Recruitment – Outsource or In-House

Of all the business functions you could outsource, for many companies recruiting functions are not always at the top of the list but there are sound reasons to consider outsourcing in the same way as outsourcing other functions such as marketing. Here are a few questions to consider in helping to decide which approach is best for your company:-

1. Which approach will provide the best outcome in terms of quality of candidates?

Most companies agree that people and the skills they bring are a firm’s most valuable asset yet many companies compromise on the quality of the candidates they attract by not providing sufficient resources in time, effort or expenditure to the recruitment process, resulting in poor outcomes for the company and/or candidates and higher staff turnover which can be a hidden but very significant expense.

2. What resources are required internally to be an effective self-recruiter?

Having an HR Manager or HR department does not necessarily mean a company has the resources to be an effective recruiter of skilled people. These days an HR Manager’s primary functions are often to build a positive work culture, deal with conflict, ensure compliance, induct new employees, manage the workplace training program as well as often also doing payroll. These are all internally focussed activities and they are vitally important to the business. Recruitment is an externally focussed activity, requiring a depth of industry knowledge, identifying where the talent is and who is seeking a change.

A number of companies have recognised that the traditional HR Department model of recruiting no longer works in the modern world for this reason, and have subsequently developed a new section or department employing a team of Talent Finders whose job it is to acquaint themselves with the talent in the market and hiring according to the companies requirements. This can be an effective model but whether it is a fit for a particular company depends on the size of the company, the number of vacancies it expects to fill annually and how broad a skill set they will be required to employ. The reality is that to have an effective team of Talent Finders can be an expensive proposition for even large companies. The outsourcing option is an effective means of accessing talent finding skills only when required, and remains a variable cost, whereas an in-house team becomes a constant overhead cost to the business. It is interesting to note that even many of the larger multinational companies use outsourcing because of the realisation that their in-house teams cannot compete with specialists who are constantly operating in and therefore increasing their knowledge of the market.

3. How has recent technology changed the process of sourcing talent?

The advance of technology has improved speed and easy access to information, elements highly prized in a competitive environment.

The rise of online jobs boards, social media and the like have significantly changed the recruitment industry. Some believed that the easy access to information would result in a trend of more companies to conduct their own hiring. There appears to be no evidence that this is occurring and it is probably because increased access to information has significantly complicating the hiring process rather than simplified it. What recruitment consultants do that technology cannot is to match the information they have of the talent market with the specific requirements of the company they are recruiting for. A good recruitment consultant will actively gain an understanding of his/her client’s company, its culture and hiring needs and evaluate candidates, make judgements and offer opinions as to a candidate’s match with the organisation and its needs.