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Need to Hire A Recruiter?

When companies begin, no matter how small and on how many “shoestrings” – if they begin in mother-in-law’s garage or basement family room – money and funding are in short supply. Owners and partners are forced to wear many hats and perform as many basic business functions as possible. As a startup or small business, where cash flow and cash control are critical, you need to keep one eye on the money at all times – for many months, and even years, depending on how well your business takes off.

As we have seen so often, one way that entrepreneurs control costs is by being a jack of all trades and assuming more than one job on the organization chart. But, as growth takes place, there comes a point where it will be more cost-effective and -efficient to hire in specialists, such as recruiters, accountants, bookkeepers and IT support, to take care of peripheral aspects of the business. Yet the question is, “When is the right time?”

  1. Regularly hiring friends and referrals without thoroughly checking references and capabilities

It is indeed tempting to hire friends, referrals and acquaintances without assessing skills properly. And they can help to fill an urgent search need you may have. But if this represents your entire hiring policy, then this is a high-risk policy. How do you know you are accessing best value and best practice? There are likely to be people on the market who may be able to add far more value to your firm. This is a sign you might need to hire an experienced recruiter or search firm.

  1. You have billable work waiting to be done, and you have to stop work to recruit and interview

It becomes more and more apparent that job vacancies are reducing your ability to serve your clients properly. And you are noticing that you must take more and more of your valuable time to find those replacements, then you have reached the point when it may more cost-effective to have a specialist recruiter do most of the hiring for you, so you can continue to focus on billable work.

For example, the cost of you personally taking time from your job for two weeks might cost the company $20,000, yet using a specialist recruiter in one form or another could cost as little as $12,000. Do the math: Would you prefer to lose $20,000 with “do it yourself” hiring or perhaps paying just $12-$15,000 to a recruiter – and in the process not having to ignore billable client projects?

  1. Excessive time and cost of hire

Most small businesses use time sheets to track billable time for client invoicing, but ‘unbillable’ time is often not recorded. Don’t let that unbillable time turn into a black hole. Get a user-friendly time sheet system and track all unbillable time and cost (based on your charge-out rate) to find out what you spent in terms of time and cost on hiring staff. You might surprise yourself.

If your cost and time spent on hiring is becoming excessive, e.g. amounts that are negatively impacting profitability, it could be time to hire a good search and recruiting firm. Since you hire them at a lower rate than yourself, this will give you more time to work in a more profitable way, which can easily offset the costs of the recruitment support.

  1. Lack of preparing job descriptions, written offer letters and employment contracts

If you are not preparing job descriptions, offer letters and contracts when hiring staff (for whatever reason), this is a clear sign you may need to hire a specialist recruiter. These are the basics of good hiring practice no matter what size of business, and if you are not doing this, you are placing yourself at much higher risk of making an unsuitable new hire.

  1. Excessive empty desk time

Here’s an important question to ask yourself: “How long are your desks staying empty?” Often the cost of engaging specialist hiring support will easily be offset by the increased output you achieve as a result of hiring someone faster, which is very likely if you use a specialist recruiter. Professional search and recruiting firms know the marketplace and the qualified candidates in it. They definitely cut down hiring time, and get that empty desk back into full production quicker.

Philip Kemper is Founder/President of KemperAssociates, a 38-year-old Chicago-based national executive search firm. Contact Phil with questions or comments at kemperassociates.org or kemperassoc@hotmail.com.

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