Agency Recruitment vs In-House Recruitment - What’s Best for You?

Agency Recruitment vs In-House Recruitment - What’s Best for You?

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almost 2 years ago

by Moestafa Rkhaoui

Agency Recruitment vs In-House Recruitment - What’s Best for You?

Agency Recruitment vs In-House Recruitment - What’s Best for You?

Business recruitments play a critical role in successfully operating a business and achieving sustainable growth. The speed, effectiveness, and overall quality of recruitments are essential from both the market and the candidates' perspectives. A business needs an effective hiring process if it is looking to build a strong employer brand or safeguard itself from recruitment challenges. Below we define in-house recruitments and agency recruitments. We will also discuss why outsourcing recruitment to specialist agencies is the best choice for your business. Let’s get started.

In-House Recruitment

In-house recruitment is an internal business operation involving hiring staff and managing all the associated processes. For in-house recruitments, most businesses hire full-time employees with the relevant skills and expertise to employ the right fit for the company and provide related management services.

Recruitment Agencies

Recruitment agencies are expert recruiters that provide both generic and specialized recruitment services. The agencies are top-rated among several small, medium, and large companies. The need for expert recruiters increased significantly in the post-pandemic era due to challenging market conditions. The year 2022 forecasts healthy growth in the recruitment industry, which is excellent news for businesses and their recruitment partners.

Services of Recruitment Agencies

A recruitment agency will provide the following services:

  1. Creation of job description

  2. Running ads for the recruitment

  3. Performing an expert talent hunting

  4. Dealing with inquiries and applications

  5. Shortlisting potential prospects

  6. Verifying references

  7. Conducting skills tests

  8. Shortlisting candidates to employers

  9. Handle all recruitment documentation

  10. Helping in negotiations

  11. Advise clients on recruitment matters

Note: Recruitment agencies vary according to their services. Your recruitment partner may not be responsible for one or more of the above-mentioned services.

Benefits of Agency Recruitment

Industry Expertise

Most businesses, especially start-ups, are exposed to high recruitment risks. Not only do they fail to set up the right job, but they also hire the wrong person. According to Small Biz Genius,45% of businesses have admitted that they failed to find candidates with the right skill sets in 2021.

The most crucial benefit of hiring a recruitment agency is their invaluable industry experience. They can help businesses identify the best value-creating job options and the best fit for that job. They can determine the best individuals with the proper skill set and relevant experience.

Some recruitment agencies have international exposure and complete access to various candidates. Businesses that look to grow beyond one country and hire foreign talent can acquire the services of such recruitment agencies. Furthermore, if a company can integrate remote candidates into its workforce, recruitment agencies will be able to locate and hire both local and foreign workers.

Attracting Quality Talent

Hiring talent is one of the most difficult challenges for recruiters. A study by Thrive My Wayshows that nearly 76% of recruiters have admitted that attracting high-quality talent is even more difficult than hiring. The most common challenges with attracting high-quality talent include:

·Businesses fail to stand out in the market when demand for specific talent groups is high and their supply is limited.

·A shortage of qualified professionals such as auditors, doctors, and lawyers occurs frequently. Most candidates prefer working with big companies, which leaves small businesses in a poor position.

·Businesses fail to provide a positive candidate experience which is undoubtedly a key to attracting quality talent.

Recruitment agencies solve all of the above-mentioned issues. They are experts with advertising and promotions and have the right tools to hook quality talent. They also have access to a massive subscriber base, including various prospective candidates with unique skills, qualifications, and job experience. Lastly, these agencies provide a great candidate experience from screening to recommending them to businesses.

Compliance with Recruitment Laws

Businesses operating in the US must comply with all Employment and Labour Laws. The most common categories of labor laws outlined by the US Department of Labour include:

  1. Wages and hours

  2. Workplace health and safety

  3. Workers’ compensation

  4. Employee benefits security

  5. Unions and members

  6. Employee protection

International businesses registered and operating in multiple countries must comply with each country's unique recruitment laws. Hiring recruitment agencies can help enterprises to ensure that they comply with all employment-relating regulations.

Fast and Efficient

Poor recruitment is a serious concern for most businesses yet widespread. Slow and inefficient recruitment processes produce a massive business risk. The most common reasons for poor recruitment include:

  1. Lack of clear vision, mission, and strategies

  2. Poor risk assessment

  3. Failure to Integrate new technologies along with an overall poor recruitment infrastructure

  4. Lack of specialist skills and experience

  5. Focusing on ineffective growth metrics rather than moving toward value-driven objectives

Recruitment agencies can advise businesses on addressing the issues mentioned above and take the workload regarding recruitment. These agencies update their processes with the latest technologies that improve hiring speed and efficiency and thus increase recruitment quality. Furthermore, they pay close attention to new market trends and adaptations. Therefore they can focus on their core operations and competencies. Agencies handle all recruitment matters and enable their clients to focus on other essential business operations.

Cost Effective

Effective recruitment is a laborious process that comes with lots of challenges. It must be fair, fast, and targeted in nature. Businesses need a lot of time and resources to learn and effectively perform this operation. Some companies go even further and spend their resources on building a strong employer brand. This luxury is not available to all businesses, especially smaller firms. Thus, an in-house recruitment division adversely impacts a business's growth potential.

Thrive My Waystats show that a business loses an average of $14,900 on every bad hire and if a company continually engages in poor hiring, its productivity drops by nearly 36%.

Recruitment agencies solve this issue and provide their clients with a hassle-free recruitment service. The most common direct and fixed expenses saved by recruitment agencies include:

  1. Job postings and advertising costs

  2. Screening and interviewing costs

  3. Reference checking costs

  4. Administration and documentation charges

Examples of variable and indirect expenses saved by recruitment agencies include:

  1. Training and development costs

  2. Handling costs related to disciplinary actions

  3. Temporary staffing costs

Business Growth

A successful business is a team/group of individuals with the right skills, experience, and attitude towards value creation. Recruitment is, therefore, a key that can be a critical success factor (CSF). When a business acquires quality recruitment services, it ensures that it safeguards itself from the threats posed by poor in-house recruitments.

A great benefit of hiring professional recruitment agencies is that they can advise new businesses on adopting recent trends that enable business growth. For instance, a 2015 report by McKinseystates that enterprises that promote ethnic diversity have a better financial performance than the industry average.

All the benefits outlined in this article can enable a business to compete and grow healthily and sustainably. These benefits are available only because of outsourcing recruitment to professional agencies. Understanding that outsourcing other business operations can be quite as productive as outsourcing recruitment processes is essential.

Flexibility and Adaptability

Flexibility in recruitment services refers to a hybrid hiring model that involves recruiting both temporary and permanent workers. Businesses need to be flexible with their hiring processes because of the following reasons:

  1. Building a mix of temporary and permanent workers allows businesses to reduce their fixed expenses. The wages of temporary workers can be categorized as variable expenses. These expenses occur when a company needs specialist services for a short period.

  2. This model provides job security to permanent workers who can help improve the retention rate of a business.

  3. Flexible recruitments allow businesses to test specialist talents without long-term financial or non-financial commitments.

Agency recruitments are far more flexible and adaptable than in-house recruitments. The reason is that they have a vast pool of temporary workers available for short-term employment. It is relatively easy for such agencies to attract and retain these workers compared to other businesses. This is because professionals and experts continually rely on recruitment agencies to find better clients.

SaaS Talents –What do We Offer to Our Clients?

SaaS Talents is a recruitment agency that helps SaaS businesses in the Start-up, Growth, and Maturity stages quickly find and successfully onboard commercial SaaS sales talent, executives, and interim professionals internationally.

Our mission is to help SaaS businesses build high-performing commercial teams to reach their revenue goals and milestones. We hope by doing so, we can empower companies to focus on their SaaS solution and mission without being distracted by recruitment challenges. We partner with early to growth-stage SaaS companies to hire Sales, Marketing, and Customer Success talent. Whether your SaaS company is Pre-Seed Funding or Series C Funding, we can help your team grow fast. We do this by using various HR technologies and recruitment processes to screen the best candidate for your company.

If you want to avoid the trouble of in-house hiring, contact us to source the perfect candidate!

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