- Agency fees are a percentage of salary, so the cost grows with every hire.
- An in-house recruiter is a fixed cost, plus tools and management time.
- Embedded recruiting is a flat monthly fee that covers several roles at once.
The starting point
A typical Series A company plans to make 8 to 15 hires over the next year. The founders are still running hiring. There is no recruiting team. Three options come up every time.
Option 1. A recruitment agency
Most agencies work on contingency. You pay nothing until someone is hired, then you pay a fee based on that person's first-year salary. Fees are commonly between 15 and 25 percent, and sometimes higher for senior or technical roles.
Here is how that adds up. Five hires at an average salary of $150,000 USD, at a 20 percent fee, comes to $150,000 USD in fees.
Works well when you have one or two hard roles and no time to run them yourself.
Watch for costs that climb with every hire, recruiters who never learn your product, and several agencies sending you the same candidates.
Option 2. An in-house recruiter
You hire a full-time recruiter onto your team. The cost is a full salary and benefits, plus an applicant tracking system, sourcing tools, and time from a manager who may never have managed recruiting. A new recruiter also needs time to ramp up.
Works well when hiring is steady and permanent, usually 15 or more hires a year with no end in sight.
Watch for a fixed cost that is hard to scale down if hiring slows.
Option 3. Embedded recruiting
An embedded recruiter works inside your team, in your Slack and your applicant tracking system, on a flat monthly fee. They cover several roles at once and work like a member of your team.
Works well when you have a burst of hiring over 6 to 12 months and no recruiting team yet.
Watch for an initial term, and the time it still needs from your hiring managers. It is also more than you need for a single hire.
A simple way to choose
| Your next 12 months | Usually the best fit |
|---|---|
| 1 or 2 hires | An agency, for those specific roles |
| 3 to 15 hires | Embedded recruiting |
| 15 or more, ongoing | An in-house recruiter, often with embedded support while you hire one |
Questions to ask before you sign
- What is the total cost if we make five hires? Ten?
- Who will do the work day to day?
- Whose systems will the candidate data live in?
- How often will we get a written update?
- How do we end the arrangement, and what do we keep?
Planning a hiring push?
We become your recruiter for as long as you need one, on a flat monthly fee.