5 Crucial Considerations To Hire a Recruiter for Your Startup

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Being a startup owner is anything but easy.

Once you’ve created your business setup and potential clients start coming your way, you’ll realize you won’t be able to meet their demands and scale your company over a certain point if you don’t have the right talent that will ultimately shape your company’s vision.

This is where a recruiter or hiring manager comes into the picture!

In one of his recent articles, Christian Wylonis, Co-Founder and CEO of The Org, explains why a recruiter plays a vital role in deciding whether your new venture succeeds or fails:

“When startups look to identify candidates, solid market research and candidate identification from headhunters is an incredible perk, and lifting this off the shoulders of time-strapped startups is therefore absolutely a value-add.”

But how exactly do you decide if the recruiter you choose will be the right fit for your company and get you desired results, especially when you’re on a tight budget? Keep reading to find out!

Different Types of Recruiting Options To Choose for Your Startup

Internal Recruiters

According to recent findings, 68% of the surveyed companies placed greater efforts on direct hiring. These organizations employ recruiters internally, who then find qualified candidates to fill vacancies across different functional departments of the company.

Because the parent company directly employes these recruiters, they are called internal recruiters or in-house recruiters.

Jobvite’s 2017 Recruiting Funnel Benchmark report found that internal recruiting is nearly six times more effective than other sources of recruiting.

hire a recruiter

Source: Lever

Another report found that candidates sourced through internal recruitment efforts have a 22% hire rate. This hire rate is more than any other conversion technique for human resource management.

Keep in mind that as cost-efficient and convenient as it looks, this recruiting model alone won’t prove to be as effective if you’re trying to achieve hyper-growth or rapidly scale your startup in a relatively short period.

This is especially true because when you’re trying to grow quickly. You’ll need more resources than usual, at least for a few months or until the growth curve reaches a point where it can sustain itself. Hiring that many recruiters as full-time employees isn’t a feasible solution. When your company is in the startup stage, you’ll only end up spending more time and effort compared to the return on investment you make.

However, there’s another category of recruiters that you should consider hiring under these circumstances.

External Recruiters

According to findings of one recent research study conducted by SHRM, close to 83% of HR professionals reported having difficulty recruiting suitable job candidates in the past year. 

External recruiters, also commonly known as staffing agencies or agency recruiters, can be efficiently utilized to target a vast talent pool to scale your startup quickly.

External recruiting agencies come in all shapes and sizes. They can come from national agencies, regional companies, or even local firms. Several executive search firms have prior experience filling specialized or high-level positions for startups. 

Some startups also hire recruiters on-demand to scale their business as they grow.

Beyond their expertise, reputation, and niche, all external recruiters can be categorized based on their compensation arrangements. There are two primary compensation models:

  • Contingency Pay: When you hire a recruiter who works on contingency, you pay them when they’ve met two conditions. A candidate must accept the offer and remain employed with your company beyond the initial trial period (usually three months). Contingency commission, the principal source of compensation for these recruiters, can be anywhere between 15-25% of the new hire’s first-year annual salary. If you do not choose the candidate that the contingency recruiter suggested, you are under no obligation to pay them.
  • Retainer: This is more of a hybrid recruiting model. Retainer recruiters usually work in an exclusive arrangement whereby a single hiring firm is provided access to fill a specific position at the company. When you hire a retained recruiter, you treat them as an extension of your organization. They partner with your internal recruiters to formulate an effective candidate attracting strategy, facilitate the selection procedure, and comb your hiring model for high-impact candidates. Because of the resource commitment and time involved in this dedicated search, retained recruiters typically charge up to 50% of the hire’s first-year annual salary.

Crucial Considerations to Hire a Recruiter for Your Startup

1. Experience

Finding a candidate with some prior experience in your niche plays a vital role in hiring the right recruiter, especially if you own a startup.

The longer a recruiter has been in the industry, the greater their chances of filling open positions at your company with the right candidates. Their network and existing talent pipelines will be more comprehensive than those that have only recently entered the market.

They can tap into deeper and unconventional channels to fill your roles, and they know ways to attract and engage candidates that aren’t active job seekers, conduct a job search frequently, or visit job boards. This can improve your hiring process quickly.

2. Specialization

Your probability of finding the right candidates for your startup will be relatively low if the recruiter you hire isn’t truly able to understand the nuances of your industry and unique hiring needs.

Invest effort toward finding specialized individuals who have a fair understanding of your local market and industry and hold an informed perspective of the developments happening in the recruiting sphere. The larger the extent of their knowledge, the better your chances of growing, especially since global hiring trends have rapidly transformed due to the ongoing COVID-19 pandemic.

3. History of Work and Success

Another critical consideration you need to be mindful of when hiring a recruiter or recruiting team for your startup is – understanding how they attract candidates. 

Do they post roles, or do they have a bank of resources to draw from? Also, ask if they are producing job applicants that are qualified and likely to stay. One way you can find this out is by asking about their previous work history and results. 

Some of the things you can ask a staffing agency or hiring managers to assess their caliber are:

  • Average time they take to hire a resource
  • Technique they follow in formulating job descriptions
  • Steps involved within the interview process they usually conduct
  • Percentage of searches they’re able to complete on a given day
  • Percentage of people employed by them that have stayed two years or more

4. Fees/Cost of Providing Services

The costs associated with recruitment can be sky-high and end up digging a hole in your pocket if you aren’t mindful from the beginning.

If you hire a recruiter internally, you might assign a fixed payroll for them just like you would for any other employee. However, if you hire a recruiter or recruitment team externally, they’ll likely charge a percentage of the recruit’s annual package.

What truly matters is that you assess your budget and how much you’re willing to shell out. Staying updated on industry-wide hiring trends and what your counterparts are doing to land the best recruiters can take you a long way in discerning if it’s going to be worth investing capital toward hiring one or not, at least for the starts.

5. A Comprehensive Understanding of Your Company’s Unique Staffing Needs

Finally, any recruiter you employ, external or internal, needs to share a sense of commitment toward your startup. Only then will this recruiter consistently strive to steer growth for your company. 

If they are willing to take the time to get to know you, your expansion timeline, growth criteria, and unique hiring requirements. In that case, the odds of them losing the company’s vision and making bad hires will be relatively low.

Get in touch with us at Recruiter.com to learn more about how you can quickly hire a recruiter for your startup. Our team of recruitment experts from across the US has in-depth knowledge of the field. It can quickly accelerate your company’s growth by helping you expand your team and ensure a positive return on investment in the long run.

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