Most CEOs early in their tenure think they hire well themselves and would rather spare the expense of using a third party or hiring a recruiter in-house. But the reality is an experienced recruiter that has their pulse on the market, and employs best practices in building a pipeline and soliciting interest from candidates will bring you a slate of candidates you could never replicate yourself. And even if you can do it for one role, can you keep it up for the next ten roles?
Making hiring decisions from deep, high-quality pools of candidates for every position makes an enormous impact over the short and long-term. If you aren’t agonizing over your choice between two or more amazing candidates for every role you fill, then your hiring process isn’t good enough. The quality of your early team has a compounding effect on the company as you scale:
- Your early employee base and leadership team is instrumental in establishing your company culture as you scale.
- “A+” people hire other “A+” people.
- If you’re 10 people growing to 20, 50% of your team will be comprised of the new employees that come through your new hiring practice (not the original hand-selected founders/first employees).
Netflix CEO, Reed Hastings, coined the phrase talent density which really summarizes this point nicely.
Building your in-house recruiting function
This almost always comes too late in a company’s lifecycle. It’s not obvious that a company’s struggles come directly from an underperforming team — there’s always something to blame for the lack of breakout success, like slow sales cycles, bad marketing, lack of education, difficult tech, etc. But recognizing that people are your greatest asset and only your team can overcome all of that is why we feel so strongly about investing as early as possible in a strong hiring process. There are two strategies we recommend:
- Hire an in-house recruiter - A good rule of thumb is if you have 10 or more hires planned for the year, you should strongly consider hiring a full-time recruiter. And the larger your war chest and the more confidence you have in your multiyear business plan, the earlier you should hire a recruiter — it could even be your first hire! This is admittedly a little extreme, but emphasizes the point.
- Leverage an outsourced talent acquisition agency - This is not hiring a commission-based recruiter; save that for key roles. Instead, this is a recommendation to use outsourced search firm like Devise, which offer scaling companies a flexible solutions that serve as an extension of their in-house recruiting teams. Typically, they work on a “cost plus” model, executing their playbook with their personnel and augmenting your workforce through the hiring push.
References
How to hire externally
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