If you're running an early-stage startup, your world may feel overwhelming sometimes (or often). And when it comes to recruiting, the pain of having unfilled roles can be so severe, that many entrepreneurs ultimately cave in and hire a contingency-based recruiter that bills you (gasp 😲) a hefty fee of 20% of the first year's salary. I don't need to tell you that this fee is massive, but I'll note that hiring roles like this could literally slash months off your runway.

I have nothing against the contingency-based recruitment model, it makes sense for many industries, but it's not the best idea for lean, mean startups. The World has changed— sourcing talent is expressively more accessible and less complex than ever thanks to LinkedIn recruiting tools, databases, and outreach software. But most recruiting agencies are still holding on to fee structures created decades ago.

Strategy 1 - Hire a freelancer recruiter who charges you per hour and offer a small success fee.

An agreement where you pay only per success may sound like a non-risky way of doing things, but ultimately, the recruiter is taking on all of the risks from the engagement and charging you handsomely for it. If you hire a serious and dedicated recruiting freelancer on an hourly basis, that freelancer will source just for you. This model enables them to cast a wider net for you and ultimately find great candidates.

These freelancers are experienced recruiters that bill you anywhere between $40 to $80 per hour to source and walk candidates through your process. They can also take on part of the process, like the initial screening calls, or putting together your applicant tracking system. If you have multiple openings for the same role, this model becomes even more cost-effective as you'll be able to pick more than one hire from the pool of applicants sourced. Note, it’s a great idea to throw in a success incentive, but since you’re paying per hour, even $500 success per hire makes an impact.

This works beautifully. I’ve sourced and hired dozens of skilled professionals. On average we’ve seen 20 to 30 hours per hire.

You can easily find recruiting freelancers on upwork or other recruiter groups like this facebook group where recruiters hang out.

Strategy 2 - Hire an RPO (for growing needs)

The model described in Strategy 1 is catching on, I’ve seen at least one recruitment agency focusing on this fractional internal recruiter model. They refer to their space as RPO— recruitment process outsourcing. If you're starting to hire consistently you can look at Lucas James Partners in Chicago.

From my understanding, Lucas James Partners will only make sense if you are hiring a certain number of roles and doing it consistently.