A practical guide for working with recruiting agencies

Written by:

Maryna Sivaieva

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in

Hiring

A practical guide for working with recruiting agencies

Let’s start with a fundamental truth about startup success: the most effective founders don’t outsource critical work. Instead, they focus on mastering core skills essential to building their company – whether it’s understanding markets, building products, customer acquisition, or team building. They seek help strategically; finding ways to extend their time, not to hand off responsibilities, to learn and grow in the areas most crucial to their company’s success.

In my role at Pear, I’ve had a front-row seat to one of the most common challenges facing early-stage founders: figuring out when and how to get help with recruiting. While many founders feel pressure to quickly hand off hiring to external partners, those who approach it as a learning opportunity consistently build stronger teams and companies. At the same time, we recognize the practical constraints founders face – sometimes external help is needed even for early hires. The key is understanding exactly where and how to leverage that support while staying actively involved in the process.

Overview

This guide will help you answer three critical questions about working with external recruiting firms:

  • When is the right time to seek external help?
  • How do you choose the right partner?
  • How do you make the partnership successful?

When to get external help

Think of recruiting like building your first product. You wouldn’t outsource product development without first understanding user needs and basic development principles. Similarly, you shouldn’t outsource recruiting without first proving you can hire effectively.

At Pear, we strongly recommend that founders personally hire their first five employees. These initial hires define your culture and demonstrate your ability to attract and evaluate talent. When you do need to bring in external help, it’s critical to be strategic about where you apply it in your hiring process.

External recruiting help makes the most sense when you face one or more of these challenges:

  • Your personal network and direct outreach aren’t generating enough quality candidates
  • You’re spending too much time managing candidate flow instead of evaluating and closing
  • You need to hire multiple roles simultaneously and can’t scale your efforts

In our experience, the most successful partnerships start with a focused scope: handling initial candidate sourcing and outreach. This approach maintains your control over evaluation and closing while dramatically expanding your pipeline. As you build trust with your recruiting partner, you can expand their involvement based on results.

Choosing the right partner

Once you’ve identified where you need help, selecting the right partner becomes crucial. Think of this like a scaled-down version of choosing a co-founder: alignment on vision and working style matters as much as capabilities.

Based on our experience working with hundreds of early-stage companies, we recommend two approaches for most founders: 

  • Contingency agencies
  • Hourly recruiting help

Contingency agencies are traditional recruiting firms that work on a “success fee” model – you only pay (typically 20-30% of first-year compensation) when you make a hire. This model offers lower upfront risk but higher per-hire costs. 

Hourly recruiting help, whether through independent contractors or RPOs (Recruitment Process Outsourcing firms), provides dedicated recruiting support at a fixed hourly rate. While you pay regardless of hiring outcomes, this approach offers more predictable costs and greater flexibility in how you use their time.

We strongly advise early-stage founders to avoid retained search firms unless hiring for highly specialized executive roles. Retained search is typically overkill for early-stage hiring needs and comes with significant upfront costs that could be better spent elsewhere.

Payment structure, while often a founder’s primary concern, is just one piece of the puzzle. Here’s what we look for when helping founders evaluate recruiting partners:

Core Capabilities

  • Proven track record with similar roles and stage companies
  • Deep understanding of your industry and talent market
  • Established processes for candidate sourcing and evaluation
  • Strong references from founders at your stage

Working Style

  • Clear communication and expectation setting
  • Transparent about challenges and limitations
  • Willing to adapt their process to your needs
  • Regular reporting on pipeline and activity

Making the partnership work

Success with external recruiting partners requires the same ingredients as any effective collaboration: clear expectations, regular communication, and mutual accountability.

Start with a strong foundation:

  • Define detailed job requirements and “must-haves”
  • Establish regular check-ins (weekly works best)
  • Agree on candidate presentation format
  • Set clear metrics for success

Contract terms require particular attention, as they’ll govern your relationship:

  • Replacement guarantees: These protect you if a new hire doesn’t work out. A strong guarantee commits the agency to find a replacement at no additional cost if the hire leaves within a specified period (typically between 60-180 days). Make sure you understand what situations trigger the guarantee – voluntary departures, performance issues, or both as well as any conditions that might void it.
  • Candidate ownership: This defines who can claim credit (and fees) for a successful hire. Good agreements clearly specify how long an agency “owns” candidates they introduce, whether your existing pipeline is protected, and what happens if a candidate reappears through different channels. Getting this right prevents future disputes over fees.
  • Exclusivity requirements: While some agencies push for exclusive relationships, promising deeper commitment to your search, carefully consider whether this aligns with your needs. Exclusivity limits your ability to work with multiple agencies or source candidates independently which may be an unnecessary constraint for early-stage companies.

Most importantly, stay involved. Review outreach materials, provide specific feedback on candidates, and lead final interviews and closing conversations. Your involvement ensures quality while helping you build stronger hiring muscles for the future.

Building for the long term

The best founders view external recruiting help as a partnership in building their company’s hiring capabilities. While these partnerships can accelerate your hiring process, they shouldn’t replace your involvement in this critical function.

Remember: your goal isn’t just to make a few key hires, it’s to develop the skills and processes that will help you hire the best team for years to come. Approach external recruiting partnerships with this mindset, and you’ll build not just a stronger team, but a stronger company. Most importantly, you’ll develop the hiring expertise that every successful founder needs.


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