Startups have never done as much hiring as they do today, never spent as much money doing it and never done a worse job of it.
Most of the startups tend to outsource hiring to recruitment agencies hoping that it would take away a lot of pain from them and it will "somehow" work. But in reality it doesn't. This is why I think it doesn't work —
Company <> Candidate fit — Agencies in India are utter bad (except a few) because they don't properly represent your startup or opportunity to the candidates. This happens due to lack of a deep understanding of what your startup does or the role. Usually they tend to oversell the company <> candidate fit in an attempt to just win their fee. But most of the time, the agencies are highly unskilled, and they send you candidates that are absolutely a bad fit, causing this channel to become an unfiltered inbound one and flooding your top of the funnel with more noise.
Infinite Quantity, Zero Quality — Recruitment agencies are usually are like a marketplace where the agencies tend to send the candidates to multiple companies and they negotiate with each other if the candidate is strong - eventually it becomes a fight which is rather not good for the company as a whole.
Poorly structured, highly incentivised — When you are just starting up, these agencies seem the way to go. They handle your ops, bring in domain knowledge & have a bigger network. However, a very few agencies talk to the candidates and understand what they're looking for. To them this is extremely transactional & candidates are like a piece of paper. Most agencies also template-ise candidates' resumes, thereby fitting in all potential hires into the same peg-hole, they might not even want to fit into. While most candidates look great on paper, they most certainly have gaps in culture & personal traits you might be going after. Great candidates are rarely found this mass production, but even when they are it makes you question how they ended up at the agency.
I would love to brainstorm with folks who are trying to solve this very people-heavy problem with tech.