Growing a sales team is one of the most important and expensive decisions you can make when running a business. Hire well and you can increase revenue but if you hire poorly, the consequences can impact your pipeline, the team's morale and your profits. So when the time comes to bring on a new salesperson, do you hire in house or bring in a specialist recruitment agency to help?
The answer depends on your circumstances and an understanding of what each approach really costs, which we will be looking at today.
Costs Of Hiring In House
Most business owners consider in house hiring costs as the salary of an HR professional or the price of a job board listing. However in reality it is considerably more complicated. The costs of hiring in house tend to include:
- Job board & advertising fees - up hundreds of pounds per posting
- ATS & recruitment software - ongoing subscription costs
- Management & HR time - checking CVs, arranging interviews & managing offers take resource
- Lost revenue - every week without a hire impacts pipeline activity
- Onboarding & training - time & cost of getting a new hire up to speed (3 - 6 months)
- Bad hire - REC states a bad hire at mid management level can cost a business £132,000+
When you consider all of these costs in house hiring is not as cost effective as it first appears.
Sales Recruitment Agency Costs
Agencies generally charge a percentage of the placed candidate's first year salary (between 15% and 25% for sales roles) depending on their seniority and specialism.
A specialist recruitment agency brings a vetted talent pool, market knowledge and a fast process. Additionally most reputable agencies offer a rebate or replacement guarantee if the hire doesn't work out within an agreed period, which reduces your risk. You also free up internal resource as your hiring managers can focus on running the business, instead of vetting applications.
Comparing The ROI
The ROI calculation for a sales hire is particularly clear. A salesperson generates revenue so every day a vacancy is empty is a day of lost leads.
In house hiring in the UK takes an average of 6 - 8 weeks from vacancy to offer. But a well connected agency can often reduce the time to 2 - 4 weeks. For a sales role with a £500,000 annual target, this time difference can represent tens of thousands of pounds in revenue opportunity.
Finally factor in the reduced risk of a bad hire, the agency's candidate quality and the management time saved. You will often find that the agency fee pays for itself quickly.
Which Approach Is Right For Your Business?
In house hiring makes sense in certain situations if you have:
- Strong internal talent acquisition function
- Established employer brand
- Volume to justify infrastructure
Businesses hiring at scale and in a steady, repeatable way find their cost per hire reduces over time.
But if you are hiring for a specialist or senior sales vacancy, working to a tight timeline or don’t have a dedicated TA resource, an agency becomes a better solution. Their speed, quality and reduced downside risk are difficult to replicate without the right set up.
Work With a Specialist Recruitment Agency
At Apache Associates we work with UK tech businesses to place high performing sales professionals quickly and with confidence. We understand what a strong candidate looks like in a commercial hire and we have the networks to find the right people efficiently.
If you are looking at your options or are ready to start a search, we would be glad to help advise you. Simply get in touch to arrange a time to speak with us.