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HR & Finance
Powered by Battery  |  April 8, 2019
Hiring A Recruiter: 3 Things Startups Should Know

As we mentioned above, if your startup is growing, you’re hiring. And if you’re hiring senior-level talent, you probably need an outside recruiter. Few in-house recruiters have the expertise or network that a professional, third-party recruiter offers. Whether you’ve just closed a funding round and you’re looking to scale up, or you’ve lost a key team member and you need a top-notch replacement, this type of recruiter can help you find the person with the right expertise to take your company to the next level.

Many great CEOs and entrepreneurs don’t know how to go about hiring a recruiter. It can be daunting to trust a challenging and high-stakes process to an outside consultant. However, there’s good news: The right recruiter does much more than hire someone. They help you clarify your job requirements; educate you on the hiring market and competitive comp; and act as a brand ambassador for your company – all while connecting you to top executives who aren’t looking for a job, but trust recruiters to send only the best opportunities their way.

Here are 3 tips for best practices when hiring a recruiter:

Opt for a specialist.

Don’t work with recruiters who say “call me for anything” because it’s impossible to excel at recruiting broadly. If you want to hire the best talent, you need to start by hiring the best recruiter in a particular specialty. A specialist will not only know everyone on your current list of candidates, he will have talked to each of them in the past few months. He’ll have the inside scoop about each individual, like “This person is thinking about starting her own company, so she’s not seriously interested,” or, “This person is good, but he can’t help you scale beyond a team of 50.” When you identify recruiters you like, find how much experience they have personally in that area of expertise. If their firm has done 50 CTO searches, but they’ve only done one themselves, they’re not truly an expert yet. On the flip side, with very senior recruiters you’ll want to make sure they’re handling the search themselves and not assigning the work in a hands-off way to junior colleagues who are the ones who do all the actual grunt work in terms of sourcing and interviewing candidates.

Go local if possible.

Startups located outside of tech-hub cities may need to search nationally for a senior-level position. Otherwise, work with a local recruiter whenever possible. A great recruiter will represent you and do an initial interview with each candidate. You want someone who can meet candidates face-to-face and assess their executive presence.

A local recruiter is also plugged into the local network in a way that an outsider can’t be. Recruiters will know and meet a lot more people in their hometowns than they would somewhere else. All that networking makes surfacing great candidates much easier.

Pay up for a retained search.

Recruiters either work exclusively for you, as part of a retained search, or they work on contingency. With a retained search, the hiring company pays a flat fee (usually in three installments), which for a C-suite role can range from $80,000 to $110,000. A recruiter working on contingency would only get paid if you hired a candidate they brought you, and they’d typically charge 25 percent of the person’s annual compensation.

Contingency recruiting tends to be the cheaper option, which many cashflow-minded startups like. But I firmly believe you get what you pay for.

A recruiter working on contingency can’t afford to do as much in-depth work on your search as a retained consultant. They might do a quick 15-minute call to understand the hiring company’s needs and its brand culture. After that, you have no control, or even insight into, how the recruiter represents your company to candidates. As we’ve noted before, every touchpoint in the recruiting process reflects on your brand. Make sure you’re making the best possible impression.

A retained recruiter is working for you exclusively, as a consultant. They’ll spend a couple of hours with you and your team, making sure they can answer any question a candidate might have about your company and the position. They’ll check in with you every week and update you on the status of each potential candidate they’re approaching. Plus they’ll give you invaluable feedback about what candidates are saying about the role and the company. You’ll find out if your CTO is constantly running late to interviews and frustrating candidates, or whether you need to refine your CEO’s elevator pitch for the startup.

Hiring a recruiter isn’t a cost you should attempt to minimize; it’s an investment in quality. Still not convinced? Consider these two points: First, the most gifted recruiters I know work on a retained search basis only. They don’t have to work on contingency.

Second, a senior-level hire usually brings a loyal team along with them. Landing the exact-right CTO can fill out your engineering team for your company’s next growth phase, and you’ll be equipped with a well-honed engineering machine as well as a top-notch leader. That fact makes a large recruiting fee look less like a frill and more like a smart value play.

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Working with a recruiter, especially in a retained search, can be intimidating at first. But a recruiter can be an invaluable addition to your team. A great specialist recruiter knows everyone in your area who match your job’s requirements, and they’ll be with you every step of the way until you land the perfect person to grow your company.

The information contained herein is based solely on the opinions of Powered by Battery and nothing should be construed as investment advice. This material is provided for informational purposes, and it is not, and may not be relied on in any manner as, legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by Battery Ventures or any other Battery entity.

This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and is for educational purposes. The anecdotal examples throughout are intended for an audience of entrepreneurs in their attempt to build their businesses and not recommendations or endorsements of any particular business.

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