Tue 4 Sep, 2018

My business is about to receive Series A funding and I need to hire senior talent – what are my options?

Picture the scenario: you’re a relatively new but exciting business that’s beginning to scale and finally, through a lot of hard work, you’ve proved the product is a market fit.

You’re about to receive your series A funding round.

Up until this point your company has been staffed by a small team that includes its founders, the professionals they’ve acquired through their networks and some very intelligent graduates.

You know you now need to hire more senior level talent and bring experience into the business – growth is looking to be so rapid your team can no longer afford to learn and make mistakes on the job. You need to bring in professionals that have experience of navigating high growth across every function – it’s very likely you’ll need some additional board members.

You want to hire an experienced industry leader that will not only drive the company forward, but also attract talent themselves from previous roles.

How do you go about securing this talent?

Recruiters are expensive. The fees are high for a potentially dubious outcome that makes the expense hard to justify.

What are the pros and cons? What are your options?

A) Hire an in-house recruiter.

At first, this seems like a no brainer, as you can most likely hire an in-house recruiter on an annual salary that is less than the placement fees required for 2-3 senior members of staff.

However, before you go down this route there are a few key points to consider.

In-house recruiters tend to be professionals that started on the agency side – an environment that pays significantly more than in-house roles – but for some reason it didn’t work out for them (which could be a red flag).

This means these professionals are not experts on any specific department within your business, such as your performance marketing team.

If they don’t come from this background they won’t have the market relationships or extensive network that comes from working across multiple businesses.

They will not only find it incredibly hard to create a good research list that includes top tier talent, but they’ll also find it difficult to explain the position accurately to interested parties – which will subsequently dissuade good candidates from applying for the position. Your in-house recruiter will consequently find it very hard to qualify applicants.

Of course, they will be able to organise and run your pipelines effectively and keep momentum going through the whole recruitment process, as they will be focusing solely on your company’s needs without having the distraction of working across multiple businesses at the same time.

However, a common outcome of this situation is that the company hires an in-house recruiter and this professional ends up dealing with multiple niche agencies to find the talent, due to their lack of experience in the industry. This means a company then has the cost of in-house recruiter in addition to the expense of the pricey recruitment fees they wanted to avoid in the first place.

There is also the problem that subsequently arises after the whole recruitment process is over, and your in-house professional is left twiddling their thumbs…

B) Hire an RPO.

This solution will involve either an external individual or company temporarily managing the recruitment process for your business.

The fee structures vary but it’s typically a mixture of performance-based targets combined with a monthly retainer. The beauty of this option is that you can turn the expenditure dial up and down in line with your projected recruitment needs.

However, as with the in-house recruiter solution, there is again the issue of the lack of specialism within these individuals and agencies. The same scenario occurs where RPOs often have to resort to using specialist recruiters and pay the fees to access the top tier talent pool, as they don’t have the network or the industry knowledge required.

Whilst appealing at first, this option has a habit of becoming the most expensive recruitment solution, because these agencies are still paid at least half of their fees through the monthly retainer – even if they aren’t successful at filling in the roles.

C) Use recruiters.

There over 35,000 recruitment agencies in the UK alone, and they range from being exceptionally good to appallingly bad. It’s important for you to find one that understands the needs of your business and the specifics behind the roles you are recruiting for.

Recruitment fees can differ from being purely success-based percentages, or may include some upfront costs (i.e retainers) of variable amounts. They can range from 10% to 100% of the salary you’re looking to recruit for. You can assume that a recruiter offering the 10% fee should be avoided, and a recruiter charging 100% is likely to be one that is accustomed to placing new CEOs into multinational, high profile companies.

The benefit of using recruitment agencies is that, whilst it may initially appear to be the more expensive option, you can predict the total costs easily and much more accurately – the fees and specific outcomes are agreed upfront.

Are they worth the fees?

If you choose to go down this route it is vital to research around for a recruitment agency that is right for your company. You need to select one that completely understands the requirements and specialities behind the roles they are going to be hiring for.

Look into their background, have they recruited for companies in a similar position to you, and do they have successful testimonials to support this, or offer references?

Spend some time trying to find the specialists in your field. They will have the industry experience required to effectively vet candidates and will be able to draw up accurate lists that include the top tier talent for your specific role. Plus, they will be able to describe and sell the precise working expectations to applicants that will draw in good candidates that qualify perfectly for your roles.

The key benefit here is that these specialist agencies speed up the whole recruitment process – reducing the time spent on hiring and the fees that build up over that prolonged period, and ultimately provide a much higher calibre of candidates to recruit from.

The best agencies out there will also act as consultants when it comes to helping you build up your team, as they will have vast amounts of experience in growing teams and insight into what works best and what to avoid. They should be ready to sit down with you and not only listen to your requirements but also advise you on what you should be looking for in a particular role based on your company’s needs – often an initial hiring plan can completely change with a good agency’s expertise thrown in.

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