How to Partner With a Recruiting Agency

Working with recruiting agencies has always been a mixed bag, and there's no wonder they have a bad wrap across many hiring managers and in-house recruiting teams.

In this article, you'll learn what to look out for and how to identify the right recruiting partner for your company. In addition, we'll talk about how to set up your new partner up for success, so you get the hiring results you're hoping for.

My own experience

Before I jumped into the recruiting world, I was a hiring manager and people leader of distributed teams up to 150 people at companies like Shift, Lyft, and Rivian. I've had multiple experiences working with traditional staffing and recruiting firms like industry giants Aerotek and Randstad, and unfortunately, I had mixed results.

Namely, there were a handful challenges I faced when working with outside recruiters: communication gaps, communication infrequency, slow ramp-up on the roles and company, and low candidate quality.

In the end, we did end up hiring a handful of rockstars through the various engagements and buying out some of their contracts, but it was overall a bumpy, slow, and painful experience that definitely needed streamlining, which is one of the main reasons why we started OpenReq back in 2020.

Why should I use a recruiting agency?

There are multiple reasons why you should consider using a recruiting agency to assist with your hiring needs:

• Manage your cost basis- In-house recruiters, like any other employee on payroll, are a fixed cost for a company. Given the standard contract structures of agencies, they can be a strategic way to control your company's cost basis, especially if you foresee hiring tapering off in the near future.
• Place hard-to-fill roles - There are certain niche roles, especially leadership and executive, that tend to be more challenging to place. This is usually because the candidate pool is relatively small, and you'll need to explore multiple channels to find and engage with these candidates.
• Place volume-intensive roles - Some roles, like mid-level software engineers, are notoriously time-consuming to fill. This is not necessarily because the talent pool is small, but because response rates and interest are generally lower, and you'll need to do additional selling to make it seem like a compelling opportunity.
• Added expertise - Perhaps your current team doesn't have the past experience or knowledge hiring for a certain role, so it may be beneficial to work with an external partner to help guide them in the process.
• Save you and your team valuable time - Especially at smaller startups, the founders or hiring managers are typically leading the searches themselves in absence of an internal recruiting team. The time savings in itself has huge benefits, because quite frankly, up to 70% of recruiting is administrative work outside of when you're actually interviewing a candidate.

What to look for in a recruiting agency

You can avoid the challenges that I encountered in the past by considering the following aspects before signing on with an agency:

1. Specialization - Make sure to understand the agency's specialization or niche, whether it's a specific industry or role. There are agencies that specialize in technical talent for early-stage startups (like OpenReq) or even talent more broadly in a specific industry, such as EdTech, Robotics, or FinTech. This is important because it signals how much experience they have in a specific area. Be aware of those agencies that say "I have no specialty", unless they are larger agencies with many verticals.

2. Client History & Case Studies - Research what clients they've partnered with and the types of roles they've successfully placed. This is actual data to verify their specialization and experience and can also give you information of how well they've worked with hiring teams in the past.

3. Culture Match - This will give you an understanding of the agency's values and specifically how they work with hiring teams and candidates. This is crucial, because the agency partners will be the face of your company, and it's important for them to demonstrate your own company values in a positive light to your potential hires.

4. Strong References - When in doubt, ask for references to hiring managers they've partnered with or candidates that they've successfully placed. This can give you more certainty of their effectiveness as a recruiting partner and also give you a feel on what their standard is for the overall candidate experience.

5. Contract Structure - There are a few main contract structures: (a) contingent model, where you pay up to 25% of a candidate's first year salary upon successful placement with no payment required upfront, (b) contained or retained searches that ask for exclusivity on the role (meaning you cannot place the hire from any other source) and ask for a small % of the fee paid upfront, which is also based on a % of first year's salary, and (c) hourly or flat fee models that are pay-as-you-go and determined based on the number of recruiting hours allocated to the assigned roles.

Contingent is by far the most standard and frequent structure. One benefit is you don't pay the agency until someone is "butt-in-seat", but some of the cons are: (a) it can get expensive, especially if you're doing multiple searches at once and (b) you may not get as much commitment and time dedication from the agency unless they're prioritizing your search.

Contained or retained searches can be great because agencies will make a commitment to fill the role, so you'll get their full attention and resourcing to fill the role in a timely fashion.

Hourly or flat fee structures are typically more cost-friendly if you're hiring for a handful of roles. Not only is the cost-per-hire generally lower, but the cost is also steady and predictable, which is a plus for cash-flow and P&L management.

How to successfully work with an agency

Identifying the best recruiting partner for you is half the battle. The next step is making sure you get your money's worth and ultimately set them up for success to reach your business goals.

Most experienced agencies will have a dialed in process, but here are our general recommendations:

• Schedule an intake call with the hiring team - It's important to articulate your requirements and ideal candidate profile to your recruiting partner, especially if they aren't explicitly shared on the job description. This will help calibrate the search, so the agency can move a lot quicker.
• Share compensation bands - A recruiter must know the compensation bands of each role they're hiring for in order to screen out candidates who are well outside of the range and thus save a ton of time on both the hiring team's side and the candidate's side. This is typically done in the very first candidate phone screen given how important it is from their perspective.
• Ask for sample profiles - Sharing sample profiles could help further calibrate on the job requirements and also your own understanding of the ideal candidate profile. This can make sure your partner is on the right track before opening up the sourcing floodgates.
• Identify best communication channels and cadence - Figure out what channels and frequency is the right balance for you. This could be async updates via email or a dedicated Slack channel or could be weekly hiring syncs to check in with hiring progress and share live feedback on candidates or general process.
• Prepare to make trade-offs - This is an important factor to consider, because you may likely interview candidates that fit 90% of your ideal candidate profile but could have some missing skills that you were hoping for. We suggest force-ranking the requirements and determining if a requirement is a must-have or nice-to-have.

Conclusion

There are hundreds of thousands of recruiting agencies in the US alone, but leveraging this guide will help you achieve success with any recruiting agency. We hope you found this helpful, and please subscribe to our blog below if you found this resource helpful.

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