What to look at when externalizing recruitment?

Head Hunters / Recruiting Boutiques

Role

Head hunters function as your consulting boutique, operating remotely, based on an established job description or complete brief. This means you need to have a clear job description in hand before signing the contract. A common mistake is to start working with a head hunter with an evolving brief.

Recommended for

High executive searches (from department heads to C-levels) or very specialized profiles (e.g., developers, data analysts).

Approach

Their main role is to identify suitable candidates and manage the hiring process. Top tier head hunters will help you define the role and craft the job description. The process usually involves a weekly follow-up call with you. They conduct initial interviews to assess candidates' suitability for the job. It's essential to clarify how far they assist in the interview process; for instance, some may provide scorecards or case studies relevant to the role. Others may leave you to do the heavy lifting.

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There is a notable difference in the way that Head Hunters and RPO specialists/agencies operate in Germany vs. in other countries like France. In Germany, they tend to be more closely involved in the hiring process - providing consultation, guidance and expertise along every step. Elsewhere, the relationship tends to be more transactional and limited in scope to the search for a candidate based upon the brief you prepare- and little more.

Cost & Conditions

Most head hunters work based on a retainer and success fees. Some newer or leading ones may work solely on success fees. They may request exclusivity, especially when working on success fees. Success fees typically range from 18% to 35% of the candidate's fixed salary. The retainer can be up to 30% of the success fees (though negotiable). More agencies now offer a replacement service, where they replace a candidate who fails to complete the trial period for free or at a reduced cost. Make sure to ask about the terms.

Duration

A partnership with a head hunter lasts around two months, possibly longer for high executive searches.

Choosing a Head Hunter

The role of a recruiter is two-fold: 1/ it is inherently personal and intuitive, and 2/ it relies heavily on an established network.

  • The skill of a recruitment agency lies not in its title but in the quality and competence of its individual recruiters. It's crucial to identify who will personally oversee your search. A common error often seen is when a junior recruiter is assigned to a high-level executive search, without sufficient understanding of the specific roles and responsibilities of a position like a CFO. This is why I find it essential to ask the following question: "What measures are in place to ensure consistent service quality among your recruitment team? How is their training conducted?"
  • It's also important to evaluate th8eir active talent pool - how extensive is it? Are these candidates actively seeking opportunities or open to new propositions? Assessing the recruiter's efficiency is equally vital - if it typically takes them longer than three months to place a candidate, it may be advisable to look elsewhere.
  • Their area of specialization also matters. What job categories or levels of seniority does the agency excel in? Personally, I find that recruitment agencies specializing in specific fields tend to be more effective.
  • Lastly, consider the role of automation in their process. Recruitment involves several repetitive tasks. Understanding how the agency balances these tasks with a focus on personalized, human-centered service can provide insight into their overall approach and effectiveness.

RPO/Talent Acquisition Freelancers

Role

RPOs are freelancers who often work from your offices (or remotely) independently or via RPO collectives/Part-Time Recruitment Agencies. Some Head Hunters also offer RPO services.

Recommended for

Mass recruitments (e.g., 30 salespeople, 15 engineers) or very specialized profiles.

Approach

RPOs/Talent Acquisition freelancers not only recruit for you but also build your recruitment processes. They manage the entire recruitment process, from defining the job role to onboarding the candidate.

Cost & Conditions

RPOs/Talent Acquisition freelancers charge a fixed daily fee, usually between €350 and €950 / day (VAT included).

Is it worth it? This is a question of cost-benefit analysis.

When the cost of outsourcing exceeds that of hiring a full-time recruiter for your startup, it's time to internalize! According to a salary study by Joomy HR recruitment firm, the salary of a recruitment officer with 2-5 years of experience ranges between €37,000 and €46,000 gross per annum. To simplify, we'll take the average: €41,500 gross per annum with a total employer cost in France of about €65,000 per annum.

RPOs typically charge a daily rate between €350 and €950. For simplicity's sake, let's consider an average rate of €650. Therefore, if you require someone for more than 100 days in your company, it's worth considering internalization.

Duration

The minimum contract duration is usually three months, with a minimum commitment of two days per week.

Finding and choosing an RPO/Talent Acquisition Freelancer

You often have to pursue them proactively on LinkedIn as good RPOs usually aren't looking for customers. Alternatively, you can use a Part-Time Talent Acquisition firm with a pool of available RPOs, or a dedicated marketplace such as Muzzo, or Crosspath. I also have a list if needed.

Once found, look at their specialization and ask for their Hiring Speed quota (a good RPO can make 60 placements per year). Also, ask for their hire churn rate: successful onboarding and passing the trial period is crucial. I'd recommend hiring someone with at least three years of experience.

Recruiters’ Scorecard

CategoryQuestionsWhat is to be assessed?
IDENTITY/SCOPE
if the answer is “we can do anything” > not good.
IDENTITY/SCOPE
if the answer is “we can do anything” > not good.
IDENTITY/SCOPE
IDENTITY/SCOPE
Huge machine or human sized team. Should be aligned with geo scope.
IDENTITY/SCOPE
Should be aligned with # team members. Do the maths but if a consultant have more than 5 customers at the same time, it begins to be difficult.
IDENTITY/SCOPE
IDENTITY/SCOPE
Any initiatives will be welcome. A bad answer is “nothing”.
TERMS AND CONDITIONS
Retainer? Success fees?
TERMS AND CONDITIONS
If no, negotiate it.
TERMS AND CONDITIONS
Should be at least the trial period duration, including usual reconductable period.
TERMS AND CONDITIONS
Try not to.
TERMS AND CONDITIONS
Max 3 months.
TERMS AND CONDITIONS
Article to add in the contract to make sure that you can stop the contract in that case.
SERVICE DELIVERY
Know if the senior ones will do the job or not. Common mistake, an intern looking for C-levels on Linkedin.
SERVICE DELIVERY
Is it structured? Will you be updated on a regular basis?
SERVICE DELIVERY
2-3 months is good.
SERVICE DELIVERY
Usually, 1 or 2 workshops planned at least.
SERVICE DELIVERY
SERVICE DELIVERY
SERVICE DELIVERY
SERVICE QUALITY AND EFFICIENCY
Good answers are Interview
SERVICE QUALITY AND EFFICIENCY
Relying on a strong network or only linkedin?
SERVICE QUALITY AND EFFICIENCY
Good answer is “not a lot”, 4-8 is good for a first round.
SERVICE QUALITY AND EFFICIENCY
ADDITIONAL SUPPORT
ADDITIONAL SUPPORT
If yes, try to know if these are structured and on the shelves resources or if they will do it “if they have time”
ADDITIONAL SUPPORT

Recommended Head Hunters and RPO/Talent Acquisition Freelancers by XAnge*