EO Executive Search is an Exclusive & Retained search firm and we have specialized in hospitality since 2008. We operate in the same manner as other internationally recognized exclusive & retained firms who you are likely to be familiar with - Korn Ferry, Russell Reynolds Associates, Spencer Stuart, Heidrick & Struggles, and Egon Zehnder.

The purpose of this article is to provide an informative, objective, and (mostly) impartial insight into the distinct differences between Exclusive & Retained Executive Search and Contingency Search. We say 'mostly' impartial as we're passionate about what we do, and an Exclusive & Retained approach to attracting peak performing talent to join your organization is almost always the most suitable approach for any senior managerial or senior executive placements. It's not our intention to disparage contingency search firms nor their methodology - contingency search can successfully fulfil many needs for a broad range of positions under the right circumstances. 

As a general rule of thumb, within the hotel sector, an Exclusive & Retained approach is recommended for EXCOM level hires and above - particularly within luxury hotels & resorts where not only the organization has high expectations of their personnel, but also where the guest experience must be impeccable. Another useful point of reference when determining whether or not to utilize an Exclusive & Retained approach is P&L responsibility - generally speaking, if the position that you're hiring for has P&L responsibility for significant revenues, then a bad hire can be very costly indeed. At senior levels, the real cost of a bad hire is the damage done. Strategic damage. Reputational damage. Cultural damage. Leaders and senior executives are paid to make critical decisions. Just six months of poor leadership can have an impact on an organization that can be hard to quantify, and can often take significant time to recover from. So bad hires can be expensive, and while no recruitment process can guarantee the performance of the successful candidate, the exclusive & retained executive search process is specifically designed to not only increase the odds of their success within your organization, but also to maximize the odds of their longevity within your organization. 

For those who are taking the time to read this article whether it's your first time delving into the topic, or whether you would simply like to read our perspectives on a topic that you're already quite well versed in - we applaud your committment towards attracting the best and brightest into your organization! 

Exclusive & Retained vs Contingency Search

Executive search services are an essential part of recruitment for high-level executive positions. There are different types of executive search services, including exclusive & retained executive search and contingency search. While both types of search firm have the same ultimate objective - to fill the position - the modus operandi for each type of search is vastly different. In large part this is related to the fee structure differences. Exclusive & Retained executive search firms are accountable for producing results - the client has paid a retainer and there is a mutual committment from both parties to ensure that there is a positive outcome as both parties have something at stake. Contrast this to Contingency Search where there is no committment from either party other than 'payment upon success' - so the client organization is free to engage with multiple Contingency Search firms. As a Contingency Search firm knows that they're likely to be competing with a number of other firms, they're highly motivated to get as many CV's to the client as fast as possible in the hope that one 'sticks'. The consequences of this are obvious - the Contingency Firm often becomes the defacto agent of their candidates, touting their virtues prior to conducting proper due diligence. Exclusive & Retained executive search offers significant advantages over contingency search. In this article, we will discuss the benefits of exclusive and retained executive search over contingency search:

Focused search

Exclusive and retained executive search services offer a more focused search for candidates. With these services, the search firm works exclusively with the client, providing a dedicated and customized service to identify the best candidates for a specific position. The search process is tailored to the client's specific needs, and the search firm devotes all its resources to identify the best possible candidates for the position. A Research & Identification list of Target Candidates is developed, and is shared with the client for transparency and full disclosure - the initial target list will continue to grow throughout the course of the engagement, and as suitable potential candidates are contacted and their interest garnered, their CVs and other salient information such as current Compensation & Benefits will be shared with the client. The client can then determine if they wish to explore further with candidates for consideration for potential shortlisting.

In contrast, contingency search services work with multiple clients simultaneously, and their search is not exclusive. The search process is more generalized, and the focus is on finding the first suitable candidate. This approach can lead to a less focused search and less time spent identifying the most suitable candidate.

Higher Quality Candidates

Exclusive and retained executive search services are more likely to identify higher quality candidates. The search process for these services involves a more in-depth search for candidates, including tapping into the search firm's network and database of contacts, as well as conducting extensive research and outreach to identify the ideal candidates that match not only the job scope, but also the culture of the client company. The search firm also conducts a thorough screening process to ensure the candidates' suitability for the position - this includes exceptionally thorough reference checking, as well as formal interviews conducted by the search firm in order to produce a detailed report on each shortlisted candidate. This very detailed and thorough approach ensures that the client company can focus their attentions on more high-level aspects of their own internal interview/assessment process, rather than investing precious time getting caught up in the minutia. 

In contrast, contingency search services are more likely to identify lower quality candidates. These services often rely on a more passive search approach, which involves posting job advertisements and waiting for potential candidates to apply. This approach can lead to a high volume of applicants but may not yield the most suitable candidates for the position.

Confidentiality

Exclusive and retained executive search services provide a high level of confidentiality during the search process. These services understand that some executive searches may be sensitive, and it is crucial to maintain confidentiality during the search process. The search firm will ensure that the search process is discreet and may even require potential candidates to sign a Non-Disclosure Agreement before sharing any sensitive or proprietary information with candidates. 

On the other hand, contingency search services rarely offer the same level of confidentiality. Since these services often post job advertisements, it is difficult to maintain confidentiality during the search process, and the client's identity may be revealed to a broader audience. Furthermore, if a contingency firm cannot post the job to a wide audience (whether it be their own database, or via job advertisements) it's understandable that it's unlikely that they will invest any significant time or resources into identifying potential candidates that they're not already familiar with. 

Customized Search

Exclusive and retained executive search services offer a more customized search for clients. The search firms work closely with the clients to understand their needs, expectations, company culture, organizational chart, reporting lines, etc. and they then develop a customized search plan that aligns with the client's specific requirements.

In contrast, contingency search services offer a more generalized approach to the search process. The search firms do not work exclusively with one client, and the search process is less tailored to the client's specific needs.

Better Communication

Exclusive and retained executive search services offer better communication throughout the search process. The search firm works closely with the client, providing regular updates and feedback on the search process's progress. The search firm is also more available to answer any questions the client may have throughout the search process. Exclusive & retained search firms will schedule a weekly conference call to discuss the progress of the search, discuss potential candidates, and recalibrate if required. 

In contrast, contingency search services may not offer the same level of communication throughout the search process. Since these firms are working with multiple clients simultaneously, they may not have the same level of availability to provide regular updates and feedback to clients.

Conclusion

Contingency search is suited for non-critical hires and/or positions where there's a very large pool of potential candidates who may be eager to make a move from their current employer or who are currently unemployed. Exclusive & retained search is suited for high-level leadership positions where it's critical for an organization to invest wisely in human capital.