Outsourcing vs. In-House Recruitment: What to Choose?
At some moment in the journey of scaling a business, you reach a point when you have to choose between setting up in-house recruitment or outsourcing the process. What are the merits of building your own recruitment team? What benefits do you get if you go for outsource recruitment instead?
You might think that as a recruitment agency, we have a slight bias here... but in fact, there are good reasons for going either way, depending on your needs.
In this article, we’ll run you through the advantages and disadvantages of each option.
What is in-house recruitment?
Well, of course… in-house recruitment means you get one or more full-time, payroll employees who recruit people exclusively for your company. The point is that the recruiters are part of your company, which means they can be better equipped to find the right fit for your unique culture and hiring needs.
What is recruitment process outsourcing (RPO)?
In recruitment process outsourcing, you rely on an external organization to cover some or all hiring processes. For example, external recruiters may only work on sourcing and screening candidates. Or they can also take responsibility for workforce planning, negotiating job offers, and onboarding your new employees.
Pros of in-house recruitment
An in-house recruitment team is made up of employees who are fully immersed in your company. This comes with benefits you may not always get from an external team.
Recruiters you can control and trust
Because in-house recruiters work solely for your company, you can control their priorities. You can set the workplace standards and the ways they run your recruitment campaign.
Since you’re not competing with other clients for your recruiters’ attention, you can also trust them to put the welfare of your organization first.
Since in-house recruiters are familiar with your company’s culture and how you do things, they won’t end up stepping on anybody’s toes. They’re also in a better position to collaborate with other departments, making it easy to come up with a recruitment strategy to meet your hiring needs.
Your very own talent pool!
This is a big one: using in-house resources for hiring allows you to build a talent pool for future recruitment. Those who didn’t make the cut in one campaign can still work with you at another time or in other capacities. You can keep a database of shortlisted candidates, meaning that your recruitment campaign will give you more than just a few immediate hires.
Cons of in-house recruitment
While it’s great to work with a team that fully understands your company culture, it’s not without its disadvantages.
The problem with any in-house hire is that they’re expensive to acquire and maintain. You’ll generally have to spend a lot of time and money on onboarding. Plus, you have to set your new recruiter(s) up with tools like computers, desks, and office supplies. That’s before we even get to office space, compensation, and benefits.
Too much time on employees’ hands
Having one or more full-time recruiters makes sense when you’re scaling your business. But what happens when your business hits a plateau or downtime and you no longer need to hire people? You end up with unnecessary expenses and idle resources.
A lack of fresh air
As they’re immersed in your company culture, in-house recruiters may not have anything new to bring to the table. People from outside your organization bring unique perspectives that can boost your recruitment efforts. Working with an external team gets you second opinions and expertise that can bolster your existing knowledge assets.
Pros of recruitment process outsourcing
So what about RPO? Working with external recruiters lets you tap into resources that are not readily available in your own organization.
Done in no time
With the right choice of agency, your team won’t have to spend too much time closely managing your recruiters. Reputable agencies like MagicHire have robust processes and technology to reduce the time-to-hire and provide high-quality results. They also have a vast existing talent pool to dip into to speed up the process.
Won’t break the bank
Overworking your recruiters during a hiring surge can result in less-than-stellar results. A recruitment agency lets you temporarily bring more people into your campaign. You won’t have to hire full-time employees who may not be productive during recruitment downtime.
That goes for resources, too. Recruitment has its own tech, just like any other sector. Working with a recruitment agency gives you access to this without blowing your budget.
Work with champions!
Recruitment process outsourcing companies are made up of full-time recruitment professionals who have earned specialized degrees and certifications. More importantly, they’ve gained in-depth industry expertise from working with many different clients over time. They’re well-informed of the latest recruitment technologies and are ready to confront challenges that may arise during a campaign.
Cons of recruitment process outsourcing
You can work with the best RPO firm and still experience drawbacks, mostly because you’ll be losing out on the benefits of having your own recruitment team.
Recruitment process outsourcing companies work with many clients. This means you may have to vie for their attention. Moreover, external recruiters may not be as dedicated as in-house employees when it comes to ensuring your company’s success.
Working with an agency also means giving up control over a huge part of the recruitment process. This can be discomforting if you are used to a certain way of doing things.
Possible communication blunders
Because external recruiters are not immersed in your company, they may not fully understand your culture. This can lead to miscommunication. In the worst case, you may end up with a candidate who sticks out like a sore thumb in your company.
It gets even worse if you’re working with an agency that isn't familiar with your country’s culture, as language and cultural differences can make communication a tad more challenging.
Exchanging sensitive information is part and parcel of working with an RPO firm. This exposes your company to security risks. As a result, you have to make sure you’re working with a recruitment agency that’s equipped to address your security concerns. This problem gets solved once you and the RPO firm have established a high level of trust.
In-house vs. outsourcing recruitment: which one’s for you?
So far, this might have felt like a game of “Yes, but… .” Working with an agency lets you meet your recruitment needs on demand, while having your own team allows you to build the skillsets of your workforce. An in-house team is costly to build and maintain, while outsourcing comes with communication challenges.
So here goes: which solution is best for your company?
When to consider in-house recruitment
In short, you should go for in-house recruitment if:
- You have enough resources to sustain a sizeable workforce
- You foresee a steady need for new hires in the future
- You’d like to have your own talent pool
- You’d like recruiter(s) who know your company’s culture inside and out and are adept at communicating with stakeholders
When to consider the recruitment process outsourcing (RPO) model
On the other hand, recruitment outsourcing (the RPO model) is your best choice if:
- You’re only just establishing your business, and you’d like to pour more resources into strengthening your core processes and competitive advantage
- You lack expertise in recruitment, and you’d like to get better at it
Combining an in-house team with outsourcing
If things still aren’t clear, the good news is that in-house recruitment and RPOs don’t have to be mutually exclusive. There are cases when it’s best to combine both approaches.
For example, you can bring in an outsourcing team to help your busy in-house recruiters during a hiring surge. Working with an RPO firm also helps invigorate your in-house campaigns with fresh new ideas. The external team can pass on their expertise to your recruiters.
You can also bring in external recruiters to help you set up a recruitment team if you don’t already have one.
The bottom line
When it comes to choosing between an in-house team and recruitment process outsourcing, it’s not a case of one size fits all. An in-house team is great for established companies with predictable hiring needs. At the same time, a recruitment agency is ideal for growing companies that need to scale quickly without breaking the bank.
In some instances, you won’t even have to choose between the two. Working with a recruitment agency while building or retaining your own team can help you benefit from the expertise of an RPO firm — all while beefing up your own workforce assets.
And if you decide to go for recruitment outsourcing? Try MagicHire. We have over six years of expertise and more than 60K candidates in our talent pool. Or, if you’re already working with an outsourcing partner, you can consider multiple recruitment agencies. Our team of experts is waiting to help!