It’s no surprise that making the companies’ strategic decisions always depends on the CEO, and these tasks are always aplenty. After you’ve set up your internal processes and made a plan to follow, you may have another problem that comes when a company grows — you will need to expand the team proportionally to tackle the increasing amount of incoming tasks. If you have a recruitment department that does great work, then you’ve got nothing to worry about. But what if you have an understaffed hiring team or prefer to be personally involved in a candidate’s selection process?
I won’t advise you a platitude like “hire recruiters — it’s their job to take care of the employment process” because it could pose a hell of a problem, especially if your budget is limited or you can’t spend too much time on drafting goals; you need someone who is qualified enough to get the job done as soon as possible. I’ve made my career on helping companies solve this ultimate issue, and, based on my experience, I’d like to highlight three of the most effective approaches to getting great hires for your business without spending too much time finding proper recruiters.
The first thing that comes to mind is turning to a recruitment agency for help. Professional headhunters do their magic, and voilà, you have a candidate according to your requirements. Rightfully so, their expertise and market knowledge could lead to a proper candidate choice and save some time. You are free to decide whether you want to join and monitor the selection process or just conduct final interviews with the most promising applicants. Of course, you can’t know all the nuances, like how to approach each candidate in the best possible way, so just leave all the dirty work to the pros. This “external recruitment department” may be a very useful thing, especially for younger startups.
There are two types of firms: staffing agencies (SA) and recruitment agencies (RA) that may look like each other’s clones, but this is a fallacy.
Staffing agencies are suitable for less qualified occupations and usually, fill temporary positions. Because they’re mainly focused on this type of job, staffing agencies don’t immerse themselves in the company’s culture. On the same note, recruitment agencies tend to only work with high-profile candidates and act according to corporate needs. Unlike staffing agencies, recruiters from RA don’t usually pull out workers from existing pools, so, if you are going to use their services, be ready to pay for the quality.
Actually, in the case of top-rated firms, you contact them twice: the day you set the requirements and the day they give you an applicant. All the interim stages won’t be your headache. The big advantage is that they know how to reach talented candidates that are not directly looking for a job at the moment, being in a so to speak “invisible mode,” and get them interested in the position, even if your company is not very well-known. Those who wish to become the applicants are their clients as well, and the agencies know how to handle the selection process to choose only the best of the best.
This approach is not all roses and can greatly affect your business decisions. Recruitment firms have a rather complex system of fees and can sometimes be costly. Your payment can depend on how involved the firm is, which compensation an employee will get, the industry (some areas are notorious for skill shortages), and, rarely, location. Typically, the number is between 10 and 20% of candidate’s first annual salary.
For example, for a junior developer in Germany with an
average salary of €46,800 ($53,000), you will pay around €4,680 ($5,300) per hire. But in some cases, the fee can be increased by up to 30% if the position is hard to fill or requires headhunting a very high-profile expert.
The duration of a contract, whether it’s a temporary or permanent role, is another major factor to affect the amount and structure of the final payment. With this in mind, it’s important to consider all of the terms and conditions beforehand to make sure you’re getting the best price for agencies’ services.
Another aspect is that they provide you with a limited amount of job-seekers. After reaching a fixed quota, you have to renegotiate the existing contract to get more candidates. So, from time to time, they can abuse this condition and send you unskilled applicants for the sake of filling this quota faster and rewrite the agreement earlier.
The typical outstaffing company performs tasks similar to a recruitment agency with one key difference. When it finds an appropriate candidate, he or she becomes company’s member and part of your in-house team at the same time. This worker is sort of “rented” and can be regarded as a remote employee.
For the sake of convenience, I will simply call it an “R&D department”. On the bright side, long-term support, increased efficiency in certain fields, and reduced expenses are the key components of this approach that make it great. There is no need for you to address secondary functions such as official employment, coworking space, taxation, and insurance of the cadre.
Once you get your development team, it becomes an integral part of your company’s structure, but the employees are located in another country or state. Still, you remain in full control over your remote team and, in case of a reliable company, can absolutely be sure that the hired staff devotes its time exclusively to your project. Because there are quite a few similar offers on the market, there are times when companies provide you with a developer’s CV who, in fact, will not work on your project. Or worse, they lie about his/her skills or experience.
To avoid this confusion, you should be careful when choosing an outstaffing company and consider a lot of parameters such as clients and their feedback, project duration, what the process implies, etc. As you may notice, I work in this field as well, and these hiring issues worry me more than you can imagine. That’s why I experimented a lot to come up with a pretty unique cooperation model that eliminates hiring and management issues and allows for building a professional team where every employee will have a personal contract and be focused exclusively on the client’s project.
However, typically companies don’t provide management services or give any guarantees about the devs’ quality though. Therefore, it becomes even more important to be in constant contact with the team — well-made assignments and monitoring will be your best QA for the project.
Keep in mind that you will need someone who can represent your interests: it may be you, your employee, or an outer manager who will take care of the whole project. But if you want to do it yourself, then be sure that there’s enough managing skills, if not — better delegate it to pros who do it on a full-time basis.
By choosing this approach, you become a headhunter for a brief period of time. It’s a bold decision; not everyone is able to perform this role, so I already like you. It is the cheapest solution to the problem because you don’t have to pay any associated fees to middlemen, so the contact between you and the candidate is very straightforward and simple. Sounds easy, but you still have to find such a person and persuade him/her to join you.
It can become a tall task, especially if all you have is a job description. Even if you post your vacancy at every job site and search through every available resume, still, you need to promote your vacancy first. Advertising requires expertise and if there’s none, then you will need to be consulted by pros, which will cost you a pretty penny. In that case, the idea of a cheap hire is ruined before the trial period. Unfortunately, searching in Google and hoping for the best won’t help either — I can’t recall a single case of this method paying off. Sounds more like a dead-end rather than a solution to me.
Another obstacle is that a bad hire will poorly affect your reputation in the company. When someone new joins a team, the crew’s assessment of the newbie goes farther than you probably imagined and can damage the credibility of those on top. The new member should possess a good skill set and be seen as a reflection of those who appointed him or her. The employee is expected to add value to the team, and the inability to do so may lead to a negative image of the management decisions and behind-the-back conversations.
To avoid this fate, you should know your candidate beforehand. Otherwise, it becomes a very tedious and risky venture, especially when you start taking care of all the additional tasks like the official employment of your future employee, tax and insurance provisions. And don’t forget that all transitional stages are added to the list, so getting a new team member is a grueling, monotonous, and very time-consuming affair.
So, now you’re now fully equipped with the basics to get your ideal development team going.
Just like anything in this life, there’s no such thing as a safe bet. But you can be aware of the common pros and cons when making a crucial hiring choice:
- Recruitment agencies provide you with a set of vetted candidates to choose from but typically don’t focus on hiring procedures. Also, the fees associated with their services can be overwhelming and complex.
- An outstaffing company provides you with a well-oiled team member and addresses all collateral functions. Keep in mind that it’s not the cheapest choice but is more affordable than hiring local talent in your office. You will also need to have some experience in managing a remote team or hire an executive for that matter.
- A manual search looks like the most intuitive solution among the three, but, in fact, is the most challenging one. It doesn’t offer such a variety of employees and, on top of that, every stage of a hiring process becomes your responsibility.
As always, the final decision is always yours. It should be formed around multiple factors including price, market state, local talent pool, and time gaps. Based on my experience, smaller companies tend to use recruitment agencies and a manual search; meanwhile, mid-to-large firms look more towards outstaffing services.