In-House Recruiter vs. Recruiting Agency: What's Right for Your Startup?

# In-House Recruiter vs. Recruiting Agency: What's Right for Your Startup?

As your startup grows, you'll face a critical decision: should you build internal recruiting capability or partner with external agencies? The right answer depends on your situation.

In-House Recruiting

### When It Makes Sense - Consistent, high-volume hiring (5+ roles per quarter) - Roles that require deep company knowledge - Long-term brand building - When you can attract recruiting talent

### The Costs - Salary: $80-150K+ for a good recruiter - Tools: ATS, sourcing tools, job boards ($10-30K/year) - Time: Ramp-up period of 2-3 months - Management: Requires attention and oversight

### The Benefits - Deep knowledge of your company and culture - Relationship building with candidates - Consistent employer brand messaging - Lower per-hire cost at scale

External Agencies

### When They Make Sense - Intermittent hiring needs - Specialized roles (executives, niche technical) - Urgent hires - Early stage without recruiting infrastructure - Roles where network access matters

### The Costs - Contingent: 20-25% of first-year salary - Retained: 30-35% of first-year salary - Embedded: $15-25K/month

### The Benefits - No fixed costs - Access to specialized networks - Speed (established pipelines) - Expertise in specific searches

The Hybrid Approach

Many startups use both: - In-house for consistent hiring needs - Agency for executive search - Agency for specialized/urgent roles - RPO for scale-up periods

How to Choose

### Ask Yourself - How many hires in the next 12 months? - How specialized are the roles? - Do we have management bandwidth? - What's our budget flexibility?

### General Guidelines - <10 hires/year: Agency makes sense - 10-30 hires/year: Consider first in-house recruiter - 30+ hires/year: Build internal team, use agency selectively

Working Well With Agencies

If you go the agency route: - Be responsive and decisive - Provide thorough briefs - Give honest feedback quickly - Build a relationship, not just transactions

The Bottom Line

There's no universal right answer. The best approach depends on your hiring velocity, role types, and organizational capacity. Many successful startups use a combination that evolves as they grow.