As most second time Founders will know when you’re growing fast hiring great talent, quickly, can be one of the biggest challenges any scaling startup will face. And yet, hiring top talent is one of the keys to sustainable growth and healthy scaling.
According to research, almost 80% of your funding goes into the People function. But, considering such a large portion of funding is going into talent, the HR function can be an often overlooked department, with Founders squeezing every ounce of efficiency out of their marketing and sales activities, yet the HR and talent function can go years without optimisation.
As a startup or a scaleup, your most important assets are your people. And, as a growing startup, it is likely your talent function has not ‘matured’ (it couldn’t have, considering the business is still starting/scaling), and as a result it isn’t just costing you money – it is costing you time, too. On average, startup founders spend almost 40% of their time managing HR, payroll, and hiring tasks.
How do startups tackle these problems? Typically, they opt for one of the two solutions:
Solution 1: Hiring an internal recruiter
Solution 2: Working with a recruitment agency.
But there are pros and cons to both.
Hiring an internal recruiter can be expensive and time-consuming, and is only financially justifiable if you intend on hiring a significant number of roles for the foreseeable future; an Internal Recruiter is a long-term commitment so you either need the headcount growth, or employee turnover, to justify the hire.
Then there’s the time; If you are rapidly scaling, or at least want to – then taking up to six months to hire an internal recruiter and build up an entire talent function could not just cost you access to great talent, but market share and first mover advantage, too.
On the other end of the spectrum lies the idea of working with a recruitment agency. With an agency, you can speed up your hiring process, but that speed could come at the cost of candidates that are just relevant to your JD – only on paper.
Also, no one wants to rely on external agencies to hit their hiring goals; no transparency, loss of control…and 20% hiring fees!!!
This is where the embedded model presents a viable opportunity for fast growing companies who may want to increase their talent throughput, without making the long term commitment for an Internal Recruiter, as well as save a significant sum on agency fees.
The Embedded Talent Partner Model is an innovative approach that takes the best from both worlds. It helps you recruit at the speed and volume of a recruitment agency – and in bringing the same quality (sometimes better) candidates that an internal recruiter will bring in.
It is commonly referred to in the industry as Recruitment-as-a-Service, RaaS or RPO (Recruitment Process Outsourcing).
Read on to learn more about how an Embedded Talent Model is a good choice for startups.
The Problem with Agencies
Since hiring an internal recruiter can be time-consuming, and your deadlines simply might require a more urgent solution, companies turn to agencies for their recruiting.
But opting for recruitment agencies brings more problems than solutions. Most recruitment agencies charge a hefty 20% fee on the salary for every hire. That means whenever you hire a new candidate – you pay almost two months’ salary to the recruitment agency.
Because agencies get their recruiters engaged on multiple assignments – they are often working with multiple clients on very different roles – the overall quality of service becomes downgraded. By downgraded quality, we mean: a lack of proper communication, potentially inauthentic candidate representation, and a lack of focus on your highest priority roles.
And you can bet your bottom dollar if a recruiter has a candidate at offer stage, and you are just beginning you’re hiring process and the candidate is a perfect fit, they won’t put them through to you.
Layered on top of this, you lose control and transparency by relying on recruitment agencies for your headcount growth targets. You don’t get access to data of the candidates who were part of your talent pipeline. You also lose control over the entire process, ending up relying on external recruiters who are working across many clients to adequately pitch and entire the top 1% of candidates in the market to peak their interest and pursue your opportunity.
Another problem with recruitment agencies is that they send candidates to multiple employers. It not only limits the scope (location and skillset/experience) of the candidates’ companies receive, but also increases the candidate drop-off rate because they are already involved in multiple opportunities.
This isn’t new, candidates often are interviewing at several places at once…but should they really be put forward to these other companies by the very person you’re trusting your most important hires to? Surely not.
The Embedded Talent Partner Model does not have any of these problems. It takes the best from both worlds and helps you supercharge recruitment at scale.
The Embedded Talent Partner Model – and why is it better?
As the title explains, we “embed” our talent partners into your existing talent function. What differentiates our model from recruitment agencies is that we do not charge any commission on hires – it’s a flat fee model that, once a small amount of capacity is reached, generates significant savings.
But it isn’t just about the money – we hire truly great candidates, too. Because our TPs are part of your business, they will work closely with the hiring managers to deeply understand their requirements, and have a far better understanding about the role, requirements, as well as the mission and vision of the business.
Since the Embedded Talent Partners act as your internal talent function, you get a significantly improved service compared to agencies. They use your branding, including your email signatures when contacting candidates. They’ll also integrate into your ATS, allowing for a seamless integration between external partner and internal talent teams.
With such an engagement, startups have more control over the entire process – from sourcing to offer.
If you are growing your team and want to find out more about working with an Embedded Talent Partner, get in touch HERE.