10 Reasons Tech Startups Shouldn’t Use Recruiting Agencies

Hey, I’m Chris. I wrote this article and I’m also the founder and Editor of DailyTekk. Lets connect on Twitter, Instagram, Snapchat and YouTube. Check back daily!

Editor’s Note: This guest post was written by John Dennehy, founder and CEO of Zartis.com, a site that helps companies find and hire great people without using recruitment agencies.

I’ve been a founder or co-founder in tech startups for the past 13 years. I’ve hired over 100 people in that time. I’ve hired a recruitment agency once; we were desperate and needed the talent. I’ve been to a recruitment agency twice; I was desperate and I needed the money.

My first time at a recruitment agency was in Sydney in 1997. I told them about my dreams and aspirations and all the good things I had learned. After fifteen minutes I was asked to do a typing test. I walked out and found a job teaching HTML a day later. My second time was in Dublin in 1998. I had returned from Australia and in my meeting I told the recruitment agent that I wanted to work in Internet development. I’ll never forget her response: “The Internet. That’s a hobby, not a job.”

Based on those experiences as a candidate I did not become a big fan of recruiting agencies. A couple of years later I came to believe recruitment agencies offer an even less pleasant experience to an employer.

I got an email last week from a recruitment agency that “specializes” in Internet startups. They were proposing that if they help us recruit somebody on $50,000 they would charge us a mere $17,500. We charge our customers $9.95 per month to advertise up to 3 jobs. Their fee is equivalent to about 2,000 customers on that price plan for a month. That’s a lot of wonga.

Top 10 Reasons Tech Startups Shouldn’t Use Recruiting Agencies

  1. They are too expensive.
  2. Many don’t even bother vetting candidates.
  3. The best candidates would never use a recruitment agency.
  4. Unscruplous agencies will try to poach candidates back out of the company they placed them in. It’s a double dip win for them.
  5. Agents are essentially coin-ops. They get paid for placements. It’s the wrong motivator. Long term fit is of little concern.
  6. Most agencies couldn’t care tuppence about startups. They make the lions’ share of their money from lazy HR managers in big companies.
  7. There are plenty of great alternatives.
  8. 150 million professionals have their work details on LinkedIn. Go talk to them.
  9. Most agents don’t come from within the industry and usually can’t measure technical competency or culture fit.
  10. Employee referrals cost less and deliver a better class of candidate.

If you want to work for a startup think about this…going to an agency and getting placed in your dream job is going to cost the cash-strapped founders at least 15% of your annual salary. Bad start.

Even worse: walking into a new job, greetings your friends that work there and there’s a somebody in the background thinking he just paid a recruiter £10,000 for introducing you. Really bad start.

If you’re any good at what you do, do yourself and your future employer a favour: apply for a job directly. Try their web site. Connect with them on Twitter or LinkedIn. Make a phone call. Whatever it takes.


There are 2 comments. Comment?

  • Excellent article John, and I wholeheartedly agree.

    Our experience with recruiters was so similar at my company’s last startup that after that company was sold, we decided to create a solution — by startups for startups — that would remove the recruiter from the hiring process, and streamline everything else, to make it easy for SMBs to hire their next rockstar.

    There are recruiters out there who are a good fit for some companies, but many of them are extremely expensive. Plus, recruiters often solve our resume screening issue, but at a very steep price.

    Check us out at http://www.unrabble.com


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