In-House Recruiter, Agency or RPO? How to determine which choice is best for your company’s recruiting needs

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Founder and CEO, Recruit Gyan. Passionate about helping tech startups and other companies onboard top talent with DE&I focused strategies.

Finding and retaining top talent is critical to the long-term sustainability of any business. This is especially true today, as business leaders need to recalibrate after being shaken by the pandemic and the recent economic downturn. In the future, I see a more focused effort to avoid annoying recruiting errors.

When your company is ready to hire for new roles, you can use an in-house recruiter or partner with a recruitment process outsourcing (RPO) agency or provider to meet your recruiting needs. Each option offers different benefits, and the most strategic choice will depend on your company’s unique situation.

Contents

Internal versus outsource

Benefits of in-house

An internal recruiter understands the company and its culture. They are well placed to determine which candidates are solid for the long term. Because they work directly with managers to understand their current and future needs, they can develop a longer-term hiring strategy.

Disadvantages of internal

If you’ve created a role for an internal recruiter, they’ll receive a salary and benefits regardless of whether the company needs to fill a new position. If you’ve delegated hiring responsibilities to existing team members, it imposes on their ability to perform the job they were hired to do.

Benefits of outsourcing

External recruiters are experts in the hiring process. They know better what they have to offer for a competitive compensation package and salary range. Because many agencies specialize in a specific industry, they understand the technical skills required to fill a role. I’ve also found their systems to be generally efficient and they’ve built up a pool of passive candidates who don’t look at job openings.

Disadvantages of outsourcing

An agency can contribute to a higher turnover if the main goal is to fulfill a role. If the agency works with multiple companies, your company may not get the personalized attention it deserves to find a solid match for your nuanced culture and long-term needs.

Determining which option works best for your business: four questions to ask yourself

Four questions will help you determine which option best meets your business needs.

1. What stage of hiring is your company currently in?

Think about your hiring needs for the next two quarters. Ideally, you should start the hiring process now to fill a position for a future need, as the hiring cycle is between six and eight weeks. Finding the right person for more challenging roles can take up to 12 weeks.

If you expect to fill 10 to 15 positions, it probably makes sense to hire an in-house recruiter. It’s strategic to hire someone who can give your recruiting needs their undivided attention.

If you need to hire three to four functions, it may be more beneficial to work with an agency. You only pay for hiring services if you need to fill a position. They can also objectively help you prioritize your recruiting needs to maximize the impact of new team members.

2. How much bandwidth does your team have to contribute to the recruitment process?

The recruitment process requires a significant investment of time and resources. It can impose on your existing leaders if you delegate hiring responsibilities to them. It is usually not their expertise, and it diverts their attention from their job responsibilities.

However, a full-time in-house recruiter is more likely to be motivated to find the best match for the positions because they are personally invested in the company. They also require accountability because they receive a salary.

On the other hand, working with a recruitment agency can save your team time and minimize stress as they operate within their field of expertise. It may not be profitable if the agency charges by the hour or if the candidates they send you are not in line with what you need. You don’t want to work with an agency that sends you quantity over quality, and you want them to do due diligence.

3. Which option best fits your company, culture, mission and values?

In many ways, an in-house person has the advantage because they really know your business inside out and don’t juggle other customers.

However, if your company has never hired anyone, you may not yet have the structure to conduct thorough and efficient interviews, and this will not reflect well on the company. A good agency uses a proven system to find and fill roles. They can also help set up your recruiting structures so you can hire internal staff in the future.

If you’re a tech startup or a new business, you may not have built a reputation yet. A recruiter can be a good ambassador, reaching candidates who otherwise wouldn’t respond to a company they’ve never heard of.

4. Does your company have the resources to make the most of an in-house recruiter?

Agencies and RPO providers are investing in technology to streamline hiring steps that can be automated. This frees up time for the steps that human relationships require, such as interviews.

These tools can help you build a data-driven process so you understand why candidates aren’t making progress in the hiring process and how you can better target the candidates who best fit the roles you need. You will be better able to make informed decisions because you will be more informed.

Whether internally or externally, the best recruiters have the skills of a matchmaker. They find the right candidate for the right role, who owns the vision and helps your company achieve its mission.


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