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Which is best: Outsourcing or In-House Recruitment?

Published 22nd September 2022
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Which is best: Outsourcing or In-House Recruitment?

Published 22nd September 2022

One of the main questions businesses will ask when commencing the hiring process is: which is best: outsourcing or in-house recruitment? It is important to understand the positives and negatives before deciding on the option to proceed with. As well as which option will help produce the best results and find the best employees, that will have a high level of productivity and success. There is nothing worse than hiring the wrong candidate and having to go through the process again, it wastes time and money. 

This article will aid you through this important decision making process. It will suggest the importance of both options: outsourcing candidates, also known as recruitment process outsourcing (RPO), as well as discovering which is best financially for the company, and the level of responsibility and control you want through the process.

Outsourcing vs. In-House Recruitment

Before making the decision, it is important to understand the facts of both options, which will allow you to understand which is best for your hiring needs. Below is an overview of the differences between hiring an in-house recruitment team and outsourcing with external agencies. 

1) Responsibilities 

Using an external company to aid you through the hiring process means a lot of responsibility would need to be handed over. This would be the perfect opportunity if there are more essential business matters to focus on, this is mainly for larger businesses. This can be seen as very beneficial as there is flexibility with regards to managing responsibilities. Within this process, the agents team up with your HR team, this ensures that there are still internal voices to aid this process to be completed to a successful level. In addition, the agents can support the HR team in the best workforce planning, training and development. Therefore, if your HR team is likely to be overwhelmed with the amount of tasks at hand, using an RPO agency is most likely the best way forward.

In-house recruiting are employees that are already set up under payroll, for your specific business. A benefit of using this team is they already understand your business culture and requirements for the job roles. Therefore, they are able to understand which candidate would be the best fit for the role.

2) Cost Saving 

Another key element to be aware of is the financial aspects. Using an in-house department for hiring means they will always be on the payroll, making this a costly decision. However, if you were to choose an external recruiting agency, it is likely to cut down on costs, due to having the option when to use them. Therefore, RPOs are likely to be best suited for smaller businesses that don’t have the funds to employ a whole department dedicated to recruitment and employment. 

3) Control

By using an outsourcing agency means a lack of control during the process, another thing to think about is an RPO is likely to have other clients. Their time will not all be dedicated to your company alone. Whereas, in-house recruiters will have complete control over the recruitment process, the positive of this is they are a team within your business. You will be able to review the team's performance, and would be able to have a say in the process. 

Positives of Recruitment Process Outsourcing (RPO)

  • No monitoring is needed, if you choose the correct outsourcing team they will have the right amount of experience and knowledge to complete the job to a high standard.
  • Within this process you will be able to access high quality recruiting processes, WITHOUT spending masses of money.
  • Using an external team means not having to pay salaries, employee benefits, as well as not spending money on a department when they are not needed, during recruitment downtime.

Negatives of Recruitment Process Outsourcing (RPO)

  • Less control over the process.
  • Lack of communication can hinder the process, due to the outsourcing team not understanding the role and business culture. Further leading to hiring unsuitable candidates 
  • Having to share sensitive business information with external parties, this could risk sensitive information being leaked to competitors, so make sure you choose a company you trust.

Positives of  In-House Recruitment

  • They understand the business culture in more depth, due to working in the specific environment.
  • They are only focused on this business's employment needs - RPOs will have other clients.
  • There will be no sharing of sensitive information to external parties. 

Negatives of  In-House Recruitment

  • This can be a very expensive department to manage, especially if there are times they are not needed.
  • They have limited hiring knowledge, and are less likely to bring anything new to the table.
  • Limited networks and communications for sourcing the candidates, whereas RPOs will have extensive relationships with potential candidates and connections to find the best candidates.

The Bottom Line

It is important to digest the information above, as well as doing more research if you are still unsure in which direction to take. Ensure you understand what your business needs and can financially handle, before deciding on a recruiting option. 

For more information on recruitment services, and if you are interested in the Outsourcing strategy mentioned within this article check out our RPO page.

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