Posted on: 09/25/2016

Jamie Ceglarz of The Sourcery on Recruiting and Human Resources for Startups

Jamie Ceglarz

Director of Growth - The Sourcery


Podcast Summary

Jamie Ceglarz of The Sourcery came by to talk about recruiting for growth stage startups. The Sourcery is an outsourced recruiting solution for early stage startups. As the startup scales, so does the relationship with the Sourcery. Jamie shares his best tips on hiring and on how a startup should build its teams.

Podcast Transcript

Scott Orn:

Welcome to the Founders and Friends with Scott Orn at Kruze Consulting. Today’s guest is Jamie Ceglarz at The Sourcery. Welcome Jamie.

Jamie Ceglarz:

Thanks for having me.

Scott Orn:

So you are … we met probably a couple of months ago and we hit it off. And you guys basically cater on the HR side to similar clients that we cater to at Kruze Consulting which are startups, mid-sized companies. You guys do a ton of recruiting for those kind of companies. Do you want to just kind of give your background and say what you guys do at The Sourcery?

Jamie Ceglarz:

Yeah. I mean the long and the short of The Sourcery is similar to Kruze Consulting as, as a company grows, there’s different levers that they need to pull around finance and accounting and they need different things at different times. Our business model is on-demand contract recruiting. Anything from, we need some additional sourcing support to we need a Head of Talent to do forecasting and reporting and process. And basically what we find with early stage companies is that they don’t need a fulltime Head of Talent and a fulltime sourcer and a fulltime recruiter. They just need a little bit of this and a little bit of that. And so that’s what we provide for them.

Scott Orn:

Yeah. Being able to kind of outsource that a little bit for the clients, for the startups and get someone who really knows what they’re doing and doing it over and over again is a huge value add for them. And the price point is probably really really affordable.

Jamie Ceglarz:

Yeah. And you asked about my background earlier, that’s why I saw value in The Sourcery is that they were a previous channel partner of mine. I worked for a much larger recruitment process outsourcing company that did what we do at a much larger scale. And what we found basically is that early stage companies, they need all of those little things but they don’t need it fulltime and they don’t know that they necessarily need it until they start getting rigged over the calls with contingent agencies.

Scott Orn:

And what’s that? A contingent agency is what? [02:00]

Jamie Ceglarz:

A contingent agency is a hostage negotiation between a recruiter who has a bunch of candidates and a CEO who’s spending all day Friday and all day Saturday sourcing engineers because they don’t yet have a recruiting solution. And so basically, what we do is go to them and say, “Here’s what we see as the problem and here’s the solution that we have,” and by kind of creating an economies of scale and having multiple clients needing the same thing, we can create a much more competitive price point to be cost-sensitive for early stage companies that are looking out for their burn.

Scott Orn:

I’ll kind of walk through an example. You can just tell me where The Sourcery interjects themselves. So I’m the CEO and we’re growing superfast and we just raised a $10 million Series A. Like a really big Series A. And now the Board has a lot of pressure on me to actually spend that money and grow like I told them we were going to grow like crazy this year. And so I’m sitting around and I have six engineers and one business person. I realize I probably need to do some real serious hiring. That’s where you guys come in, right?

Jamie Ceglarz:

Bingo. We kind of break down that example into short-term and long-term things that need to get solved. So that same CEO, something that he generally neglects when he puts a slide in his board deck to go raise some money and he says, “We’re going to hire 30 people next year,” but he doesn’t actually think through the org chart and how he plans on getting there, right?

Scott Orn:

It’s a simple Excel toggle. It’s like we went from one to two a month and we’re good.

Jamie Ceglarz:

Exactly. Well, they call Kruze Consulting and Kruze says 30 and then …

Scott Orn:

We build the model form as like a toggle of the employee growth really easily. [04:00]

Jamie Ceglarz:

But basically the short-term problem is that we know that there are two to three hires immediately and we can identify them and we know where the gaps in our team are. The Sourcery would send recruiting support to make an impact specifically on those roles and then simultaneously while that’s happening, we’ll have a conversation with the CEO or the COO about building out the headcount forecast and about building out some kind of backend reporting so we know what’s working and what’s not. Whether the hiring managers that are doing the interviewing are being effective or not. The short-term fire needs to get put out pretty quickly and then the broader goal is to help them understand what the next 6 or 12 months are going to look like as they kind of go through that next stage of their company.

Scott Orn:

You said something really interesting like you give them feedback on what’s working and what’s not. Can you give some examples of like things that are working in a recruiting process or signs when things are not working very well?

Jamie Ceglarz:

Yeah. I mean there’s a bit of a rabbit hole there that I’ll try to avoid but the …

Scott Orn:

These are like real problems though? These are real problems you’ll have and for the audience because we see everyone’s financials and we know what their financial models are supposed to be doing. Every company lags on hiring. No matter how everyone says how aggressive they are, people do not fill roles as fast as they should be filling those roles. That’s one of the reasons I want to have you on the podcast is like people are making these mistakes and I also think your service is really valuable for these companies. So like walk them through some of the mistakes and things that work well. Like what works well for hiring too.

Jamie Ceglarz:

Sure. I mean some of the mistakes I think are calling for recruiting support when you needed to hire the person on Monday. Some really easy low-hanging fruit value that we add to our clients is when we look at the headcount forecast and then we provide them with data that just says, “Hey across all of our clients, the average time to hire for an engineer with 6 or more years of experience is 60 days.” If you want to hire that person on September 1, I suggest that you start hiring and start the recruiting process 60 days before that. And there’s so much going on in the world of a CEO that that feel the need for the engineer that far in advance. So just putting a little bit of awareness around it. [06:00] Once we’re into the process, to your point about helping them understand the model, what they don’t think about is that the time cost and the opportunity cost of if we can just tell them, “Hey look, your hiring manager interviewed the last 10 people and all 10 of them got X’ed, we need to start tweaking this.” Whether it’s the salary bands, whether it’s the questions that they’re asking, whether it’s the candidates that are getting put into the process. The job description might be written wrong. Qualification questions on the phone screen might be wrong. What does the tech test look like? But in any case, if you’re having your team interview that many people and someone’s not there raising that red flag to tell you that all 10 of them got X’ed, the sooner that you can identify that problem and start creating a solution to it, the more efficient your little talent function is going to start running.

Scott Orn:

So you made a really good point there. Like unintentionally or intentionally sometimes the process is not set up right or the demands in the job description are too high or the person who’s doing the interviewing is not doing a very good job or maybe there’s a lot of people they liked but they can’t get anyone to accept the offer. I mean do you see that kind of stuff too?

Jamie Ceglarz:

Constantly. Part of our job is not to be a magic bullet and we’re not God’s gift to recruiting. What we’re doing isn’t rocket science. To a certain extent, recruiting is kind of a time and attention thing, right? You need someone to work at the model and to spend time going out and finding candidates and putting awareness around some of that simple stuff and sometimes that means when you’re talking to a CEO like, “Hey your brand’s not as hot as you think it is.” And, “Hey your space is more saturated than you thought. Here’s some feedback from these candidates.” We’re not God’s gift and we’re not planning to be. So sometimes that means giving kind of some tough love to the CEO’s and letting them know, if you want to get the caliber of people that you say you want, here’s where we suggest you are salary-wise. Here’s what we see in market. We talk to a lot of people and so a lot of our value is just gathering that data and feeding it back to them. [08:00]

Scott Orn:

Yeah you can see across many different hiring processes. That’s super viable. What are some things that candidates can do to make themselves more appealing or perform better in the process? How do you … you guys are doing a lot of screening it sounds like in finding people but how do you … to the audience out there, how do they do a better job of expressing who they are, why they’re fit for the job and just getting your attention?

Jamie Ceglarz:

From the candidate side, I think sincerity is number one, right? There’s a lot of noise out there. I think that when candidates try to be something that they’re not and it comes off as anything but sincere, that’s the easiest way to get exited from the interview process. CEO’s much more likely at least in my experience much more likely to work with someone that knows where their strengths are and where their weaknesses are. The CEO can go into an engagement with a new employee eyes wide open and knowing where they’re going to need support. That is a much better situation than a candidate who’s trying to act like more than they are and thus they come off a little bit untrustworthy and that’s a pretty quick way to no get yourself a job offer.

Scott Orn:

Yeah. What about diversity and gender diversity like attracting women engineers, minority engineers, like how do you guys approach that problem? How do you help your clients satisfy? I mean every … especially we’re in you know, in this day and age, almost every single startup wants diversity because it does make you stronger. It makes you smarter as a group. How do you attract those kind of candidates and really kind of make sure that they’re not getting X’ed unintentionally throughout the process? [10:00]

Jamie Ceglarz:

So to avoid the HR aspect of talking about gender-specific people or cultural-specific people, we focus a lot more on diversity of background. We talk to a lot of CEO’s that say, “I have to have 4.0 college grads and they can only come from MIT and Harvard.” And the first thing to do is to give them a bit of a reality check that that’s probably not going to happen. And the second thing to do is to help them understand the risk that they’re putting themselves at by having people that all think alike and they’re just kind of like they’re creating an army of yes man within their company. There’s an interesting article that I read and it was focused on medical recruiting but it was talking about how the bottom 90% of Ivy League graduates get published less in scholarly journals than the top 20% of the UC grads in the medical. And if you just present that data to someone and say, “Look, you only want someone from the Ivy League but do you realize that there are this incredible batch of people over here that you’re neglecting?” And that opens up their mind to the fact that there’s more out there that they’re letting go because they’re so pigeonholed and they’re thinking that they know it all. Sorry to any of those CEO’s that have that problem.

Scott Orn:

As a UC grad, I’m glad you stuck up for UC. What do you do in your process? Do you do anything special aside from educating the CEO’s about what kind of people they should be looking for? Like do you do double-blind interviews or anything like that? How do you guys manage that?

Jamie Ceglarz:

I said it earlier, no silver bullet within recruiting, right? The main difference of The Sourcery compared to your average contingent hostage situation recruiting firm is that we’re simply working as an extension of your team and on your behalf. So that’s everything from managing the job postings, reaching out to candidates and presenting qualified and interested people to the hiring managers who are invoicing for our time, there’s no success fees. So there’s no ulterior motive for us.

Scott Orn:

I didn’t know that.

Jamie Ceglarz:

There’s no ulterior motive for us to push candidates forward that are anything below par.

Scott Orn:

Can you talk about that and how that’s different than traditional kind of paying a recruiter on a bounty? I think that’s really interesting that your incentives are different than a typical recruiter. [12:00]

Jamie Ceglarz:

Yeah. So a typical recruiter is going to push for as high of salaries as possible and as low of a bar as possible because they want a commission check that is based off of the percentage of someone’s salary. So if they can get you to accept anybody with a low bar and if they can get you to pay that person astronomical salaries, then their commission check is going to be higher, right?

Scott Orn:

And it’s easier to attract someone to a job with a higher salary, right?

Jamie Ceglarz:

Bingo. The main difference there is that it’s very transactional. You’re not actually building any sort of talent function and you’re not really at all invested in the growth of the company. You just want your placement fee. The Sourcery’s goal is to be a long-term partner to its clients to help you fill these couple of priority roles and then once we do right by you and we fill those priority roles and we help you understand what the rest of the talent function should look like, once we fill those roles, there will be new roles behind it and we’ll continue to grow with you as your recruiting function up until the point that it’s our job to hire you an internal recruiter. Hire ourselves out of a job but to make you the world’s best referral source for us.

Scott Orn:

Yeah. We do the same thing. So you guys charge on an hourly basis? Like you’re actually billing time? Is that how it works?

Jamie Ceglarz:

Yeah. We bill for our time similar to CFO consultancy and then there’s kind of scope of work that goes into what we should focus on in the short-term, what the long-term goals are and generally, it’s not X number of hours a week just to be our recruiter. There’s very short-term, very specific needs that they need, right? We want to put X number of hours a week of recruiting resource against these two roles and that’s typically how our engagements start because they know exactly what they need.

Scott Orn:

That makes total sense. Maybe can you give the audience a little bit of background on you? Like we kind of jumped into The Sourcery and exactly what you guys do but like tell our audience how you landed at The Sourcery and why you love it so much.

Jamie Ceglarz:

Yeah. I’d touch on it a little bit earlier but I started my career in exactly the people that we sell against right now which is …

Scott Orn:

It makes you a very effective salesperson. [14:00]

Jamie Ceglarz:

It’s the contingent hostage negotiation throwing a bunch of unqualified resumes at a hiring manager situation. That was how I got into the recruiting industry out of college. I spent the last several years working for a larger what’s called RPO which is Recruitment Process Outsourcing. It’s 200person companies that don’t have anything in recruiting and we would drop a full team onsite and I developed a great channel partnership with the person that is now my boss at The Sourcery, Jessica and she was doing what we were doing but she was doing it for seed through Series B companies with this kind of toggle on demand levers that could get pulled to give them the support that they needed. In my previous company, there was a lot of overkill. There wasn’t a need for a fulltime revamp of the process when you were just a 25-person company that needed to make two engineering hires. So it was a little bit of overkill. I built a good channel partnership with Jessica and we were actually out to lunch a couple of months ago celebrating, or not a couple of months ago, way longer than that. Celebrating yet another client that I had referred to her and she kind of gave me the lowdown on what she was doing and who her client base were and it just was a great fit for kind of the combination of my experiences to start working with her. And the reason that I love it is because when I started with them, they had an incredible client base of happy customers but they didn’t have anybody that spent any more than 5% of the time. That was Jessica at the time going out and trying to find new clients and that alone let me know that they were really onto something. That they were adding value, they’re at the right price point, they were filling a gap in the market and so now it’s just a matter of kind of growing the business.

Scott Orn:

Yeah that’s cool. So you’re doing a lot of channel development and reaching out to people and just making sure people know The Sourcery story? [16:00]

Jamie Ceglarz:

Yeah. I mean this isn’t something that’s a direct sales thing, right? There are a lot of service providers, a lot of people that work with these companies and add value for companies that don’t yet need a fulltime this or a fulltime that. And our goal is to do right by them and to build the network of companies that add similar value that are kind of parallel partners and if there’s so much business out there and the economy is on its way up that there’s plenty of need for what we do and my joy is talking with people that hear our model and say, “Holy hell. You guys are doing something that I haven’t heard before,” and when I tell them about a couple of our success stories, it’s great.

Scott Orn:

That’s awesome. I mean I can totally relate because you have a very similar business model to us and I know. And I also like the fact that you’re willing to hire yourself out of a job. We do that all the time and people are kind of like shocked and we’re like, “Hey, totally cool. You’ve grown up.” We always say like, “You’re going off to college Mr. or Mrs. Entrepreneur and it’s time for you to hire someone fulltime.” And I think it’s refreshing to them that you’re willing to do that. Maybe you a can cover a couple of like mistakes or tips for entrepreneurs. Like just general stuff that you’ve seen that they can take away from the podcast. Like how do they not make the same mistakes as everybody else? How do they avoid that? Aside from calling you guys and working with you. Obviously that’s the first step or some tips that entrepreneurs can take away from this.

Jamie Ceglarz:

The biggest one, I touched on it earlier is not just taking the two minutes to think about what they need before it becomes such a burning pain point that it’s actually causing them pain. They got so much going on that it’s not surprising and it’s obviously not their fault with everything else going on. But that would be the first one is to just take a minute and think about that. [18:00]

Scott Orn:

Being proactive instead of reactive which is always challenging for a startup CEO and we see it too. They’re very reactive but that’s because they have a lot of things coming at them but I think getting that separation away from the business for a second or a day or an hour and be able to understand exactly what your hiring needs are going to be is super valuable. I mean do you guys do like a quick consultation or something like that to help them? Because I feel like it’s easier for them to do that if they can take a step out and meet with someone and actually hear how to do that. We have the same issue like people come to us and their financials are a total mess but they usually don’t come to us until either a board member has gotten super pissed off or they couldn’t get money from the bank or something like that or because someone told them they kind of get their act together and come talk to us. I mean do you guys do these kind of consultations?

Jamie Ceglarz:

Aside from it being a channel development aspect for us, it’s a huge value add to companies that are like one stage too early to need to work with us. And to be quite frank, it’s much more enjoyable way of us building a business. To do right by people and to give them suggestions that are other than you should work with us and get them to the point that it then makes sense for them to work with us, right? So there’s kind of Recruiting 101 tips that we have for teams that are sub-eight or sub-ten people of how to market map their network and leveraging their investors.

Scott Orn:

What are some of those … because we have a lot of clients that have five employees or ten employees, like what are a couple of those little tips for those guys?

Jamie Ceglarz:

Yeah. I mean the first one is that the rule of thumb is that everybody in the company is a recruiter, right?

Scott Orn:

That’s really really good. [20:00]

Jamie Ceglarz:

And that when you can have that mindset and you let everyone know that the most crucial thing that we can do is bring the right people onto our team and that we’re going to run out of money if we don’t keep building the product. And at that point in time, it doesn’t make sense to work with any outside provider. We need to roll up our sleeves and we need to be scrappy and do this ourselves. So let’s make a list of all the alma matters, of all of the universities that our employees went to. Let’s reach out to all those schools. See where those people are working now that all the CS degrees from X, Y, Z University. The same thing for all of the investors and make sure that you’re hounding them, right? Like here are the job postings that we’re looking for. If you have a Head of Talent internally at your venture firm or if you know anybody that I should talk to that’s a Head of Talent that can help me write these job descriptions. I think going to back to your original question about mistakes that a CEO would make is that generally in the market, recruiting I mean there’s no getting around the fact that it’s a low barrier to entry industry for people to get into and what that creates is a lot of bad recruiters that give the rest of the industry a bad reputation. And so CEO’s see all of that bad messaging, all of those bad recruiters in market and they just shut it off altogether and think that they can do it themselves. I would suggest to those people to shut off the noise but to find the one or two people that can be a partner that they can lean on. Even if it’s not leaning on him for work but just leaning on him for support and for ideas. Someone to come in that’s a friend of yours that’s a recruiter to help you write the job description to show you where to post it, how to post it. I typically suggest sooner rather than later that they get an applicant tracking system in place to at least filter and keep track of candidates and resumes. The person that applies to you now that’s underqualified, a year from now they’re going to have a year or more experience and they could be perfect for a job that you don’t know you’re going to have open yet.

Scott Orn:

That’s a really great one too. We don’t really do that but we need to start doing that. [22:00]

Jamie Ceglarz:

Well, I mean they have … there’s some incredible automation that comes now with a lot of these applicant tracking systems that you can tie it into marketing campaigns and newsletters and I mean at The Sourcery, we have 150,000 Bay Area candidates in our pool, right? And once a quarter, we can send out a newsletter to those people just letting them know what we’re up to and the exact same thing can happen for an internal company that they keep track of all those people that applied. And then once a quarter they can send out a big blast of all their job openings. It’s no different than kind of how marketing supports’ sales campaigns but again, if the CEO thinks that they know it all and they’re not even open to listening to those ideas …

Scott Orn:

You’re right though. That’s a modern approach to like how sales is done and why wouldn’t you do that for recruiting too?

Jamie Ceglarz:

Bingo.

Scott Orn:

Like a drip campaign, build the database, all that kind of stuff. That makes total sense. Awesome. Is there anything else that you see people out there just like totally … I mean we could do like a two-hour podcast on this probably. Is there something else where it’s like maybe something for kind of the 20 to 50-employee company? Like what are some issues that they … because we have a lot of clients that are late Series A, Series B, 20 to 50 employees and there’s that second layer where now the CEO may not be doing as much of the recruiting. There’s a whole another layer of people who are doing recruiting and filling up on job specs. What do you see there?

Jamie Ceglarz:

Yeah. So in that instance would be where I would tell you very directly to use The Sourcery but in an effort to avoid working with The Sourcery, I would simply say that it’s time to have a little bit more of a conversation about how you plan on building out the talent function internally. The way that we partner with companies to do that is typically at kind of the 30 to 40-employee range. They at least have like an admin, an office manager, an ops person and that’s the person internally that can take down all the job specs, can do first round like very light phone screens with candidates, can make sure the jobs are refreshed. [24:00] There’s things that need to get done around recruiting especially with how hot the market is in the Bay Area that someone just needs to take the time to be on top of candidate feedback, to give responses to candidates, to move fast. Just like in sales, time kills all deals and you better believe that a good engineer is going to have other offers. So if you just kind of rest on your laurels thinking that this person wants us so bad that they’re going to wait around for me to get my act together, you’d be sorely mistaken.

Scott Orn:

Yeah. Awesome. These are really good tips. So maybe you can kind of tell the audience a little bit about where they can find The Sourcery, how they can get a hold of you, how you walk into a new client. I like the consultation aspect because we do the same thing. We’ll talk to people for free and we’ll always be able to give them a lot of tips and if they’re not a fit, we’ll tell them they’re not a fit but we’ll always leave them with a few things.

Jamie Ceglarz:

Yeah or you could me is that our physical office is about a block from here. It’s on 1st and Market, Downtown, San Francisco. We work with companies I think probably 70% of our clients are based in San Francisco but with that said, they’re hiring in offices and expanding all across the country. We have open roles in LA, up in Seattle, Columbus, Ohio, New York. Like our model of just putting resources against roles and going out and reaching out to candidates, there’s a little thing called LinkedIn and they have like an area code aspect to their search which allows us to get as specific as we need to. The way we typically get started with a client is generally referrals but the way that that first conversation typically goes is us understanding what you need. If there’s a fit, the CEO generally knows the one or two roles that they need to get filled and they know that they’re not the right solution and they need someone to do it. But that same CEO also has hesitation around hiring an internal really robust recruiting function because six months from now, he might not have any hires or enough hires to justify keeping on an internal recruiter and that’s the opportunity that we’re filling is to be a stop-gap solution and to help them for as long as they need and if all goes well and they continue to grow, then we can grow with you and we can hire ourselves out of a job but if for whatever reason you need to put a pause on hiring, you’re not left holding a couple of fulltime employees. [26:00] So that’s really it. I mean it starts with a pretty lightweight conversation around what they’re going through, what they’ve tried so far, some advice around how to fix it and either they want us to fix it for them or they want to talk to us in a couple of months if they’re unsuccessful doing it themselves.

Scott Orn:

That’s really good. Maybe you can tell everyone where to find you on the web and what your email address too.

Jamie Ceglarz:

Sure. So the website is pretty simple. Www.thesourcery.com.

Scott Orn:

It’s such a cool name. I love the name.

Jamie Ceglarz:

Yeah. We need to teach people to do magic or something to go along with it.

Scott Orn:

Your logo should be like a wizard’s hat or something.

Jamie Ceglarz:

And then I’m just Jamie@TheSourcery.com. J-A-M-I-E. And that’s really it. I mean I get a lot of pleasure out of having those kind of pro-bono scoping conversations about what else you could be doing that you’re not currently doing and if The Sourcery’s a fit, then great. If not, nothing wrong with building the network and adding a little value.

Scott Orn:

Well, thank you for coming on. Tons of good tips. Really appreciate it. And Jamie Ceglarz at The Sourcery. You can find them on the web or just email Jamie. Thanks Jamie. Appreciate it.

Jamie Ceglarz:

Very cool. Thank you man.

Scott Orn:

Thank you. Take care.

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