The term headhunter may not have the most positive connotation, but when brands are seeking top talent to fill open executive-level position, an outside search firm can be the best bet.
“Find an executive recruiter or search firm that employs a solid recruitment process and cares about the candidate experience,” says Joe Christina, CEO of Church’s Chicken, which last year welcomed David Knies and Hector Munoz as vice president of franchise development and chief marketing officer, respectively.
Although restaurants may seek talent outside the industry, Christina says transferrable skills are critical to success. Perhaps that’s why poaching at the highest levels can be a commonplace practice.
In February, Chipotle used this tactic to steal Brian Niccol away from competitor Taco Bell. The announcement came three months after founder Steve Ells stepped down from his role as chief executive.
But Chipotle is an uncommon example; such C-suite switches are rarely as riddled with speculation and media scrutiny. For the vast majority, the process is less cloak-and-dagger and more nuanced. Church’s, for example, combines several sourcing approaches to cast a wide net.
“First, we leverage relationships and have promoted from within,” Christina says. “We also have external subject-matter experts to help us in the full-cycle recruitment process, and we have combined this with designated internal expertise on culture, organizational values, and looking beyond the job description.”
Good Times Restaurants—parent company of Good Times Burgers & Frozen Custards and full-service sister brand Bad Daddy’s Burger Bar—employed a somewhat similar strategy in its search for a new chief financial officer last summer. The Colorado-based company worked with a search firm but also combed through its own black book of top-of-mind candidates. In July, Good Times welcomed Ryan Zink to the team. Zink was not sourced through the recruiter but rather was someone the brand already knew. In fact, he had worked with the previous CFO, Jim Zielke.
“He technically did not come through the recruiter,” says CEO Boyd Hoback. “We had a lot of personal knowledge of [Zink]. That’s definitely everyone’s first choice: to have a personal reference and try to find somebody through networking.”
Hoback notes that Good Times wasn’t obligated to pay its recruiter a premium in this situation because the company already had a candidate in mind. The team didn’t need a recommendation from the recruiter to know that they would like to pursue him.
Still, Hoback maintains that search firms can be valuable assets, especially when a brand wants to cast a wide net for major C-suite-level positions.
“It’s really worth hiring a recruiter when they have their own database of people that we would not be able to get to otherwise,” he says. “They have years of built-up relationships.”
Bob Gershberg, CEO of Wray Executive Search, a Florida-based search firm that has worked extensively with restaurant clients for decades, says recruiters’ price tags vary based on the starting salary of the person they’re attempting to hire. It’s typically a percentage of that compensation.
In Hoback’s experience, that fee typically ranges between 20 and 30 percent of the desired executive’s starting salary, although he says the bigger firms will usually charge a minimum of at least $50,000. Christina estimates a similar range of 15–30 percent of the new hire’s total first-year compensation.
Gershberg says the price can also vary based on the size of a company. “A big company that’s paying a big salary for a C-suite executive is going to be a much higher fee than for a smaller, emerging brand,” he says.
Beyond building databases of potential hires, recruiters regularly go to conferences, attend social events, and even dine with big players to maintain a robust network of industry contacts. Gershberg says firms, once retained, will often spend time with a brand’s executive team to get a better idea of who would work well in the open role.
“In the bigger companies, you try to spend time with the various players on the leadership team to really get a good feel of what the success factors are,” Gershberg says. “We are looking well beyond just the experience and skill set competency match.”
Other cost considerations reside in the transition period. Gershberg advises brands to retain the departing executive during the search process. In the case of Chipotle, the brand kept Ells and invested in retention agreements with two of its other top execs before Niccol’s appointment was announced. Chief financial officer Jack Hartung stands to earn an additional $1 million if he stays with the brand a year after the CEO starts. Chief marketing officer Mark Crumpacker, under the same condition, will receive $600,000.
It can also prove beneficial for that same executive to stay long enough to help orient the new hire—even if it entails paying two C-suite salaries in tandem. That was the case with Good Times’ new hire, with Zielke and Zink sharing about a month of overlap.
At Church’s, the full-cycle recruitment and selection process for a leadership position ranges from 30 to 90 days, Christina says. However, it’s not unusual, Gershberg says, for such searches to take more than 90 days—particularly when it’s a major brand waiting for the opportune moment to poach the best talent from other companies.
“If you’re going to pay a search firm a fee, you want them to do old-fashioned headhunting,” Gershberg says. “Steal someone who’s doing a great job for their competitor, and that’s why they call us headhunters. It’s an appropriate title.”