When does it make sense to use a recruiter for hiring engineers?
Published in Hiring, Startups.
Recruiters have a bad reputation, especially for spamming.
I get a lot of emails with unsolicited CVs. Whenever I’ve posted a job ad online, I know to expect that volume to increase. At least they’re helping train my spam filters when I click the “Spam” button!
This kind of behaviour means their reputation is well deserved. The problem seems to be that in almost every case, recruiters have completely misaligned incentives when it comes to finding you good candidates:
- Success fee based recruiters are incentivised to place someone as quickly as possible and have no stake in the long term outcome of the candidate. Although they all have “refund” periods where you get your fee back if the candidate leaves after a certain period of time, the length of time is usually insufficient to properly judge whether someone is a good fit unless they crash out very quickly.
Even if the refund period applies, they are then even less incentivised to find a good replacement because their profit margin quickly diminishes if they have to spend all the same effort again to get you more candidates.
That is also the case if you’re too picky. I’ve worked with a number of recruiters (all recommended through referrals) where activity tails off after a period. There’s always an initial burst of profiles but as you reject them, they lose interest. This highlights the lack of incentive to persevere and find those good candidates.
- Retainer based recruiters have the opposite incentive – to create a long process with no time pressure. They get paid regardless of the success of the project or whether the candidate stays with you or not. It can mean you get a more in-depth search, and is sometimes combined with a success fee, but there is still no incentive for them to place someone or put in more effort than the minimum. After-all, they still get paid.
The problem is that in both cases, the incentives are misaligned. You need a recruiter who 1) is looking for good candidates that fit your criteria; 2) who will find you someone who is good to work with; and 3) someone who will will stay with you for a long time.
There are always going to be exceptions, and no doubt the recruiter pitching you will claim they have a new and exciting approach that makes them different, but in reality the only way to match incentives is if they are working for you exclusively full time i.e. they’re an in-house recruiter.
This will be someone who really understands your company values, will work in the same office and probably sit next to the person they hire. They might not be an engineer themselves but they will want to work alongside someone good.
Of course, in-house recruiters are potentially expensive full time employees so aren’t necessarily appropriate for a small numbers of hires. They only really make sense for growing big teams.
A possible compromise is an contract recruiter who is working for you exclusive for a defined length of time e.g. 6-9 months. That person can get into the company culture and take the time to find the right candidates, but then leave once they have built the team.
They won’t be as bought into the success of the hires as a permanent member of your team but it gets close.
The advantage of using recruiters is they supposedly have good networks of people, although that is really only true for the top end executive search firms, if you’re looking for contract roles or for less skilled general administrative positions (not engineering).
The best engineers can pick and choose a small number of places they want to work at, so they don’t use recruiters. This means for hiring engineers, it’s really tricky to find a recruiter that will actually deliver.
Stay tuned for my next post on how to source engineering candidates without recruiters.