Understanding what the recruitment function should look like can be a tough question at each business stage. Based on my experience recruiting for tech product teams ranging from 5 to 500 people, I provide insights to help founders. I hope this map format will assist you in the decision-making process.
The first and most important consideration, regardless of the business stage, is the budget.
Your main goal is to hire as quickly as possible so that the new hire can start generating revenue for the business. Vacancies that remain unfilled for a month or more are not in our interest.
When calculating ROI, I advise analyzing business needs and realities:
- How difficult is this role? Does the founder have the necessary network, and does the recruiter have enough experience? This determines the real time to hire, rather than relying solely on market analysis figures.
- When do we need this person on board due to business needs? Does the time to hire align with our needs?
For example, you are looking for a Software Engineer with a rare tech stack. This role is crucial for the product, so you need to fill it ASAP, ideally within a few weeks. However, if the founder and the internal recruiter do not have a network of such engineers, they will need to start from scratch: sourcing and attracting candidates. This process will already take a minimum of one month.
Include the risk of selecting the wrong candidate, which could lead to repeating the search and incurring the same expenses. During these 1–2 months without this person, the business loses potential revenue.
From my experience, this situation can persist for months, regardless of the market conditions.
This example demonstrates that a thorough internal analysis can highlight the most ROI-effective decision:
- Outsourcing this position to fill it within a few weeks and keep the business running smoothly.
- Forming the candidate profile with an experienced software engineer and inviting them to analyze CVs and conduct final interviews.
- Outsourcing the sourcing part to work with an already relevant list of candidates.
- Inviting an experienced recruiter to analyze whether this position can realistically be filled, assess how many candidates are available in the market, and explore alternative options if it’s impossible to fill.
- Asking recruitment influencers for direct recommendations.
All these options vary in cost, but they are more reasonable than continuing to do it on your own without results and losing budget.
To understand what to do with the recruitment function at different stages, I propose the following straightforward and verified statements.
MVP/Early stage
The founder hires on their own. You can get the consultation on:
- An experienced recruiter to form the right candidate persona, offer, sourcing strategy, and analytics.
- An experienced HR professional to describe the EVP, key team roles, onboarding, and retention processes.
- An organizational development expert to work with co-founders on business shares, exit rules, and other legal and financial aspects.
Outsourcing filling the positions would be a good option if it is cost-effective for the founder.
Early (first investments) stage, or building the core team
This means you need to hire 4–10 people at once, not per month. If you already have an in-house recruiter or HR/Recruitment manager, they can cover this request. My only advice is to prioritize the most critical positions and consider giving these to an agency/recruiter with relevant experience.
Additionally, at this stage, it works well to get additional consultation for onboarding and retention to ensure higher retention rates. Also, invite seasoned experts (CTO, CMO, COO, etc.) to conduct final interviews.
Growth stage
You have streamlined positions to fill every month or quarter (for example, hiring 5 Java developers) and tough positions (some during the year), like Solution Architect, COO, Head of Partnerships, etc.
The normal capacity for in-house recruiters is 3 streamlined positions and 1 tough position. For the tough positions, the team would need extra help due to the difficult search process. C-level roles are still better to outsource from time to time to a trusted agency.
Recruitment and HR functions should ideally develop in parallel.
If the recruiter's capacity is 5 streamlined vacancies per month, they can also be responsible for onboarding and retention.
If the number of vacancies exceeds 5-10 and the company is growing, it is better for the recruiter to focus solely on recruitment tasks, while onboarding and retention should be handled by a separate HR manager. When your team has 50 people for an extended period, having a recruiter and an HR Business Partner should suffice.
If your team grows beyond 50 people and is expanding to 100 or more, you would benefit from having a Head of Talent and an HR Business Partner. They can manage ongoing recruitment while still outsourcing C-level or other specialized hires to an agency.
To conclude, I advise seeking recruitment experts if you have specific tasks or are unsure of what to do. Recruitment isn’t usually easy, and as a founder, it’s perfectly fine to need extra help.
