Outsourcing vs. In-House Recruitment: Which is Better?

One of the most significant challenges businesses experience is finding the best talent to maximize their business productivity. In this regard, they take measures, including hiring recruiters, to help in the hiring process. Usually, businesses can work with in-house recruiters or opt for the recruitment process outsourcing (RPO). So, have you ever wondered which method is suitable for your hiring needs? Note that in-house hiring and outsourced recruiting both have their benefits, and identifying the best probably depends on your recruitment project’s scope. 

Below, we help you understand the difference between working with RPO agents and in-house recruiters. We also add some pros and cons of each option so that you can easily decide on what will complement your hiring needs. 

Outsourcing vs. In-House Recruitment

If you have been trying to figure out which option is best for your hiring needs, we list below the difference between hiring an in-house recruitment team and working with external agencies. This is so that you can get insights into the best option suitable for your business.

1. Responsibilities

Outsourcing your hiring needs or RPO is a recruiting model whereby an employer transfers part of or all hiring responsibilities to a third party. Working with external recruiters means handing over all hiring responsibilities so that you can focus on other essential business matters. 

The best element about going for the recruitment process outsourcing model is that it is flexible regarding managing responsibilities. The agents team up with your HR team to ensure the hiring process is successful. In addition, they can help with guiding your team on the best workforce planning, building solid talent pools, training, and development, etc. So, if you feel like your HR team is overwhelmed with business management tasks, you may want to consider working with an RPO agency.

Regarding in-house recruiting, you work with hiring professionals who are already part of your business and are under payroll like other employees. They are permanent employees, and the best element of working with them is that they fully understand your business culture and specific hiring needs. Because of this, they are better equipped to find not only a suitable talent for an open position but one that will fit into your business culture. 

2. Cost Saving

Another element that differentiates outsourcing from in-house recruitment is the cost-saving aspect. You see, hiring an in-house recruitment team can be costly since you will add the recruiters to your payroll and employee benefits scheme. On the other hand, RPO agencies cut on costs significantly since you will only seek them whenever you have a vacant position. Simply put, working with external recruiting agencies can be the best option for small businesses that are skeptical about straining their resources. 

3. Degree of Control

Outsourcing your hiring tasks means limiting your control over the recruitment process. Besides, you will be seeking their attention most of the time since some of them will have tasks from other clients. This is unlike working with in-house recruiters, whereby you get complete control of the activities by delegating tasks and pointing out errors whenever you feel like they are underperforming. Suppose you can afford to work with both in-house and external recruiters, the better for the best results. While external recruiters focus on sourcing candidates, internal hiring professionals can focus on internal affairs and strategic initiatives. 

4. Expertise

While in-house recruiters understand your business requirements and have more potential to source candidates that complement them, they aren’t as experienced as external recruiters. You see, RPO agencies focus on sourcing candidates for different clients. This means that they have vast experience and solid connections in the market to find the most sought-after talent. Simply put, they are the best for sourcing candidates to fill senior positions. 

In-House vs Outsourcing Pros and Cons

Although many employers have their in-house hiring team that focuses solely on their companies, the need for outsourcing in recruitment depends on your project’s scope. Here are the pros and cons of using in-house recruiters vs RPO agencies.

Pros of In-House Recruitment

• They are focused only on your business hiring needs, making it easier for you to control them. You can set standards on how you want them to operate your recruitment campaign and trust that they will deliver within a set timeline.
• In-house recruiters are well-versed in how your business operates and the quality of employees to complement its culture. This makes communication easier and puts all participating parties on the same page. 
• Every business requires an excellent talent pool for its future hiring needs. In-house recruiters can help you build a talent pool by keeping a database of shortlisted candidates with the best qualifications.

Cons of In-House Recruitment

• They can be too expensive to manage since they are on your payroll and employee benefits scheme.

• They bring nothing new to the table, such as new hiring ideas and unique perspectives to boost your hiring efforts. 

• They do not have extensive networks and connections to source hard-to-find talent.

Pros of Recruitment Process Outsourcing (RPO)

Working with RPO agencies is beneficial in many ways, including the following:

• When you find the best external recruiters, you do not need to monitor their activities to get the job done. Note that there are plenty of outsourcing recruitment examples of companies out there with the right experience and knowledge to find you top talent fast. Simply choose a suitable one.

• You get access to the best hiring resources without spending a lot of money. Plus, no need to spend on salaries and employee benefits, especially during recruitment downtime when they are less productive. 

• RPO recruitment model exposes you to professionals who specialize in recruitment only and have built solid networks and connections to find the best candidates. 

• External recruiting agents must market your business to attract both active and passive candidates. This helps in building your employer’s brand.

Cons of RPO

• Less control, making it challenging for you to understand whether they are using the right recruitment procedures. 

• This can contribute to poor communication, especially if you work with an agent who doesn’t understand your business culture. This increases the likelihood of you hiring unsuitable talent.

• Working with an RPO agency means sharing sensitive business information. This puts your company at risk of getting exposed to competitors. So when choosing an external recruiter, make sure they are people you completely trust.

The Bottom Line

When it comes to figuring out a better option between in-house and external recruiters, it all comes down to considering what your business needs and can afford. For instance, small businesses or startups should consider working with external recruiters to avoid committing to additional expenses that might drain their business finances. Also, RPO agencies are best for filling senior or executive positions since they have solid networks and connections. In some cases, you can combine both methods so that your in-house team can learn essential tasks from external recruiters.