3 Reasons Start-Ups Work With Tech Staffing Agencies

Whenever start-ups need to hire programmers, project managers, product owners, quality assurance developers, and other tech staff, they must decide. Should they hire tech staff in-house or work with tech staffing agencies?

Each option has pros and cons. This write-up highlights the advantages and benefits of working with tech staffing solutions providers.

  1. Fill Open Positions Quickly and Minimise Lost Revenues

Tech staffing agencies have a ready pool of talents in specific tech verticals. They have candidates they can immediately field for software engineering, enterprise resource planning, customer relationship management, business intelligence, and cyber security roles, among others.

Thus, when you work with staffing agencies specialising in tech recruitment and fulfilment, you are better positioned to quickly fill open positions.

Why You Want to Quickly Fill Vacancies

According to the Society for Human Resource Management’s Talent Acquisition Benchmarking Report, published in 2017, the average time-to-fill for open positions is 36 days. The picture gets bleaker as you move to tech. According to an article published on Workable, 68 days is the global time-to-fill average for information technology and development/engineering roles.

That’s more than two months, and as you know, the longer a vacancy remains unfilled, the more it will cost you. A vacancy is a position that should be earning the company money but isn’t, and every day a role remains unfilled means unrealised revenues for the company.

You can estimate the lost revenue for every open position by doing the following.

  1. Divide your company’s yearly revenue by the number of your employees. That’s the annual revenue per employee.
  2. Divide the annual revenue per employee by the number of working days (e.g., 261). That’s the daily revenue per employee.
  3. Multiply the daily employee revenue with a predetermined multiplier to distinguish positions according to individual impact on company revenues. More important roles or those that contribute more to the company’s revenues may get a multiplier of two, while leadership positions may be multiplied by three. The result is the employee’s weighted daily revenue.
  4. Multiply the weighted daily revenue by the number of days the position is vacant. That’s the revenue lost while the job remained unfilled.

To illustrate, suppose a company has an annual revenue of USD 100,000,000 and 200 employees. The open position is for a developer role with a multiplier of two, and it took 68 days to fill it.

Annual revenue per employee: US 100,000,000 / 200 = USD 500,000

Daily revenue per employee: USD 500,000 / 261 = USD 1,915.71

Weighted revenue for the developer role: USD 1,915.71 x 2 = USD 3,831.42

Revenue lost due to the vacancy: USD 3,831.42 x 68 = USD 260,536.56

In other words, this hypothetical company lost USD 260,536.56 in revenues for the 68 days one developer position was unfilled. Extrapolate that for all the unfilled developer positions, and you can see the scale of potential gains lost whenever a company cannot fill open positions quickly.

  1. Scale On-Demand and Grab Business Opportunities

Suppose your company has won a contract to develop and implement a custom enterprise resource planning system for a shoe manufacturing company. The contract value is considerable, but the scope of work is extensive.

For this project, which you estimate will take one year, you must augment your staff with 10 programmers. With the average time-to-fill for tech roles at 68 days globally, that’s more than two months of receiving applications, screening applicants, interviewing candidates, and choosing your new hires.

After finalising your hiring decision, you have to spend more time and resources onboarding your new employees. It will take you almost two and a half months from job posting for your new team to be completely settled in and running at full productivity.

However, what will you do with your new employees after completing your custom ERP system development and implementation project? You will have two options.

One, you can let them remain, paying them their salaries even though they’re underutilised. Two, you can let them go and waste all the time you spent recruiting, onboarding and training them. Either way, you will waste company resources.

Flexible Staffing Lets You Scale on Demand

Tech staffing agencies can fulfil your tech staff requirements quickly and conveniently while allowing you to scale up or down as needed. Get as many engineers, developers and data analysts as you need when you need them and efficiently take advantage of business opportunities as they arise.

Do you need six new developers to meet the eSIM management needs of telco clients? Your tech staffing partner can quickly provide you with those six developers. You have full flexibility, too, as you can set your contract terms. You can have these developers for three months, six months or one year. It’s up to you.

Upon the conclusion of your project, you are not obligated to keep your contractual staff. Your new team will be dissolved without any equipment, software and capital losses on your part. In contrast, if you need your contract hires for longer than you initially thought, you can easily extend your agreement or draft a new one.

  1. Improve Fit and Retention Rates

Tech staffing firms specialise in technology recruitment and have lead specialists in every industry vertical. Thus, they can provide you with the most qualified candidates for your open tech positions.

When your employees are well-matched with your requirements, you can achieve superior outcomes. Naturally, you can also improve employee turnover and retention rates.

In-House HR vs Tech Staffing Agency

Tech staffing agencies are experts at tech jobs. They know which qualifications to look for in candidates for QA developers, software testing engineers, digital project managers, data privacy and protection officers, and database architects. This ensures they can effectively craft job vacancy ads that attract suitable applicants.

Tech staffing solutions providers also often have automated candidate screening systems to streamline applicant and job matching processes. Additionally, their tech specialists will know how to conduct practical assessments to evaluate particular abilities and competencies.

On the other hand, an organisation’s human resources personnel may have to rely on their information and technology department for job descriptions. Consequently, they may find it challenging to craft attractive personnel wanted ads and to screen job applicants. Even if a technology company is involved, its HR staff may not have sufficient tech vertical knowledge to assess actual competence and job fit for specific roles.

Tech Staffing: Enabling Growth

Tech staffing solutions help start-ups accomplish three things. They help fill open positions quickly to minimise lost revenue, scale on-demand to grab business opportunities as they arise, and improve employee fit to boost talent retention rates. These are factors that empower and help start-ups grow.