The Ideal Hiring Mix: How to Split Talent Acquisition Between In-House and Outsourced Resources

As a startup founder, you field many questions from your team, investors, and other founders just beginning to hire. One of the most common questions is: Is hiring a recruiter better than going with an agency?

This is a great question to ask. If you're doing it right, recruiting is a time-consuming process, and even then, being 100% sure that you've got the right people can be a bit of a gamble. When you're starting out, you may need to invest a considerable amount of time and resources into putting together your core team. But when you hit a phase of rapid growth or your product team is understaffed, this approach isn't pragmatic and doesn't scale too well. 

A well-matched in-house recruiter or an agency partner can catch you up and help propel your organization through massive transitions. The operative part, however, is "well-matched." Suppose you end up with an in-house recruiter who doesn't get your company or mission at a fundamental level or doesn't possess the full suite of recruiting skills. In that case, you can under-optimize your most critical growth lever. Similarly, if your agency partner isn't able to anticipate your needs and is unable to keep up with your business' dynamic needs, you'll be acquiring talent in the most expensive way imaginable. In addition to the agency fees, time and resources, you'll need to ensure that your new hires are trained to operate at the level expected. This is a really high-stakes decision. 

At ChatterWorks, I've had the opportunity to see recruiting relationships play out at hundreds of companies of all stages.  In-house recruiters, agencies, and consultants are crucial to the modern talent acquisition ecosystem. In this article, we’ll explore what hiring mix works for your organization. 

Define Your Hiring Needs

Most business advice is too generic – a one-size-fits-all approach just doesn’t work in talent acquisition. It addresses one experience, but your recruiting needs could differ depending on your organization's age, industry, budgets or funding, etc. So, let’s define what your hiring need actually is. Then we can solve it right.

How many hires? How many people are you hiring? Ten sales development reps? One Java engineer? A product owner? Make a list, and anticipate the near future.

What roles do you need to fill? Are you hiring for niche skill sets in a competitive market like cybersecurity? Certain roles are more straightforward than others. Sales, customer service, marketing, and other non-technical roles have a much higher talent supply. Are you hiring for entry-level roles? Leadership? Build an inventory of the roles you need to fill and map them to the job level.

What’s the timeline? How fast do you need these people? Most likely, this is a blend — you need four people immediately and then three more per quarter for the next two quarters.  It's helpful to have a timeline to determine if you can scale your resources against your business needs. Bucket your headcount accordingly.

What is your budget? Do you have a set budget or incoming funding that will cover your recruiting expenses? Will you be able to pay competitively for the talent you’re looking to hire?

These answers should accurately depict your current needs and outline future aspirations. From experience, you need to develop visibility for the next three quarters so you don't get stranded without the talent you need to execute near-term goals.

For example: Is product development ramping and projected to continue? Is your current development team at the risk of burning out (and will continue to be unless you do something)? If that’s the case, you need more developers now, so you will need to build a pipeline to gain visibility.

Are you developing generative AI (GenAI) capabilities to test if it will work for your customer support? A lean development team will probably do it until you decide to scale GenAI implementation across other areas of your business.

Did you 4X your revenue, and your 20-member team is about to jump to 100?  You'll probably need an engineering leader to lead that charge. You’ll need an executive search agency, and after that, put deliberate thought into building a pipeline.

Write down your requirements and plot them against resource availability before you begin.

Choosing Your Hiring Mix

Having established your needs, you can begin to solve them. 

Before we look at the in-house vs. outsourced models for hiring, it is critical to understand what sort of recruiting skills you'll need to manage and develop your talent pipeline. Based on your assessment from the section above, you will need more skills than others, but how do you prioritize the skills crucial to your organizational context?

Let's look at some common scenarios where you need recruiting talent to achieve your business and hiring goals. 

Grunt Work

Now, this in no way undermines all the hard work recruiters do. However, at a fundamental level, a recruiter helps candidates move along the hiring funnel. They do outreach, coordinate with hiring managers, schedule interviews and communicate with candidates. While this may look like something you don’t need specialized skills for, it is time-consuming. Now, if you have the bandwidth, you could do this yourself.

However, if you’re already strapped for time, doing the grunt work yourself will have a huge opportunity cost. Burning time scheduling interviews when you could be working on the product, pitching to investors, or even making sales is something you'd want to consider when prioritizing your recruiting skills. If time is a constraint, you may need to bring on someone to help.

Specialized Recruiting Skills

Recruiting practice becomes highly specialized as you move up the value chain. Some recruiting demands industry and practice knowledge that goes beyond simple outreach, scheduling, and coordination. To ensure access to the best talent for each role, you need recruiters with skills to develop your ideal candidate profile, score resumes, write job descriptions, source candidates, and do high-volume email outreach with consistent impact.

These recruiters have experience with tools of the trade that help improve search and engagement – LinkedIn Recruiter, ChatterWorks, and ATS solutions. They excel at cold-calling, phone screening and reference checking. They could even help you put together job competence frameworks and build a job advertising roadmap for your most important roles.

You need recruitment specialists when you don’t have a lot of experience recruiting yourself or if you are just beginning to put together your HR team. You’ll also need these skills to fill out high-volume roles for software development, sales, or marketing.

Industry and Skills Expertise

Seasoned recruiters who have spent a significant time in the industry or have deep experience hiring for specific roles tend to have a strong network or pipeline of candidates that may dwarf yours. They may bring a pre-filled pipeline that could include candidates they’ve interacted with in the past or even placed. Here, familiarity with the talent pool brings a strong advantage. Tapping into skills specific to industry and job roles, you can bring down the time-to-hire dramatically and also bring higher-quality talent into your organization.

You’ll need these skills when hiring high-volume candidates across key roles in specialized industries like healthcare, banking and insurance, pharmaceuticals, and more. These recruiters enjoy a tremendous influence over their candidate pipeline and can be expensive.

The pay-off for recruiters with this expertise is particularly high when you’ve exhausted your professional network and need to fill multiple roles quickly. You should also lean on these recruiters to hire for skills and industry experience that aren't well-represented in your network.

Talent Acquisition Leadership

Recruiting and talent acquisition leaders bring the ability to define and implement robust processes in the context of your hiring needs. A recruiting leader with experience across a wide range of organizations can help you identify your needs, build a current state talent inventory and develop specialized candidate pipelines for roles that can be replicated as you ramp up hiring. Acquiring a recruiting leader’s skills within your organization will enable you to create your recruiting infrastructure and candidate experience. They will implement and optimize processes like phone screenings, sourcing and outreach, referral programs, interviewing, feedback documentation, or even onboarding to bring visibility into your hiring process' revenue and performance levers.

Acquiring this skill set for smaller organizations will not be a major priority, particularly early on when you’re looking to score some quick wins and meet your tactical hiring goals. If you’re not at the stage where you’re consistently moving hundreds of candidates through a pipeline to fill dozens of roles, then investing in these skills may not be the right move. Talent acquisition leaders bring a longer-term vision for your organization and don’t come cheap. So, unless you are looking to scale your hiring efforts seriously or trying to gain visibility into the business impact of recruiting, you can pass on hiring a talent leader. On the other hand, if your organizational context is unique and your candidate close rates are lower than the industry benchmark, you may want to consider engaging a talent leader to identify intervention points in your current hiring process.

Regardless of your path (in-house vs. outsources), these recruiting capabilities will define the recruiting skills you need to go after. You need to assess which of these skills or expertise is critical to your business in terms of where you stand today.

The Hiring Mix that Works for You: In-house vs Outsourced Recruiting

Now that you have a good understanding of your hiring needs and the recruiting talent spectrum, we can move to the critical decision you need to take next:

Understanding Your Recruiting Needs

We discussed this earlier, but it's worth reiterating. Before diving into specific resources, take a step back and assess your hiring goals.

  • Number of Hires: Are you looking to fill a few key positions or embark on a large-scale hiring spree?
  • Roles: What types of expertise are you seeking? Technical skills? Leadership experience?
  • Timeline: Do you need candidates to start immediately, or do you have some flexibility?
  • Budget: What resources have you allocated for recruiting efforts?

A clear picture of your requirements is essential for making informed decisions about your recruiting strategy.

The Recruiting Talent Spectrum

Now, let's explore the various recruiting resources available and the unique strengths they bring to the table:

  • In-House Recruiters: Dedicated recruiting talent focused solely on your company's needs. They develop a deep understanding of your culture and mission, leading to high-quality hires aligned with your long-term goals.
    • Ideal for: Organizations with consistent hiring needs and the budget to support a full-time recruiter.
    • Considerations: Requires an investment in salary and benefits. Building a pipeline can take time initially.
  • Contractors / Consultants: Temporary recruiting solutions to bridge hiring gaps or manage smaller-scale initiatives. Offer expertise and immediate candidate flow without a long-term commitment.
    • Ideal for: Organizations with short-term or fluctuating hiring needs.
    • Considerations: Cost per unit of time may be higher than in-house recruiters.
  • Recruitment Process Outsourcing (RPO): Partnering with a specialized firm to manage your entire recruiting function. Provides scalability and access to a wider talent pool.
    • Ideal for: Organizations experiencing rapid growth or requiring a significant number of hires in a short timeframe.
    • Considerations: Higher investment than in-house or contractor solutions.
  • On-Demand Resources: Services like sourcing, pre-screening, or scheduling interviews can supplement your existing recruiting team and quickly scale candidate flow.
    • Ideal for: Organizations needing to augment their recruiting efforts without a permanent headcount increase.
    • Considerations: Requires careful management to ensure quality control and maintain institutional knowledge within your company.
  • Contingency Recruiters: Fill open positions with pre-qualified candidates for a fee typically based on a percentage of the hired candidate's salary. Offer speed and immediate access to talent.
    • Ideal for: Filling immediate needs or acquiring niche skills not readily available through your network.
    • Considerations: Requires clear communication of requirements to avoid resume overload and ensure a good fit for your company culture.
  • VC Recruiters: Leverage your investors' network and expertise to identify qualified candidates and build a strong talent pipeline.
    • Ideal for: Startups seeking guidance and introductions from experienced investors.
    • Considerations: Availability may vary depending on VC firm and their involvement with your company.
  • Retained Search: High-touch recruiting for senior-level executive positions. It guarantees a dedicated search and often a successful placement, but it comes at a premium cost.
    • Ideal for: Filling critical leadership roles where a perfect fit is essential.
    • Considerations: Highest cost option, best suited for crucial hires with a significant impact on your company's future.

As we saw, there is no one-size-fits-all solution to determining the perfect hiring mix. The best approach often involves a combination of these resources. You can refer to the hiring mix quadrant below and map them to your budget to better understand what resources/combination of resources will work best for you.

Candidate volume vs. hiring urgency rubric

Want to learn more about how ChatterWorks can power your hiring mix? Book a demo and see us in action!

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