Why Traditional Recruitment Agencies Are Failing Startups
Startups move fast. Why are traditional agencies getting it wrong?
1. Too Transactional
It’s no secret that agencies want volume. More volume naturally leads to more chances of placements and therefore fees. As Wayne Gretzky once said, ‘you miss 100% of the shots you don’t take’ - right? This mindset encourages shot-taking over the accuracy of the shots themselves.
Optimising for fit at the expense of volume is perceived to be inefficient at the agency layer. What people fail to realise however, is that optimising for technical and cultural fit actually does the opposite. Less volume = more time. More time = going deeper into understanding underlying motivations. Understanding those motivations leads to higher engagement and pass rates at the interview stages and directly maximises for earning the fee.
2. ‘One Size Fits All’ Advertising
Relying on advertising and direct applications is increasingly becoming a thing of the past. I can probably write a whole blog dedicated to this dying art. Of course, if your brand is well recognised or you’re an Internet giant, you can push out the advert, sit back and watch quality applications fall into your inbox.
But what about start-ups? What if your branding or value proposition is in it’s infancy? In these cases, curating highly thought-through, personal and culture relevant job adverts can make a world of difference. Unfortunately, just like the point before, it doesn’t optimise for earning a fee, and therefore traditional agencies often throw a poorly taken spec into the mincer and find a barely passable version to start advertising on every job board under the sun. If you expect this to yield results, or don’t immediately see the problem - reach out and lets chat.
3. Neglecting Founder Involvement
Traditional agencies are increasingly sidelining founders from the process. Founders need tight timelines, not endless interviews. If one optimises for volume, the Founder naturally won’t be able to keep up and involve other team members to do the very important role of taking charge of the first few pivotal hires. When the proverbial finger is taken off the pulse in this manner, it disadvantages everyone involved.
4. Overuse of Tools, Underuse of Judgement
Modern ATS and AI tools may do a decent job at parsing a CV, but they leave so much on the table. Attitude, resilience, startup grit, commitment and much much more. Tools screen out disruptors. I can’t tell you how many times in my career, my ATS gave a low match score to a CV based on rudimentary key-word matching, for me to then ending up hiring absolute game-changing talent.
Sometimes it’s the weird things, sometimes it’s deliberate hidden sentences in a CV aimed to see if the applicants CV is truly being read that tell you so much about a person.
5. Fundamental gaps in knowledge
Whether it’s sourcing methods, proper screening or the ability to pitch effectively - gaps in skillset can be damaging to founders who are relying on agency partners. How do you know if the recruitment agency you’ve signed up has a decent understanding of what great looks? Do you ask this question when you’re evaluating who to go with?
Here’s a thought experiment you ought to try next time you’re on a call with an agency or internal recruiter. Ask them the following questions
What does a great candidate look like in terms of X (software engineering, product design, product management, AI Research). Are they able to give you an answer that will convince you that they’re the person for the job?
How do you source and engage the top 1, 5, 10% of talent? What is a difference between hiring the top 1% and the top 20%?
Pitch me a client you’re currently working with. Assume I’m a candidate that doesn’t know them and this is your chance to give me a first impression. Listen carefully to how they pitch - do you feel energised afterwards? Would you apply or agree to interview based on what you heard?
How do you handle objections? If someone’s salary expectations are slightly higher than what’s on offer, what do you do?
If you’re speaking with recruiters that have a specialism (i.e. Javascript Recruiter or Machine Learning Recruiter) ask them at the most fundamental level to explain what they think Javascript or Machine Learning is. You’d be absolutely amazed at 95% of responses you get. I personally used these questions when hiring for my own teams in the past and it's a great way to see through the facade, quickly.
What Founders Should look for instead
1. Reputable Recruiters Who Understand Startups
Ideally they have recommendations on their LinkedIn profile from the kinds of people you’re looking to hire, being hired into the types of companies that operate at your stage of growth. If they don’t have those, ask them for references of clients in similar stages of growth or other Founders / CTO’s / Engineering Leaders that can vouch for their ability to hire and understand start-ups.
2. Do some research on your suppliers before engaging them
Traditional agencies are struggling to onboard start-ups. They supplement this loss but hanging on to corporate clients that hire 1000’s of people per quarter. Brick and mortar business, banks (not the fintech types), government agencies, big 4 corporate firms and the like. This is not the type of company you should engage to try and secure world-class talent for you. No matter how appealing their pitch may be, how many employees they may be able to dedicate to your needs or how low their fees may appear. You’ll pay dearly - one way or another.
3. Consider solopreneurs or small agencies.
Most of the great recruiters I know, have opted to set-up on their own. They’ve taken decades of learning (both agency and in-house) and are building specifically for founder led companies. They understand it. They can’t work on 100’s of jobs at once, and are very picky with who they onboard. Their reputation is directly on the line and they have real skin in the game to make the partnership work. I’d rather have 2 of these types, then 50 recruiters from a large recruitment agency. I know that my reputation will be safer in their hands, I know that I’ll receive quality from them and they’ll put blood, sweat and tears into making sure they get it right.
Look out for the following signal - you’ll know you’re speaking to the right people if they ask really hard questions. If you find yourself being asked tough, close to home questions and you find yourself scratching your head to come up with answers - you’re most likely in safe hands.
That’s a wrap from me folks 👋
If you’d like to explore options on how we can potentially help you, take a look at our Services page and see if anything there tickles your fancy. Until next time.
