In early 2012 it was clear we needed to significantly grow our Pardot employee base and we weren’t bringing in new team members fast enough. From an organization perspective, we were growing the business from 70 employees to 110+ by the end of the year, with an expectation of even more hiring the following year. In an effort to scale to 200+ employees, we hired four full-time recruiters in-house to focus on engineering, sales, and services. Four recruiters, plus two additional people on the HR team, is a huge HR department for a 70-person company. In hindsight, it was a great move.
Here are a few thoughts on having in-house recruiters for growth-stage startups:
- In-house recruiters learn the mission, vision, values, and culture at the deepest level
- In-house recruiters spend all their time recruiting just for the company, and don’t split their time with other accounts like an outsourced recruiter
- In-house recruiters can identify and nurture a “virtual bench” such that candidates are lined up and ready as soon as the position needs to be filled
- In-house recruiters are typically in the $40,000 – $70,000/year range with commissions, depending on how many team members they bring on board
- Contingent outside recruiters can be great, but with fees representing 20% of the first-year salaries, adding $4 million in new payroll in a year equals $800,000 in fees (vs. less than half that for an in-house team)
- Referral fees for different types of hires are still encouraged (e.g. a $10,000 bonus for referring an engineer)
Growth-stage startups that plan on hiring a large number of people would do well to hire an in-house recruiting team and make it a company-wide priority to become excellent at recruiting new team members.
What else? What are some more thoughts on growth-stage startups hiring in-house recruiters?
David Cummings on Startups 
Hi David – great post on in-house recruiters! I have been a subscriber for a while though a silent reader, to a degree, given that I’ve never formally answered your question about “what else?”. You and I have connected in the past but only over the phone and email during the Pardot days. I work at Volition Capital and specifically for Larry Cheng. I know you’re an investor in our fund – many thanks for believing in our approach to investing. I’m quite confident you’ll be happy with your decision to partner with us.
Regarding your blog post, our most recent investment at Volition was in a recruiting software company targeting SMB/SME’s called The Resumator. It’s a low cost, flexible solution used to help the team of folks you described from your Pardot days. I’d encourage you to check it out if you haven’t already, and if there are any companies that you think could benefit from using The Resumator, let me know. I’d gladly put our best sales rep in touch with any prospects you have in mind that would like to learn more!
Thanks again for supporting Volition and also for the insightful posts.
Jake