Welcome to Part 2 of our Organizational Structure series. In this post, we’ll be focusing on how to build and structure your Recruiting team.
Why Should You Hire a Recruiting Team?
In the early days of a company, your primary focus is proving out a viable product that customers want and building that product. While it’s easy to make the case to focus on increasing production and growing your customer base, it’s equally important to ensure the right people are in place to help you scale.
However, growing your team intentionally isn’t that simple. In addition to identifying and sourcing the type of top-notch talent you need, you must ensure that each of the subsequent hires both complements existing talent and represents a cultural fit for the organization you’re trying to shape.
Early on, much of this work can be done through the networks and referrals of the founding team, investors and early hires, but as your company grows in size, the need will quickly arise for more permanent recruiting resources. Without them, you’ll likely be unable to meet your hiring goals and acquire the talent you need.
When Should You Begin Hiring a Recruiting Team?
The exact timing of when to establish a Recruiting team varies based on your company’s needs, past success with founder-led hires, growth plans and whether you intend to leverage an agency as part of your overall hiring strategy. The key is knowing when your headcount growth will outpace your current team’s resources and capacity. Ways to measure this can include, how much time your founding team is spending on hiring (this shouldn’t exceed more than about 30% of their time), how many employees you currently have (typically in the 20-50 range) and how many employees you are looking to hire in the next few months (at least 5-10 in the next 6 months).
Stacy Ferranti, Global Head of Talent Ops at Pinterest, describes this in-depth, “When you are in that 50-ish person range and have made the decision that you are going to scale the company, that's when it’s time to bring on a Recruiter. It's at that point where you’ve tapped your ability to do founder hires. You've tapped your ability to do networking and referral hiring within your own company and you're also beyond your VC talent partners’ ability to introduce you to some of these folks.”
In terms of the first Recruiting hire you should bring on, look for an experienced Recruiter who can hire across the company as a generalist and not confined to a specific area of the business. They should have past experience building new teams at other startups, not just expanding teams at existing companies. Emily Zahuta, Director of Talent Acquisition at Lattice looks for “people who have come from either another startup environment or run a small startup within a larger company, because the hardest part is that back and forth pivoting, the ambiguity - creating something from nothing.”
Beyond the skill-sets and abilities standpoint, you’ll also need to view this person as a culture setter. As Tianna Johnson, Head of Talent Operations at Notion puts it, “The first hire should embody the ideal employee brand and enhance the company culture you want to build. They’ll be the face of the company and need to have an authentic pitch for why others would want to work there too.” Ultimately, the first Recruiting hire will be on the front lines of your company-building efforts, so invest time to find the person you want to encapsulate your culture.
TruePlan data aligns with the comments above on the timing and potential roles of a first Recruiting hire (table below). As every start-up has their unique personalized needs based on stage or size, potential pathways that we’ve seen for hiring include: 1) Recruiting reports into founder(s) or 2) Recruiting reports into a general People Leader. Where we’ve seen the latter, a Head of Recruiting is typically brought on around 175 - 225 employees.
When the first hire joins, there will likely be fires burning all over the place due to a heretofore non-existent talent acquisition process. The mandate of your first hire will be to kickstart this effort while having the understanding of which fires to put out, and which fires to let burn, along the way. Johnson explains her chief checklist for starting any new assignment, “For most early stage companies, the top priorities are: talent tech stack (defining the tools needed to hire great talent), and building out a fair and equitable hiring process (mapping out the interview plan).” With this strategy in mind, you’ll be able to establish the core foundation of a strong and scalable Recruiting organization.
When Should You Scale Your Recruiting Team?
With the first hire in place, what makes sense in considering a second hire and beyond? With the second hire, it may still make sense to continue to focus on developing robust processes and procedures.
As Johnson states, “You start thinking about the second hire and beyond once the foundation and priorities/roadmap of your recruiting function and operations are defined. This includes setting up your primary tech stack and tooling (sourcing tools, ATS, eSign, HRIS, wiki, etc.), general recruiting & hiring process, and mapping out a rough plan to onboard new hires. Ideally, the timing for making these additional hires should happen about 45-60 days prior to needing your recruiting resources to actively start recruiting for those roles. This will allow them time to ramp up, partner with business leaders to map out a hiring strategy and build resources for candidates (ie, take home assessments, sell documents, compensation calculators, etc.).”
However, once these processes are established it’s time to consider a more quantifiable approach as you scale. The primary methodology for handling this is through what’s called “capacity planning,” which represents a critical planning effort to not only ensure that you can meet hiring goals, but surface needs for additional team members if the numbers don’t pencil out.
Zahuta explains her capacity planning process when considering expanding her team, “All of my hiring is done off of a capacity model. If I know that there are X number of heads to hire in a year, or a quarter or a month, I back into how many recruiters I need. [If] I can make 10 hires a month and I know the business is asking for 30, I probably need two other recruiters to help fill that gap.”
This approach will help create a defensible hiring practice for achieving your hiring goals, but you’ll need to balance this with the expected performance of a team as Zahuta explains, “If a team is struggling to hit a cadence that’s appropriate for the business. I want to start looking at hiring funnels. I want to start understanding time-to-hire. I want to start understanding offer acceptance rates, and I'm going to look into performance management of the recruiters and the team in place.”
It’s these types of considerations that should be taken into account by your team to ensure their success as you seek scale.
How Should You Structure a Recruiting Team?
As always, the structure of an organization will ultimately depend on the company, business model and desire to invest in a Recruiting function. Overall investments in the function can and will vary, but for an organization with a strong focus on culture and people this figure will likely hover around 5% of the entire employee base, says Johnson.
In terms of the specific structure of the team, you should determine the appropriate time to build out specialties and resulting timeline variations for the roles that these specialties seek to hire. For example, the two primary lines of recruiting that Recruiters focus on are Go-to-market (GTM) and Technical. These two lines will drive hires in Sales & Marketing and Product & Engineering, respectively. With an established company of 150+, with brand recognition, and all else being equal, you can expect a rate of hiring of roughly 8-10 GTM hires, 6-8 R&D hires or 2-4 engineering hires per month.
Below, you’ll find a chart that shows what we’ve identified as the typical Recruiting structure for a 150-person company. If you’d like to learn more about the various ways to structure your Recruiting team, we’ve written another post about it here.
In-House Vs Agency Debate
If you’re still on the fence about whether to bring on full-time Recruiting employees when you’re first starting out, then you’re likely debating using an agency. Before making the decision, there are some important differences that should be considered both for the sake of getting new hires in the door as well as the impact on company culture.
Agency Recruiters are great for companies looking to quickly fill roles based on experience, skill set and fitting the general requirements for the company. However, at the end of the day these companies are external and not a part of the fabric of your company, nor do they particularly care about the culture you’re trying to establish. Their goal, and likely your goal in reaching out to them, is to quickly find and hire a qualified individual to bring on to your company. There’s no doubt that agencies are, ultimately, a very effective solution that should be considered, but do so with a grain of salt.
Alternatively, in-house Recruiters specialize in finding candidates that fit your company’s culture and that will best fit the roles you have identified. And why wouldn’t they? They’re a part of the company, bought into its mission, and want to be surrounded by individuals who share that same sentiment and value. In-house Recruiters may take slightly longer to fill roles upfront, and, on their face, warrant a larger investment, but they’ll pay dividends in aligning candidates they source for your company with your company culture and mission.
As Zahuta states, “There are foundational differences in how an agency recruiter thinks about headcount and hiring and getting candidates over the line in comparison to your in-house team. You want to have someone that's not afraid to say ‘no’ to the wrong candidate. If someone doesn't accept your offer, you want to say, ‘Okay, how do we learn from this?’ Sometimes if you pull someone right from an agency, the tendency is to want to go really fast and aggressively and build a pipeline, which can be attractive to leadership, but it doesn't always set the right foundation for the rest of the growth that has to come. You start to get into ‘let's fight for the hire versus fighting for the right person.”
Keep all this in mind when you’re growing your company, as you’ll likely only get one shot at establishing a great culture.
Your Recruiting function is undoubtedly going to tie back to culture, as this team will be on the forefront of anyone new who joins the organization. To set them up for success, be sure to bring someone on early to develop the foundation and processes required. From there, the team will be able to build and develop into a strategic cornerstone of your company. As Johnson closes, “Build the plane before you try to fly it- Set the foundation and build out some high level process before you try to scale or move too quickly. Organizations that don’t have the right tools & systems in place or ways to document processes end up having a harder time scaling efficiently.”
We hope you enjoyed this article. If you haven’t already, please read our past post on building out a Finance Department. Look out for the next installment, where we will provide a thorough review of building out a Legal Department.
If you’re ready to start building out your Recruiting team, book a quick, 15-minute demo with us to learn how TruePlan can help.