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Startup Recruitment: Outsourced vs. In-house6 min read

August 6, 2019 4 min read


Startup Recruitment: Outsourced vs. In-house6 min read

Reading Time: 4 minutes

As a startup, should you keep recruitment in-house or outsource it? There is no clear answer to this question, but since both strategies have their own perks and shortcomings, it is important to assess the impact that each of them can bring in the long run.

startup founder

Every startup is created with the main objective of growing. And growing fast. This implies that recruitment plays a crucial role from the early days when the founding team is formed to the later hyper growth stages. Successful startups will reach a point when they will need a dedicated team to manage their recruitment efforts. But for the early-stage startups, that don’t have the resources (or the need) for a fully functional talent acquisition team the decision between keeping recruitment in-house or outsourcing can be a big dilemma.

Managing recruitment in-house will demand resources and focus from the management team while outsourcing can become quite expensive. In this article, we’ll highlight everything your startup needs to know before deciding which option is best.

Startup Recruitment is a Different Game

From the job posting to the interview process, startup hiring is a very unique field. Young startups cannot compete on salary, benefits, or brand. Therefore, your challenge hiring for a startup is to build a solid value proposition around your company vision and mission.

Successful hiring for startups starts with the right targeting. The goal is to attract people that can succeed in a startup environment. And this doesn’t mean being able to enjoy free snacks and yearly company retreats overseas. Startup reality requires a certain profile of people who feel comfortable wearing many hats and who can get things done.

With limited resources, startups can fall victim to lack of time and recruitment inexperience. That doesn’t mean recruitment should be avoided and outsourced. It’s one of the main challenges that startup founders and managers should embrace and master.

Outsourced vs. In-house Recruitment

When comparing hiring in-house to recruitment outsourcing, it is important to consider not only the financial costs but also factors like effort, time scarcity and required emotional energy.  Compared to outsourced recruitment, hiring in-house is generally cheaper on paper. However, it requires a significant time commitment from the hiring team. Recruitment outsourcing, on the other hand, will require close supervision of the recruiting agency or consultant.

In general, managing recruitment in-house is more likely to help you find someone who will be an ideal fit for your team. Being part of the company and immersed in its culture, you understand better than anyone else your company’s priorities and objectives. Communicating the ideal profile and company vision to a third party can be challenging and require time to calibrate.

The decision between outsourcing recruitment or maintaining it in-house is not merely financial, although the cost of recruitment is usually a determining factor in the case of startups.

The Benefits of Recruiting In-house

Before you kickstart your in-house recruiting efforts, consider who within your business will be involved in the process and how much time they can dedicate to the hiring activities. If you’re still not convinced your team can devote enough research and resources into recruitment, here are some additional benefits recruiting in-house can bring to your startup:

Build the team you need

It will always be easier for you to know the difference between the right and wrong candidate. You know your business better than anyone. You live, breathe and grow your startup. It is very likely that external recruiters won’t understand the operations and culture better than you. This means that to find the perfect fit for your startup, you are the right person to do it.

A better candidate experience

Every person involved in recruitment is also a salesperson. They have the responsibility to sell the job and your company to candidates. When the person conducting a job interview is also a team member, they can decide how to better communicate the role, sell the company and talk to the potential candidate. Keeping this process in-house will not only help your company attract the best people for the job but will also improve the onboarding process since the new employee will be more likely to understand the role they are required to perform. 

Keep it lean

Working with external recruiters means adding an extra layer of complexity in the recruitment process. This is the opposite of speed and simplicity which are part of the startup DNA. Keep recruiting lean and agile by structuring the process in-house.

Develop your skillset

Whether you are performing the recruitment tasks yourself or delegating them to someone else within your team, using an in-house resource for hiring candidates offers a new set of skills to your startup. Don’t expect your hiring needs to slow down anytime soon, so this set of skills can become an important asset in the long-run.

Tools You Need to Recruit In-house  

Recruitment is time-consuming. To recruit more efficiently, you can use recruitment tools that will help you simplify this process. There are several tools that can be used for in-house recruitment in different stages of the process. You can even build your own Applicant Tracking System using tools that are already part of your startup stack.

You can also get professional recruiting tools for free, like Atomic Hire. Atomic Hire was designed for startups. It offers a free plan that suits well the hiring needs of early-stage startups and a Pro plan for startups growing fast. With proprietary recruiting assessments for General Cognitive Ability and Personality, Atomic Hire presents an easy to use Kanban interface that can be easily integrated into your recruitment process. Try Atomic Hire for FREE.

Pro tip: Here is a directory of Job Description Templates and Interview Questions to get you started with in-house recruitment.

To Sum it Up

Before jumping into in-house recruiting or making the decision to outsource, do your homework. Understand the resources you have available and take into account how much recruitment will cost. Assess if you have an appropriate system set in place to help you recruit more efficiently and if you have the resources and commitment from your team to execute in-house recruitment for your startup.  

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