Read and written by John-Miguel Mitchell
Startups Are Ditching Recruitment Agencies—Here’s Why You Should Too
We’re almost to the midpoint of 2025 and I’ve been thinking a lot about AI, specifically how its no longer the coolest toy in recruitment—it’s the new baseline.
In fact, 98% of companies are now integrating AI into some part of their hiring process, from resume screening to interview scheduling. Tools like HireVue, Pymetrics, and Metaview are taking over early-stage recruitment with unprecedented speed and efficiency.
This shift is exposing a major flaw in the traditional recruiting agency model: If software can do the majority of what agencies do—faster and cheaper—what exactly are you paying recruiters for?
Agencies used to justify their fees with “access to talent” and “screening expertise.” But AI has leveled that playing field. Founders now have access to:
- Automated resume parsing to reduce bias and improve efficiency
- Predictive analytics to identify high-retention candidates
- Natural language tools to assess communication style and soft skills
- Asynchronous interview platforms that save time and streamline vetting
This doesn’t mean human judgment is obsolete.
It means founders need human expertise where AI stops: in building culture, coaching leadership, and designing systems that attract and retain the right people.
Let me clarify—this isn’t an attack on recruiters or the partners who work at recruitment firms. I know many of them personally, and they’re incredibly well-intentioned, hardworking, and committed to doing right by their clients and candidates.
The issue isn’t the people. It’s the system.
The Agency Model Was Built for Corporate Backfilling—Not Startup Scaling
Recruitment agencies were never designed for high-growth startups. They were built for a different era—to fill vacancies in static org charts, not to help you scale leadership, culture, or mission.
Startups are drowning in turnover, culture drift, and chaotic hiring—and recruitment agencies are still cashing checks.
We get it. Agencies are fast. They’re familiar. And they promise to “take hiring off your plate.”
The traditional agency model is:
- Resume-focused (not culture-driven)
- Transactional (not strategic)
- Reactive (not proactive)
When you have this type of recipe for speed without alignment, it leads to misfires—and those misfires are expensive.
- Up to 89% of hiring failures stem from poor cultural fit.
- Replacing a bad hire can cost $50K to $240K.
- And turnover costs can reach 250% of an employee’s salary.
If you’re still relying agencies to that put all their eggs into the basket of great resumes to build your team, you’re not scaling—you’re gambling.
Trying to Scale with 1970s Tools in a Formula 1 Race
The best metaphor I can give you is Formula 1 (F1).
It’s considered the pinnacle of motorsport—known for its speed, cutting-edge technology, elite drivers, and global fanbase.
Each season, teams (like Ferrari, Mercedes, and Red Bull) compete in a series of races called Grands Prix, held in cities around the world. Cars often exceed 200 mph, and races are won or lost by fractions of a second.
It’s as much a tech and strategy competition as it is a driving one—precision, innovation, and split-second decisions define the sport.
Recruitment agencies are operating inside a model that was designed for a different era—like skilled mechanics working on Formula 1 engines using tools from the 1970s. The intentions are good, but the framework is outdated.
And when you’re trying to scale a modern startup—under investor pressure, remote work realities, and evolving employee expectations—you can’t rely on systems that were built for a slower, more predictable, less complex world.
Recruitment agencies were built for speed. You need a partner built for scale.
That’s where Ekipo comes in.
So let’s break down some of those key differences.
What You Think You’re Getting from an Agency vs. What’s Actually Happening
1. Approach
- Agency: Fill seats fast. Move on.
- Ekipo: Align hiring with your growth vision, leadership style, and company values.
We don’t hire for your company—we hire from your culture.
2. Cultural Alignment
- Agency: “Seems like a fit” based on a job description.
- Ekipo: Strategic fit designed to scale culture, not dilute it.
89% of new hires fail due to cultural mismatch. That’s not bad luck—it’s bad process.
3. Talent Attraction
- Agency: Posts your job on Indeed and waits.
- Ekipo: Turns your culture into your greatest recruiting asset.
86% of candidates won’t even apply to a company with a weak employer brand.
4. Employee Advocacy
- Agency: Doesn’t exist, they not in the business of thinking past Day 1.
- Ekipo: Helps you build internal champions who amplify your brand
5. Retention Strategy
- Agency: Reactive. When someone quits, they send you another warm body.
- Ekipo: Proactive. We help you create environments where people stay, grow, and advocate for your cause.
You don’t need more hires. You need fewer exits.
6. Leadership Support
- Agency: “Not our job.”
- Ekipo: Coaches your execs to lead with clarity, consistency, and culture
Teams replicate what leaders model. We help you model the right things.
7. Scalability
- Agency: Patches holes.
- Ekipo: Builds a culture operating system that scales
We don’t solve headcount problems. We solve trust problems.
8. Investor Readiness
- Agency: Silent.
- Ekipo: Prepares your team to survive the Series A to C sprint.
VCs notice when a team is scaling headcount faster than culture. So do we.
So, Why Are Founders Still Using Agencies?
They use recruitment agencies to get someone “in the seat” fast—without preparing the company to support that person long term.
They operate on a broken formula:
- Fill the role fast.
- Take the fee.
- Repeat (especially when that hire churns).
They skip the hard, foundational work of building culture, trust, and systems.
Here’s another reason why this is problematic.
The market is moving like a rocket. Most hiring strategies are still using a bicycle.
Since 1994, the number of full-time tech investors has exploded from ~150 to over 32,000.
That means more capital, more companies, and more founders competing for the same top-tier talent.
If funding has evolved, why hasn’t your hiring strategy?
Agencies were built for speed—not scale. They’re transactional, resume-focused, and completely unfit for the cultural, leadership, and brand challenges today’s founders face.
The Shortcut That Might Kill You on the Way Up
The 2nd and last metaphor I’ll share with you.
This week, a group of climbers is attempting to summit Mt. Everest in under 7 days—by inhaling xenon gas to accelerate their ascent.
The idea? Skip the 40-day acclimation process, avoid altitude sickness, and get to the top faster.
But here’s the catch: Medical experts say the science behind xenon is inconclusive—and the shortcut might actually increase the risk of a mid-climb health emergency.
Sound familiar?
This is exactly how most startups hire.
Recruitment agencies are the xenon gas of hiring: They promise acceleration. But without the groundwork, you’re just rushing into altitude sickness—or worse, an organizational avalanche.
In a market this saturated, Ekipo is your acclimation tent. You don’t win by hiring fast. You win by hiring right—with systems that align to your mission, leadership, and growth stage.
That’s why startups need more than a recruiter. They need a workplace culture consultancy.
If You’re Building a Startup That’s Meant to Last, You Need More Than Hiring Help—You Need a Culture Strategy
At Ekipo, we partner with founders and VCs to design culture-first systems that actually support scale:
- Hire the right people, not just available ones
- Build teams that self-sustain, not self-destruct
- Coach leaders to model what they want to multiply
- Make culture a competitive edge, not a liability
This isn’t about hiring faster. It’s about building smarter.
This culture-first approach not only improves employee retention but also enhances overall organizational performance.
Why Closing the Offer Letter Isn’t the Same as Building a Team
Funny enough, I once said in a board room to a partner of a very prestigious search firm that ‘executive recruiting is nothing short of a high-level transaction,’ she didn’t really love that.
But here’s the thing—if your entire hiring process ends when the offer letter is signed, you’re not building a leadership team, you’re closing a deal.
We help founders and portfolio companies build teams that lead with trust, scale with intention, and don’t implode post-Series A.
At Ekipo, we’re not in the transaction business—we’re in the foundation-building business. Because resumes don’t scale—systems, leadership, and culture do.
The Bottom Line:
Recruitment agencies weren’t built for startups—and the cracks are showing.
In an ecosystem flooded with capital, AI tools, and investor expectations, relying on transactional hiring models is like racing a Formula 1 car with tools from the 1970s—or trying to summit Everest without acclimating.
Speed isn’t your enemy. Misalignment is. You don’t need more hires. You need a stronger system.
At Ekipo, we don’t just help you scale headcount—we help you scale trust, leadership, and culture. Because if your team can’t survive growth, your product never will.
Questions for Startup Founders:
- If your next hire fails—will you blame the person, or the system that hired them?
- What’s your plan to scale culture at the same pace as headcount?
- Would your best people refer someone to work at your company right now? Why or why not?
- For VCs, How many of your portfolio companies are scaling people systems as deliberately as they scale product or revenue?
(And how much is it costing you when they don’t?)
Article was written by John-Miguel Mitchell who is the Founder and Lead Consultant at Ekipo LLC. If you’d like to learn more about how to design and build out the ideal workplace culture for your business, email him at jmitchell@joinekipo.com.
Liked the blog? Get new content delivered directly to your inbox every Thursday.
Ekipo 