitality industry, businesses typically choose between two primary approaches:

Retained Search and Contingency Search. Understanding the advantages and limitations of each method can help companies make informed hiring decisions that align with their strategic goals.

Retained Hospitality Executive Search

A retained executive search is typically used to fill senior or mid-level executive positions. 

Companies opt for this approach when an executive departs, is promoted, or when a new leadership position is created due to expansion or restructuring. Even if an internal candidate is being considered, an external search firm may be engaged to ensure a fair and objective selection process, particularly for high-profile roles in publicly traded companies.

Key Characteristics of Retained Search:

• Who: Senior to mid-level executive hiring
• What: Engaging a search firm to source and vet both external and internal candidates
• When: Executive departures, promotions, or company expansions
• Where: Especially relevant in publicly traded companies but applicable across the industry
• Why: Opportunity to redesign roles, expand services, or strengthen leadership teams

Pros of Retained Search:

• Consistent Messaging: The search firm acts as a strategic partner, ensuring a unified message in the market about the company’s leadership vision.
• Comprehensive Service: The firm typically handles position descriptions, candidate sourcing, interviewing, background checks, and compensation negotiations, reducing the burden on internal HR teams.
• Long-Term Strategic Partnership: Retained searches foster lasting relationships between companies and search firms, leading to continued success in hiring.

Cons of Retained Search:

• Upfront Cost: Typically, the client pays a retainer fee, often equal to one-third of the candidate’s first-year compensation, spread across the search process.
• Time Investment: A retained search usually takes around 90 days, depending on factors such as interview scheduling and candidate availability.

While retained executive searches require an initial investment, they provide a thorough, strategic approach to finding the best leadership talent.

Contingency Hospitality Executive Search

A contingency search is a non-exclusive process where multiple recruitment firms and internal hiring teams compete to fill a role. Speed and volume are prioritized, making this a preferred option for lower-level or high-turnover positions.

Key Characteristics of Contingency Search:

• Who: All levels of positions, especially mid-to-lower-tier roles
• What: A competitive, fast-paced hiring process
• When: Immediate hiring needs with an unrestricted timeframe
• Where: Commonly used by large corporations with ongoing hiring demands
• Why: Maximizes candidate pool while minimizing upfront costs

Pros of Contingency Search:

• No Upfront Financial Commitment: Companies only pay recruitment fees when a candidate is successfully placed.
• Fast Turnaround: Ideal for businesses that need to fill positions quickly.
• Lower Fees: Generally, contingency fees range from 20-25% of the first year’s salary, making it a cost-effective option for bulk hiring.

Cons of Contingency Search:

• Limited Service: The recruitment firm typically provides resumes but does not conduct in-depth candidate assessments.
• Higher Risk of Mismatched Hires: The fast-paced nature of contingency hiring may lead to hires that are not the best cultural or professional fit, leading to increased turnover.

For businesses needing to fill multiple roles quickly, contingency search offers a broad and cost-effective hiring solution.

Choosing the Right Approach

Both retained and contingency searches offer unique benefits. Retained searches are ideal for strategic, high-level hires where thorough vetting and a long-term partnership are essential. Contingency searches work best for immediate hiring needs, offering a larger candidate pool with minimal financial risk.

Regardless of the chosen approach, working with a professional, unbiased search partner with a proven track record in the hospitality industry ensures a more efficient and successful hiring process.