The best recruitment set-up as you scale
When it comes to recruitment, there is no “one size fits all” solution. As companies scale, it is important that they consider various options in order to find the optimal recruitment function at each stage of maturation.
With 9 years of experience helping companies to solve complex talent challenges, we believe that there are 3 optimal recruitment models:
- Hiring Manager-led (for <10 hires / annum)
- HR Generalist (for 10-20 hires / annum)
- In-house Recruitment (for 20+ hires / annum)
This article explores the pros and cons of each of the models and gives insight into how to set your recruitment up for success.
1. Hiring Manager Led
For low volumes of hiring (< 10 / annum) and early stage start-ups
It’s hard to justify the expense of central recruitment support for companies hiring under 10 people in a year. Instead we’ve found that it’s best to devolve responsibility to individual Hiring Managers. They take responsibility for every hire they make, advertising roles, reviewing inbound applications and engaging agencies where they need support.
In our view, this is the optimal model for low volumes of hiring (< 10 / annum) and start-ups that are changing rapidly.
Pros - Due to the low volumes of hiring, Hiring Managers can take on responsibility as part of a varied role and it’s cost effective because, ideally they’ll be able to do their recruitment directly but, even if they can’t, agency fees will be low due to the hiring volume.
Cons - This model isn’t very scalable. As more people are hired, the company can start to struggle with a lack of central control. It’s difficult to have consistent processes, data and reporting and often agency fees start to increase dramatically. It can also become very time consuming for Hiring Managers and does not play to their core skill set.
This model is seen a lot in very established businesses where they rely on Hiring Managers to bring in contacts that they already know in the industry. Referrals should always be encouraged in every hiring process but not relied upon as it is almost impossible to build a diverse company this way.
2. Generalist HR
For companies who have a small HR function and make 10-20 hires a year
Companies hiring 10-20 people in a year are likely to already have an HR or People team responsible for the full range of personnel issues from payroll to L&D. A member of this team can take responsibility for advertising roles, screening initial applications and operating a central Preferred Supplier List of agencies.
Pros - If the team member is engaged with the topic then they can effect change to improve processes, bring in technology (particularly an Applicant Tracking System or ATS) and control. This will save hiring managers’ time and enable a better overview on budget.
Cons - If hiring volumes get too high and pressure increases then there is a risk that the speed of hire will slow and agency fees could spiral.
Do be careful, we often see companies using this model and making over half of their hires with agencies. This leads to spiralling costs as you scale and a lack of control over key strategic issues like diversity. Another challenge with this model, even at lower volumes, is that companies can struggle to build a strong employer brand when working through agencies. When you have recruitment agencies as the main channel of communication to prospective employees you often lose control of the message and the candidate experience.
3. In-house Recruitment
For companies making 20+ hires / annum
Any company that has reached scale in their recruitment should consider building an in-house recruitment function. This is what we specialise in at Instant Impact.
As recruitment technology has become more affordable and candidates have become easier to reach due to job boards and huge networks like LinkedIn, it's become more realistic for smaller companies to be successful at building in-house teams - we’d recommend this approach when you’re making 20+ hires a year although you can start to consider it before then if there’s a good business case.
Using this model will provide you with control over your process, data and key metrics such as speed of hire, quality of hire and candidate experience.
As well as high quality advertising, you will have the internal capability to search for and approach top talent directly for your roles using tools like LinkedIn. This should allow you to place at least 80% of your roles directly, reducing agency spend on all of your core hiring and only using agencies on very specific or senior (C-suite) roles.
If the in-house recruiter or recruiters are well managed and have the right level of expertise, they should also be able to deliver strategic improvements such as improving your employer brand or diversity.
The structure is highly scalable. As you start to recruit more people, you can add to the team to ensure that the quality of delivery remains as you grow.
The right recruiters:
Most businesses make a wide range of different hires from developers to operations and finance to marketing. As a result, you need recruiters who have the agility to support you in all of those areas.
When hiring in-house recruiters you need to look for someone who is happy to spend a lot of time on the phone and has the work ethic and influencing skills of an agency recruiter, whilst also being aligned to the culture, values and vision of your business.
You need to look for the rare recruiter who is commercial enough to understand what your company needs now and, in the future, and who is tough enough to stand up to hiring managers when they don’t follow the process.
Recruitment is a specialist skill set and the team needs to be well managed and motivated to deliver the results that you want. This is easy if you have a large team delivering 100s of hires because you can have a specialist Head of Recruitment reporting into your HR Director who can manage the team and provide the strategic direction that they need. But that’s more challenging at lower volumes:
- Your HR Director / Head of Talent may have experience leading hiring processes so they could manage the function;
- You may be forecasting massive growth in which case your first recruitment hire could be a senior person with the capability of growing into a Head of Recruitment role and therefore the ability to report into your HR Director from day one; or,
- You may need to look externally for that capability
If your recruitment is very volatile with peaks and troughs or you find it difficult to forecast your hiring, you’re going to need flexibility in your recruitment function. There are a few options to deal with this challenge:
- Build a team do deliver the hiring that you’re certain of and use agencies or extra capacity from your HR function for the peaks;
- You can have a team that can deal with the peaks and have a plan for how to use their capacity elsewhere when there’s no recruitment ongoing; or,
- You can look at contractors as long as you’re careful to ensure continuity of experience for your different teams.
- Maintain a ‘bench’ of talent ready to join your talent team at short notice for bursts of time. This is the method that we use at Instant Impact.
It’s key that you have the right infrastructure to support the team. They need Marketing, Technology and Expertise to enable them to succeed.