Did you know a prolonged hiring process can cost you the most sought-after candidates? Around six in ten job seekers will withdraw their applications because the hiring process takes too long.
That's a costly impact on your business. It means you are less likely to find the right person. You may even have to start your recruitment efforts from scratch.
That's one reason why some businesses choose to outsource instead. In this guide, we'll outline some pros and cons of using an outsourced recruitment team and help you decide which is best for your business.
In-House Recruitment
Let's begin with an examination of the in-house recruitment model. Here's what you need to know.
In-House Recruitment: What It Means
In-house is where you use an internal HR team to manage your requirements. Small businesses may not have an HR team; one or two people might do this recruitment work instead.
This option is the more traditional model of the two. As companies grow, they often build a dedicated HR team that takes on many personnel responsibilities, like payroll and training.
Recruitment fits naturally as part of that. An in-house team will manage the end-to-end recruitment.
They'll define what jobs the company needs to fill and write the job specs. They'll advertise for the role, screen CVs, and arrange interviews.
Finally, they'll put together the compensation package for the preferred candidate.
In-House Recruitment: The Advantages
Some businesses favor in-house recruitment as it has several advantages. First, it gives you complete control of the recruitment process. So you can take the approach and pace that suits your business.
For example, you might have specific demands for how you write the job description and prefer that to be done by someone else.
There are also shorter feedback loops. For example, suppose a candidate turns down your offer. In that case, you can get that information immediately without waiting for the recruiter to call you.
In-house recruitment also means managing your hiring process in line with your company culture is more straightforward.
You may have specific values as a business but feel nervous about outsourcing this to a third-party team.
So, an in-house process can make it easier to maintain your company culture and hire someone who fits well with your business's operations.
In-House Recruitment: The Disadvantages
Choosing to go for an in-house recruitment team also has its disadvantages.
First, you have resource limitations. You can't double your HR team overnight, so you can only move as fast with recruitment as your team allows.
That can be a disadvantage if you suddenly need to scale, and it could slow you down. It can be more of a challenge if you have a recruitment demand that coincides with a busy period for your HR team, like an all-company training rollout. Adding to that pressure could impact an HR team's productivity or lead to burnout, especially if that team is relatively small.
In-house recruitment also limits you if you have specialist roles to fill. For example, if you are recruiting for senior leadership, that requires a different approach to your standard hiring process.
If your team lacks that experience, you could find it a challenge. There are also the costs of hiring using your in-house team. A full-time HR team has overheads like office space, training, and salaries.
Suppose you want to scale; it's costly. It diverts investment from other essential areas of your business. It also lacks flexibility. You can't scale your recruitment to deal with a short-term demand and scale it back later.
Outsourced Recruitment
Let's now move on to the alternative to in-house recruitment. Here's an overview of outsourcing recruiting efforts and some of the pros and cons of this approach.
Outsourced Recruitment: What It Means
With an outsourced approach, you get a comprehensive hiring model and recruitment team to support all aspects of your recruitment.
That will include things like writing job ads, job specs, screening, and even first-stage interviews. These teams can also help you negotiate a compensation package.
You will find outsourced recruiters specializing in some areas, such as senior executives or some industries, like medical workers.
Outsourced Recruitment: The Advantages
There are many reasons why companies choose to outsource their recruitment.
First, it helps you access specialist services and knowledge that can help you get the most from your recruitment effort. Second, when you work with an agency, you can tap into their preexisting database of candidates, allowing you to cast the recruitment net as wide as possible.
These agencies often have access to specialist skills that might be hard to find. So tapping into their list of contacts is hugely beneficial.
Outsourced recruitment is also a cost-effective model for businesses. You don't have to spend much on overheads to create or expand an in-house team. Instead, you use the recruitment specialists when you need to for your company.
That's helpful because there may be points in the year when you do a lot of recruitment and other times when you do little. In the dips, you won't have an expensive in-house team underutilized.
This flexible approach also makes you more agile as a business. Suppose you have a sudden demand for more staff. In that case, doing this via an outsourced agency is quicker, as you won't need to overburden an internal team.
Outsourcing also lets your team focus on core operational work without getting distracted. A busy recruitment period won't set back your team with payroll work, for example.
Agencies also keep a close eye on trends that can help maximize your recruitment efforts. That might be the best job listing site or a popular screening method. So you will be able to tap into that knowledge.
Outsourced Recruitment: The Disadvantages
Outsourced recruitment undoubtedly has lots of advantages. But it's important to address some downsides of moving to that model.
For some businesses with an established setup, it means losing the control you have and passing that to another team. That takes time, and you may worry about the lack of control over future recruitment processes.
If you hire for specialist roles, you may need lots of in-house knowledge to hire for these positions. That information can be helpful when writing a job profile and scanning resumes.
You may also worry that a recruitment specialist doesn't reflect your business culture and won't allow potential candidates to see the real you. You'll need to ensure any outside team gets to understand the nuances of your business so that they feel like an extension of your team.
In-House vs. Outsourced Recruitment Team: Making a Decision
Before deciding whether in-house or outsourced is best, you must assess your company's unique situation.
Assess Your Current Recruitment
With that in mind, begin with determining how your recruitment works currently. Look at your capabilities and any weaknesses. It's also worth stress-testing this.
For example, could your in-house team cope if you have a sudden demand for large-scale recruitment? How quickly could they respond?
You should also ensure you have clear recruitment goals for your business and add KPIs to these to make them measurable. For example, perhaps you have a target for how long it takes to hire someone.
You might also have specific goals, like the number of highly specialized roles you manage to fill.
Identify Gaps
Next, evaluate how well your current recruitment meets your business goals. Look at the quality of candidates, retention rate, and costs of each hire. That will help you analyze the cost-benefit of moving to an outsourced model.
Suppose there is a cost-benefit to moving to outsourcing, and it helps you meet your recruitment targets. In that case, your next step is to outline your expectations from an outsourced model.
In-House vs. Outsourced: Transitioning Between the Two
Suppose you decide there are benefits to moving to an outsourced model. In that case, you'll need a plan for transitioning from one to the other. It will help you realize more of the advantages.
Outline Your Immediate Goals
Start by outlining your goals from recruitment. You might want to consider long-term goals plus any immediate objectives, like a current recruitment drive.
You should also think about specific areas for improvement. For example, perhaps you have a low retention rate for new hires. You can ask your new recruiting partner to devise a strategy to help improve this figure.
You'll also want to contemplate the types of roles you'll be recruiting. That will help you find an outsourced partner who perfectly matches your needs.
Create a Communications Plan
Don't forget to communicate your plan internally. Stakeholders and employees will benefit from understanding why you are making the transition and when it will happen. Explain the advantages they will see in their departments and their role.
When you have selected a recruitment partner, make sure you set up a communications channel. Have dedicated people on your side who can help manage that relationship. A face-to-face meeting at the start is also a good idea.
Managing the Partnership
It's vital you make the most of your new partnership. Here's how.
Consider How to Align the Teams
An effective way of outsourcing is to consider your recruiter as a partner rather than a third party.
It's a way of forming a more collaborative approach. That will help you get the most from the relationship and maintain the control you need over certain aspects of recruitment.
Building a partnership requires three things. First, excellent communication. Build that relationship from the start and be as transparent as possible when talking.
The second is strategic alignment, which requires goal setting. Your recruitment partner must have a clear idea of your recruitment goals.
And the third is performance monitoring. That means reviewing the effectiveness of your recruitment. You should do that regularly.
Ensure your goals are relevant, measurable, and specific so you are objective during this process.
Use Technology
You should also make the most of modern technology. It will help you with all three of these goals. For example, you can use collaborative software to monitor recruitment efforts.
The recruitment company may also have tools to help you get the most from this partnership. Applicant tracking systems are a good example. You should also be open to new ideas and innovations, like using AI technology to screen CVs.
Embracing cutting-edge solutions will help you stay competitive with your recruitment efforts. That is important for meeting turnaround times and winning over candidates ahead of your competitors.
Considering a Hybrid Model
If you aren't ready to move to an outsourced approach or have reservations, the hybrid model is another option. That's helpful when transitioning between one and the other. Alternatively, you can use it to help balance your need for in-house input.
With a hybrid model, you can exploit the advantages of both choices. So, to make the most of this model, you need a clear idea of your strengths in-house and help preserve them.
Simultaneously, an honest assessment of your weak spots will help you plug that gap with an outsourced model.
For example, you may be skilled at recruiting for short-term positions. However, you may not have the in-house expertise to source candidates for highly specialist positions.
If you opt for this model, set aside intervals in the year when you carry out an assessment. It may be that your company has changed in that time, and one model's advantage now outweighs the others.
Review your partnership plus your in-house team, monitor the metrics, and ensure it delivers the recruitment goals you need as a business.
Finding a Recruitment Team That Delivers
As you can see, an outsourced recruitment team has many advantages.
But to make the most of those benefits, it's worth having a coherent strategy for your hiring process. You should also take the time to find a partner who offers synergy and helps you hit your recruitment goals.
At Hire Velocity, we have created an innovative solution to support your hiring efforts. At the heart of that model, we work closely with your team's recruitment goals and business objectives. To find out more, book a call with one of our recruitment experts.
