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What’s Right for Your Early-Stage Startup: In-House Recruiting or Tech Recruiting Agency?

Will Reed | July 21, 2023| 4 min. read
Two birds flying

This article was originally published by Will Reed and does not necessarily reflect the perspective of Insight Partners. Insight Partners is an investor in Will Reed.

For an early-stage tech startup or other budding business, there’s nearly nothing more exciting than growth. When business is booming you get to really flex your muscles as a company, and run full speed ahead toward your biggest goals. But there’s something else that comes with growth: the urgent need for more team members (and fast). And for tech companies, two of the most common ways to really build an incredible team is with either an in-house recruiting agency or with a tech recruiting agency.

While top-tier candidates are certainly out there in the world, it might be more challenging to find them than you might initially think. According to LinkedIn, 70% of the global workforce is passively seeking jobs, while only 30% is actively looking. This means that tech companies almost certainly need to put efforts into recruiting talent, especially if they want to attract excellent candidates (and compete against larger, more established companies). So the real question isn’t “if” a company should recruit, but “how” it should recruit.

When choosing between an in-house recruiter and a tech recruiting agency for your business, there are many factors to consider, especially if you need to hire right now. Here’s how you can decide between building out your in-house recruiting efforts, or going with a tech recruiting agency to help your staffing needs.

What Does an In-House Recruiter Do?

Let’s start with the basics: what does an in-house recruiter even do? An in-house recruiter is a dedicated full-time employee whose sole focus is recruitment. They take ownership of all tasks related to recruiting and hiring perfect candidates for their organization. Their responsibilities might include meeting with hiring managers or department heads (to discuss hiring needs), crafting job descriptions, identifying and reaching out to potential candidates, and conducting the interview process. After new candidates are hired, recruiters might follow up after the onboarding process, to make sure that they’re situated and getting used to their new role.

What About a Tech Recruiting Agency?

Aside from an in-house recruiter, the second option for recruiting is working with a tech recruiting agency, which is an outsourced organization that manages recruitment and hiring specifically for tech companies. They typically have extensive tech industry connections and networks, databases of potential qualified candidates who are looking for tech roles, contacts at different organizations, and an in-depth knowledge of the needs of tech companies.

How Are They Similar?

On the surface, both recruiting methods have many similarities. Both in-house recruiting professionals and tech recruiting agencies assign recruitment to a specific person (or people) who take complete ownership of the process. Both recruiting methods also involve recruiters actively looking for candidates, instead of passively waiting for them to apply for roles. They also both use their expertise to thoroughly understand the positions they’re hiring for, in order to source and hire candidates who are a good match. This is a very important function of recruiters, considering that not having the “right team” is one of the top five reasons new businesses shut down.

It’s also important to mention that both methods of recruiting offer their own version of a “personal touch.” In-house recruiters are obviously intimately familiar with a company, its leadership, and its team structure, and they might even bump into the hiring manager at the water cooler. They can use this personal knowledge and closeness when executing the recruitment process, to carefully source candidates. While tech recruiting agencies are an outside company, they also typically gain in-depth knowledge about a company and its needs, in order to recruit incredible candidates. A tech recruiting agency should gain a deep and thorough understanding of a company’s needs and culture, so they can find candidates that fit.

What Are the Biggest Differences?

While the functions and ultimate goals of in-house recruiting professions and a tech recruiting agency are the same, there are some key differences between the two. First of all, bringing on an in-house recruiter (or recruiter) requires early-stage startups to set aside resources for a full-time hire. This means a salary, benefits, and hiring and training resources to get a recruiter up and running. For fast growing early-stage startups, it might not seem like a full-time recruiter is necessary just yet. A tech recruiting agency offers the same services, but on an in-demand basis, which might be better suited for an early-stage startups needs.

Growing companies also have other considerations that founders are often mindful of. When growth happens, it can be fast and unexpected, meaning that hiring new talent becomes an urgent need. While it can take time to build out your new in-house recruiter, a tech recruiting agency is already established, and should have extensive talent networks that it can typically tap into quickly. In recruiting, having a network of candidates and partners is crucial for ultimately filling roles, and it makes a difference in the process.

Lastly, in-house recruiters often rely on a company’s brand to fill positions. If your company is still growing, your brand might not yet be the heavy-hitter that it’s destined to be, and this could impact your recruiting efforts. On the other hand, tech recruiting agencies have their own brand strength and presence to lean on, and can use that to help attract top candidates.

How Can You Pick What’s Right for You?

In order to decide which recruiting method is right for you and your business, here are some questions you can ask yourself to assess your position.

Do we want to bring on a full-time recruiter?

Some companies want and need the talents of a full-time recruiter. This is likely you if your company has the resources to spend on a salaried recruiter, the time to onboard and train them, and the volume of hiring that would call for the long-term services of a full-time in-house recruiter.

Are we growing quickly?

Speedy growth means there’s likely a need for speedy solutions. If your company is growing quickly, a tech recruiting agency might offer you faster solutions to your staffing needs. They already have networks in place, they know the tech industry, and they know time is of the essence. This might be especially important to consider when it comes to early-stage startups, who can’t afford to leave key positions vacant during bursts of growth. Bringing on a full-time recruiter takes time and resources, which both might be in short supply.

How will our in-house recruiter build a network?

Recruiters need networks to find top talent, and while it’s possible to fill roles without an extensive network, it can be more of an uphill battle (especially in the beginning). Leaders can tap into their own executive networks to help build connections for their new in-house recruiter, and get candidate references from their staff to start building out a database. And remember, that when selecting a tech recruiting agency, they already should have an excellent recruiting network in place, and connections with candidates and other startups..

How strong is our brand?

Early-stage startups can be in a tricky position, because they’re a company with a ton of potential and possibility, but they might not be able to lean on their brand just yet when it comes to hiring. If you’re a company no one has heard of, why would a candidate choose you instead of your flashy, larger competitor? Even hiring managers know that brand matters, with 75% of them saying it’s easier to attract a candidate who recognizes an organization beforehand.

Tech recruiting agencies can help bridge that divide. They act as a reputable liaison to help bring in the strongest candidates.


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