Building Talented Teams: Choosing to Keep it Internal

For rapidly growing companies, hiring is a critical, resource-intensive responsibility. Whether you are company of founders looking to build your team out, or a 400-strong entity seeking to hire specialty roles, your recruiting process can make or break the livelihood of your company.

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How should your company execute its hiring plan? When should you use your precious internal capacity, and when should you seek external support?

We put that question to external recruiters, HR consultants and heads of Talent.

Here in Part 1, we’ll focus on when and how a company might use its internal capacity to conduct a successful hiring process.

When should you keep it internal?

The general rule of thumb seems to be: use internal recruiting as much as you possibly can, at every step of the recruiting value chain.

Here’s why:

1. Soliciting Interviews and Designing the Process: Internal recruiters deeply and intuitively understand your company’s people needs as well as its broader strategic goals. They are committed to these every work day, more than any external recruiter can claim. As such, they are best positioned to design an interview process that truly reflects your company’s values and strategy. Equally, they can best assess whether the choice to interview or the language used to describe advertised positions aligns with your company’s values.
2. Conducting the Interviews and Communicating with Candidates: Just as crucial is the task of communicating your company’s identity and value to a prospective employee. As Shelly Duong from Mochi HR Consulting said, “internal recruiters best represent the company and the culture [to prospective employees].” Keeping in mind the fact that a candidate is interviewing your company just as you are interviewing the candidate, using your people, who can best communicate and embody the company’s ethos, to interview can be key.
3. Negotiating with Potential Employees: Granted, there is value in having a third-party objectively present to negotiate an offer package. But this value rarely supersedes that of a team member articulating why a candidate should join your team. By removing one link in the negotiation chain, it allows the candidate and the negotiator to flexibly (and inexpensively) respond to counters or adjust the offer package as necessary.

Why else might you choose to use internal capacity?

When internal capacity is not exhausted:

As with most young companies, maintaining a small employee headcount, including a People/Talent team, is essential for survival at the early stages. How should you balance this consideration with the desire to use only internal capacity for your hiring?

• Rule of Thumb #1: The maximum capacity an internal recruiter can handle is about 10–15 active job descriptions per recruiter (managing recruiting responsibilities full-time). Anything beyond this number typically becomes unwieldy and should therefore be outsourced to external recruiting firms. Failing to do this might risk a drop off in quality of recruiting.

When recruiting for non-senior roles:

• For recruiting senior roles, the demands are such that the process might need to be confidential, technical or demanding beyond the internal team’s competency, or might require access to niche networks of executive candidates. In such cases, relying on external search firms is likely a better course of action.
• Given this point, prioritize using internal capacity to conduct searches for positions other than director or senior executive roles.

In times of slow employee growth (short to mid-term):

• Rule of Thumb #2: Use internal capacity if you have conservative growth plans in the short to medium term. If your company wishes to increase by greater than 50 employees in a 12 to 18-month period, you would need at least one internal employee dedicated full-time to recruiting, perhaps more.

How should you utilize your internal recruiting team most effectively?

Ideally, everyone in your company should be involved in the recruiting effort in some way:

• Recruiting the best talent is of direct strategic value to any company, especially smaller growing companies. Some teammates can participate directly, while others can do so indirectly, such as by recommending candidates, preparing recruiting material, or creating a welcoming interviewing environment.
• Directly, even the founders/CEO should pitch in on the recruiting effort. As Will Champagne, an executive recruiter with Ivy Scale noted: “at least 10–20% of every founder’s time should be spent on recruiting.”
• Indirectly, coworkers should be involved in the process, by referrals or creating a welcoming interviewing environment. As Sebastyan Zaborowski, the Director of Field Operations at Semmle, said, if your employees aren’t inviting their friends and personal networks to apply for open positions, that might reflect their generally negative feelings about your company.

Do not spend too much time burning internal resources before moving to an external recruiter

• Limit the amount of time you give your team to determine whether it can conduct a successful search internally. Give your staff about 2–3 weeks to search in the market, after which they should determine if they’d need external help
• If internal capacity is limited, you can pursue a number of hybrid internal-external arrangements:
• Alternative 1: Pairing limited internal capacity with the work of research firms that map the market and find a list of candidates based on your criteria. These can be valuable support for a fraction of the price of a recruiter: some foreign research firms can cost as little as $20/hour.
• Alternative 2: Employing a part-time recruiter who works for half of her time can alleviate the burden on your team.

Ultimately, relying on your internal recruiting capacity to build your team best positions your company for long-term success. “[N]o matter what your stage, about 80% of the roles in your company should be filled by internal capacity…doing something so key or strategic to your company should not be done by someone that doesn’t care about the outcome as much as you would.”- Will Champagne, Ivy Scale.

When should the so-called “20%” of external recruiting support come into play for your company? Part 2 will reveal the answers.

Want some help asking the right questions to help your business to succeed? Get in touch with our experienced team at Octopus Ventures.