Basics of in house recruitment
When you use in-house recruiters, you hire an employee to work as part of your HR team. In-house recruiters often have a wider range of duties, starting with planning and budgeting for new hires. They might help develop your company’s recruiting plan and work with your managers to anticipate hiring needs. In-house staff might also help with other administrative or HR tasks. This can be beneficial if you have a small HR team and need extra help.
Basics of agency recruitment
Agency recruiters work with multiple companies to find candidates for their openings, often working with several different companies simultaneously. An external recruiter typically handles only the recruiting part of hiring, sourcing and screening candidates who fit your current openings. An external recruiter might also help with candidate management and schedule interviews for you. It’s up to your company to determine your hiring needs, budget and other hiring decisions.
Cost comparison
Looking at the cost of in-house recruitment vs. agency recruitment helps you determine which option fits into your budget better. When you use a recruiting agency, you pay only when you need a candidate. If you only hire occasionally, an agency is likely the most cost-effective option because of this. The cost varies, but it’s typically a percentage of the salary for the position you’re filling.
If you hire an internal recruiter, you’ll pay the standard salary, which averages $50,133 per year, according to Indeed Salaries. You’ll also have benefits expenses for things like paid time off, insurance and any extra perks you offer.
Estimating your recruitment needs and determining the cost with the recruitment agencies you’re considering helps you compare the costs. Add your total cost of hiring an internal employee and compare that to the average you expect to spend on a recruitment agency to discover which one is cheaper based on your recruiting demands.
Recruitment focus
When you choose agency recruiting, the focus is often sales-driven. The agency recruiter gets paid for finding you a new employee. Once the job is done, the agency recruiter doesn’t have to continue working with the new hire, so they might not be as concerned with finding an ideal match that works with your company culture. They want to fill the position, earn their compensation and move on to the next position.
An in-house recruiter works only for you, so they’re more likely to focus on finding a good match. They’re typically people-focused instead of sales-focused. In-house recruiters often have more of a commitment to the company and want to find new employees who will stay long-term.
Understanding of job specifics
Agencies are experts in recruiting methods, and they often understand the technical aspects of jobs. This is especially true if the agency specializes in a certain industry or type of position. They become well-versed in what makes a good candidate on paper.
However, they might not have the company-specific knowledge that an in-house recruiter develops. As an employee, the internal recruiter understands the company culture well, so they can find candidates who complement it. In addition, they don’t have to learn about multiple companies like agency recruiters do, so they can fully immerse themselves in the organizational differences of your company.
Speed
Using a recruiting agency can be a faster way to fill your vacancies. Agency recruiters often have several candidates in the pipeline that are seeking jobs. They can quickly match those candidates with your needs to find the top options. Agency recruiting is a fast-paced career, and the recruiters are motivated to get the commission from finding you a match, so they often move faster.
In-house recruiters often take more time to hire. They might spend more time on the preparation phase, working with the manager to map out the needs and desires for the candidate to ensure a good fit for the company. If the company doesn’t already have a candidate pool, they’ll have to source all candidates from scratch, which takes more time.
Recruitment demands
Hiring a recruitment agency gives you more flexibility if you don’t have a huge, ongoing recruitment load. If your company is small with only a few vacancies per year, hiring in-house recruiters likely isn’t feasible. Simply call on your recruitment agency when you need help finding job candidates.
When you hire a full-time in-house recruiter, you need to have enough duties to keep that person busy year-round. If you don’t have enough for them to do, either specifically for recruiting or related to HR in some way, you’re likely wasting money on your recruiter’s salary and benefits.
Which option is best?
When comparing in-house recruitment vs. agency recruitment, the final decision depends on your needs. If you need to recruit occasionally, using an agency is often the most cost-effective option. If you have larger recruiting demands, hiring an in-house recruiter might be a better fit.
Your focus can also determine which option is better. If your recruiting goals focus on speed, an agency can be a better option. If you’re concerned about finding long-term hires that fit your company well and have a large enough demand for recruiting, an in-house employee might work better.
FAQs about in house recruitment vs. agency recruitment
How do you choose the best recruitment agency?
If you work in a technical or highly skilled industry, look for a recruiting agency specializing in that field. Their recruiters will better understand what makes a good candidate. Ask for a detailed outline of the fees and terms of the arrangement. Find out how many recruiters work for the agency and how much experience they have. Asking for references from other clients is another way to get feedback on agencies.
What should you look for in an in-house recruiter?
If you choose to hire an internal recruiter, look for recruitment experience, especially for companies in a similar industry or with similar recruiting needs. A proven track record of hires that match qualifications and a high employee retention rate can indicate a quality recruiter. Consider how well each candidate understands your industry or is willing to learn about it and consider how well they will complement your company culture.
How do you make the recruitment process more effective?
No matter which recruitment option you choose, communicating your needs clearly makes the recruitment process more effective. If you hire an agency that doesn’t produce good candidate options, shop around for a new agency. For internal recruiters, set expectations clearly and ensure they work closely with hiring managers.
