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Hiring usually gets treated like a candidate problem.
We need better people.
We need more applicants.
We need somebody with more experience.
But before any of that, there is a more basic question: where are the people we actually want, and what is the most cost-effective way to reach them?
That is the real recruitment sourcing decision.
Get it wrong and we normally pay for it one of two ways. We spend too much finding candidates we could have reached more cheaply, or we save money using a channel that never puts us in front of the calibre of person the role requires.
Those are very different mistakes, but both get expensive fast.
Start Recruitment Sourcing Inside the Business
Internal recruitment is probably the most overlooked source of talent in founder-led businesses.
We often assume that if someone inside the company was capable of doing a bigger job, they would already be doing it.
That is not always true.
Sometimes the person is there. We just have not created enough visibility into their ability or given them a development path that makes the next role obvious.
Internal recruitment has a major advantage over almost every other form of recruitment sourcing because we already know what we are buying.
Their performance is known instead of inferred from an interview.
We already understand the cultural fit.
The onboarding cost is lower.
And when people see others being developed and promoted from within, it sends a pretty strong message about whether staying with the company creates opportunity.
That matters for retention too.
The discipline here is simple. Before we begin an external search for any significant role, deliberately look inside first.
There will be plenty of roles where no internal candidate is ready. That is fine. The point is to stop assuming the answer before looking.
Referrals Are Cheap Because Someone Else Already Did Part of the Screening
Employee referrals are another recruitment sourcing channel that businesses talk about more than they actually use.
A good referral is different from a random applicant.
The employee making the introduction knows something about the company and something about the candidate. They have already done an informal version of the screening process before the résumé ever reaches us.
That is why referred candidates can convert to hire at two to three times the rate of other channels, stay longer, and perform better on average.
But saying, “Let us know if you know anybody,” is not a referral programme.
A real programme has a defined incentive, commonly $500 to $2,000, a clear process for submitting people, and feedback on what happened after somebody was referred.
If we want referrals to become a dependable hiring source, we have to treat them like a system instead of an occasional favor.
LinkedIn Recruitment Sourcing Works Best Before Somebody Starts Looking
For professional roles, LinkedIn remains one of the strongest direct sourcing tools available.
We can search by title, industry, geography, company history, skills, and experience. In many cases, we can map a meaningful portion of the candidate market before we advertise the role at all.
But access is not really the hard part anymore.
The outreach is.
The candidates we most want are often already employed. They are not scrolling job boards hoping somebody sends them an “exciting opportunity.”
Generic outreach gets ignored.
If we are going to contact somebody directly, the message needs to show that we actually looked at their background, understand why this role may be relevant to them, and can explain that opportunity in a few sentences.
Done well, that kind of targeted outreach can produce response rates of 20% to 40% from strong candidates.
That is a very different game than posting a job and hoping the right person happens to see it.
Recruitment Agencies Should Solve an Economic Problem
This is where hiring decisions can get emotional.
Some owners do not want to pay a recruitment agency because a 20% fee feels expensive.
Others happily pay the fee because they do not want to manage the process.
Neither answer is automatically right.
If the salary is $70,000 and the agency charges 20%, the fee is $14,000.
Now imagine the agency shortens the hiring process by six weeks. That recovered productive time might represent around $8,000 in salary at full productivity.
If handling the search internally requires 40 hours of management time worth $150 per hour, we have another $6,000 of internal cost.
Suddenly the real difference between doing it ourselves and paying the agency may be somewhere between almost nothing and roughly $8,000, depending on how we value management time.
That is a much better way to make the decision.
The question is not whether agency fees are expensive.
The question is what problem we are paying them to solve.
When Executive Search Actually Makes Sense
Executive search becomes more defensible as the consequences of getting the hire wrong increase.
Fees of 25% to 33% of salary are significant. But so is putting the wrong person into a senior leadership position.
Executive search makes sense when three things are true: the position is senior enough that a bad hire would materially hurt the business, the strongest candidates are probably not actively looking, and we do not have the internal network required to reach them.
Leadership roles fit that profile.
So do specialist positions with very narrow candidate pools and confidential searches where we do not want the role advertised publicly.
Where owners get into trouble is making this a comfort decision.
Sometimes we use executive search because paying someone else feels easier than managing recruitment ourselves.
Other times we avoid it because the fee hurts, even though one bad senior hire could cost several times more.
That is backwards.
The sourcing method should follow the economics and the risk of the role.
Graduate Recruitment Only Works at Enough Scale
Graduate and early-career recruitment can become a powerful talent pipeline because candidate volume is high, salary expectations are lower, and we can teach people our own methods and culture early in their careers.
But dedicated graduate programmes require infrastructure.
University relationships.
Application systems.
Assessment.
Development.
That investment generally does not make sense for most companies below roughly $10 million to $15 million in revenue.
Below that level, we can still hire excellent graduates. We just usually do not need an entire graduate recruitment machine around them.
And that gets to the larger point.
Good recruitment sourcing is not about picking your favorite hiring channel and using it for every job.
The right source depends on the role.
Internal recruitment gives us the highest certainty because we already know the person.
Referrals bring pre-qualified candidates at relatively low cost.
LinkedIn gives us direct access to professional candidates who may never apply.
Agencies buy us process capacity.
Executive search gives us deeper access when the cost of getting a senior hire wrong is high.
We should not pay $30,000 to solve a $5,000 sourcing problem.
But saving $20,000 on the search does not mean much if the person we hire weakens the company for the next three years.
Hiring is capital allocation too.
And if we want to build a business that becomes less dependent on us, the quality of the people we put around us will eventually matter far more than what we saved finding them.
Justin D Maxwell provides family office and investment bank services to the lower midmarket to founders who want 8 or 9 figure net worths. You can learn more here: www.justindmaxwell.com or take our free assessment here: https://fielding.global/articles/diagnostic.html