Who are the best startup recruiters?

If you're an exciting startup and have no problem recruiting A-players to your company. Ignore this article. This short article will explain the world of startup recruiting and provide a few tips on how to ensure you cost-effectively hire great people.

Hiring well is one of the most critical aspects of any startup. In the early days of high-growth startups, you've only got a small team which means a bad hire can cause serious issues to your business. Recruiting for startups can be extremely tough because the type of people that will excel are few and you don't have the same budget that all those scaled companies have. 

Hiring isn't difficult. It just takes a lot of time.

Seventy hours to be precise.

In the early months, the founding team should look after the majority of hires but once you hit ten people your growing tech company needs you elsewhere.

Hiring costs money. A founder spending 70 hours on a single hire won't lead to an invoice but the opportunity cost is half that month not spent growing your business.

Every company needs support hiring and that support comes either from a talented internal recruitment team or trusted startup recruiters. The best outcome is a balance between internal talent, talent-as-a-service and third-party recruitment agencies.

Before you bring on external help, its always good to try the end-to-end process yourself so you can appreciate the complexity when hiring talented colleagues. We've shared our entire process which you are welcome to copy. If you need even quicker solutions then feel free to get in touch with us.

What type of person succeeds working in start-ups

A startup recruiter knows that the types of people who succeed in tech startup jobs are very different to those you'll find at large enterprises. It's almost impossible to be equally good at assessing job seekers for all company sizes.

Jason Lemkin famously said that the first 50 employees in your organisation should be pirates or romantics. These are candidates for reasons that don't make sense live and breathe startups. They are the candidates who actively leave restrictive environments and, freed from shackles, step in as owners.

“In the old days, only weird people worked at startups. It was so quirky.” 

As startups get significantly more glamour and press than mature companies, it's easy to think that a large number of the working population work in startups. That isn't true. In 2020, European tech start-ups employed 2 million people. This is 1% of the working population.

Although it's easy to romanticize the huge amount of ownership and freedom that startups can provide their top talent we forget that ownership comes with total accountability and freedom comes with a total lack of rules. Uncertainty leads to anxiety and few people are cut out (or want) that kind of stress.

The right candidates should have the following personality traits and it's important to keep an eye out during your recruitment efforts

• Internal locus of control

• The ability to think creatively

• Rule breakers

• Exceptionally hungry

• Humility

Talent as a service

Would you believe it if I said that some services cost less than having an internal talent acquisition team?

Berg Search are specialised startup recruiter offering a talent-as-a-service approach to hiring.

As startup recruiters, we only work with innovative tech companies. This is because the type of person who thrives in a startup company is very different to someone who excels in a large company.

Our long-term relationships incentivize us to find you the best talent. We don't simply make a hire and then leave, we're in it for the long haul.

Generalist recruiters

The traditional model of recruitment involves focusing on a particular geography, and function (eg java developers in Leeds), building a pool of candidates and placing them at whatever company you can. The recruitment agency has a shortlist of vetted, immediately available talent to place at companies where speed is an issue. A good example of a recruitment agency like this is SThree which owns the brand Computer Futures, or perhaps Selby Jennings which is owned by Phaidon.

These companies are great at providing candidate lists quickly but they don't make ideal startup recruiters because their model is volume over quality. For them, the ideal customers are large corporations with unlimited hiring needs or small enterprises that can't compete with the vision and salaries of tech startups.

They aren't bad recruiters, their model simply isn't built for startups or scale-ups.

Specialist recruiters 

Recruitment is a broad church and for every niche, there is a recruitment agency supplying that niche. From temporary medical locums to video game developers there is an agency that focuses on keeping an up-to-date talent pool and supporting companies when their needs are a little specific.

These contingent recruiters are also not great solutions for startups because they have essentially the same model as do generalist recruiters with the difference that they focus on a particular function.

Embedded recruitment / RPOs

The embedded recruitment firms were created specifically for startups and can be considered good startup recruiters.

For a fixed annual fee (between £7,000 and £12,000) an embedded talent firm will provide you with an experienced recruiter who joins your company for a fixed period of time. Like any other contractor, the recruiter will essentially work as an employee with their own corporate email address.

If you are in scale-up phase and have a large number of hires to make in a fixed period, then using an embedded recruiter allows you to start filling jobs from day one (as opposed to hiring the hiring team before starting) and then giving the team back to the embedded firm once your hiring needs are covered.

You pay a premium for the flexibility and the immediacy, not do dissimilar to why you'd lease office space from WeWork.

Embedded recruitment firms make a fine choice as startup recruiters but do have some drawbacks

• Just like hiring outsourced tech, there is a huge variation in the quality of people that you receive.

• Because embedded firms place their consultants in different firms with different needs and tools, its more difficult or those consultants to master a particular recruitment process

• Recruitment professionals typically excel in one or two functions and so to conduct a board hiring exercise, you may need a team of four embedded recruiters which ends up costing a lot of money.

Executive search

Executive recruitment is a specialist form of recruitment that focuses only on senior hires. As an example, the pool of SaaS finance VPs is quite small and its the job of an executive search professional to keep a strong network of talented people so they can provide high-quality matches between candidates and jobs.

Not all executive search firms can be considered great startup recruiters. The big five (Korn Ferry, Spencer Stuart etc) focus mainly on recruiting C-Levels for large companies and as we outlined at the beginning of the article, the best talent for startups are cut from a different cloth to those at enterprise firms.

For early-stage companies, check out Finders Keepers, Erevena and the Up Group.

These services put more hours into finding talent than embedded search firms but they come with a big price tag. Fees are usually around 25% of the first year salary, with a third of that fee paid up front as a retainer. If you want to hire a VP Finance, don't be surprised at spending £50,000 for the privilege.

If you work with Berg Search or an embedded firm, a great strategy is to allow them the first attempt at sourcing executive talent. If they're successful, the savings equate to a full year's salary!