Best Startup Team? Don’t Trust Recruiters

Best Startup Team? Don’t Trust Recruiters

To find the best candidates, don’t outsource your hiring. Utilize these strategies to build a team that will help your company grow.



Founders and CEOs of startups get to where they are by utilizing know-how and expertise in their particular industries. However, once they go from start-up to scale-up, that focus must shift from doing to leading and from executing to building — growing a team that will execute for you.

As any leader knows, hiring the right people is a valuable task, but not a simple one. Hiring right frees your time, increases productivity and introduces new ideas to the business… but, on the flip side, hiring wrong can have much more significant impacts on a business: missed opportunities, strained relations, time and energy spent managing the person not the role, and potentially a large legal bill if forced to let someone go.

For these reasons, I strongly advocate that hiring should be the top priority of any hyper-growth CEO.

Want to Hire the Best Startup Team? Fire your Recruiter!

What bemuses me is that while this is a clear necessity, I see too many instances where this task’s relegated to recruiters. Though particularly helpful when hiring C-level staff, leaning heavily on recruiters in a hyper-growth stage is a huge mistake.

The recruiter model is flawed. Many will place an employee and receive a hefty fee of 20-30% of their annual salary even if the employee doesn’t work out. Most recruiters offer to refill positions if the employee leaves before 90 days but even those “guarantees” don’t usually pan out since unpaid searches often mean they’ll send second-rate candidates already in their pipeline and spend very little effort actually “recruiting.”

Secondly, in a fast-moving startup, things change. The role you briefed yesterday may be irrelevant tomorrow and, with small teams, cultural fit is very important. These are factors that even the most qualified and exceptional recruiter would be hard-pressed to manage.

Finally, in the internet age, resources like LinkedIn and Glassdoor have created a much more open marketplace, removing one of the previous key roles of recruiters.

Now that I’ve convinced you (if you weren’t already) that recruitment should start from within, I have a few prongs of attack.

Employ Your Employees

In the heyday of Silicon Valley, hyper-growth tech companies mined their existing employees with referral bonuses. Costing 2-3% of the prospect’s annual salary, this strategy is roughly 90% cheaper than recruiters while providing employees the potential for a $3,000-$4,000 perk every few months.

Pay Your Prospects

At Ultra Mobile, we take this one step further by extending this model to job searchers themselves, offering $1,000 referral bonuses in job postings. Our average post gets about 500 views and 50 applicants. What better way to find a software engineer than to enlist the help of 450 other software engineers? You can employ a broad network of industry experts for a fraction of a recruiter’s fee!

Hire that Amazing Person, Even if the Timing Isn’t Perfect

Sometimes, you may not be looking to hire someone for a specific role but happen across a superstar your company can’t live without. I was at a conference once, and I saw a presentation from a woman who ran a company that had just lost its funding. After speaking with her, it became immediately clear that she was exactly the sort of flexible, problem-solving person we needed, even though there wasn’t yet a particular role for her.

I went back to my executive team and told them, “I just met somebody who’s one of us: confident and unflappable. We need to find something for her to run.” We did, and she’s been a valuable part of our team ever since.

If we had been relying solely on recruiters to fill one specific position, the opportunity to add this beneficial member to our team would have sailed right past us.

Mine Your Network

Don’t underestimate the importance of taking an active role in the hiring process during your company’s hyper-growth phase. Focus on perfecting your hiring skills instead of relying on recruiters to do the heavy lifting. You’ll help your business’s expansion while perfecting a skill that will serve you and your business well for its entire existence.

Send out emails, post on social media, play it up big at cocktail parties, “I have a great new start-up and I need wonderful people in all disciplines and especially software engineers and a CFO.”

I’m not saying recruiters should never be utilized. Use them as part of your hiring strategy but don’t put your company’s future completely in their hands. When your business is still getting off the ground, it’s imperative to take a hands-on role in developing the organization’s most important asset: its employees.


March 30, 2016 / by / in , , , , , , , , ,

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