Outsourcing vs. In-House Recruitment: Which is Better?
You’ve probably wondered about the same thing as your competitors: Should you do in-house hiring or recruitment process outsourcing (RPO)? While both options have their merits, the decision mainly depends on the scope of the project. But before we get to that, let’s discuss what exactly RPO is and how it works.
Recruitment process outsourcing is a model where a company or an employer transfers all or a part of the talent sourcing and hiring responsibility to a third-party recruitment agency. The external service provider acts as an extension of a company’s HR department who takes care of all recruitment operations.
Both recruitment solutions, in-house and outsourcing, have their pros and cons. To help you decide what’s right for your small business, check out some of the key differences between hiring in-house and RPO.
Outsourcing vs. In-House Recruitment
Scope of responsibilities
The great thing about having an in-house HR team is that you get their undivided attention. On the other hand, RPO agencies can juggle many hats beyond recruiting.
- In-house – Your in-house team has the edge over knowing your company culture, industry fit, and specific hiring needs. They have multiple areas of responsibility, which can include duties like workforce planning and development, employee and labor relations, risk management, employee engagement programs, and recruitment, among others.
- RPO – External service providers can offer flexibility when it comes to managing responsibilities. They can provide guidance on effective workforce planning, employer branding, training and development, building long-term talent pools, and more.
They can fall behind in their recruiting assignments if your team already has their hands full of other HR responsibilities. Likewise, hiring can take away valuable time from their other HR responsibilities. If this is the case with your small business, enlisting the help of an RPO agency may be the optimal route for you.
From interviewing to training, hiring an in-house recruitment team takes extensive cost, time, and effort. Outsourcing is cost- and time-efficient since it keeps finances flexible, not fixed.
- In-house – Hiring new staff members doesn’t come cheap. Companies would have to face financial challenges with fixed HR expenses and even intangible costs like time to hire a full-time team. These are all on top of the compensation, benefits, training, and other overhead costs.
- RPO – Working with an RPO can cut your costs significantly as opposed to hiring in-house HR employees. Finally, you wouldn’t have to bother paying a monthly fee on LinkedIn and other recruitment platforms and tools. The RPO agency will essentially cover all the bases of your hiring needs while controlling recruitment spend.
If you’re a small company, it can put a strain on your resources to hire new team members on your own. A more cost-effective alternative for you could be outsourcing your recruiting needs.
The RPO model is designed to conveniently scale recruitment processes and resources up or down at a cost that won’t hurt your business.
- In-house – Hiring or building your own company’s in-house recruiters could come in handy when business is booming. But what happens when you realize you need to scale down after a few months? This could only leave your company with a dent in finances and a surplus of resources. Additionally, scaling your business up at short notice can be a challenge for an in-house recruitment team.
- RPO – Hiring the expert services of an RPO can help expand the size of your team at a comfortable rate. Working with an external service provider allows you to focus on more important business while ramping up your team.
Outsourcing provides a more scalable approach for small businesses compared to having an internal recruitment team of your own. If you’re thinking of scaling your small business, partnering with an RPO agency is your best bet.
Degree of Control
Control is crucial for small businesses. Outsourcing will not mean relinquishing control over your recruitment process. You will, however, have more limited power over a third-party recruitment team compared to an in-house department.
- In-house – You get more control over full-time employees because their sole focus is your small business. You can quickly delegate tasks and easily set priorities and workplace practices they can follow.
- RPO – Working with an RPO means you may be fighting for their time with other clients. When you outsource too many responsibilities outside, you might end up working with maintenance people who only keep the light on as long as they’re paid.
In some cases, RPO and in-house recruiters can co-exist. You can realign your in-house department’s responsibilities to focus on more strategic initiatives and internal affairs. A third-party recruitment team can focus on securing qualified candidates and hiring processes.
RPO companies specialize in the field of recruitment and human resource solutions. Their job is more than just screening candidates and filling job positions. They oversee the strategic recruitment process and design solutions that an in-house team may not be capable of.
- In-house – Surely, you wouldn’t hire an in-house recruitment team that isn’t an expert in their field. However, some may lack expertise in certain areas, such as managing all elements of the recruitment process, which is vital to your business’s competitive edge.
- RPO – A recruitment process outsourcing agency utilizes technologies that provide optimal audit trails, comprehensive management information, better analysis, forecasting, and reporting for strategic headhunting.
RPO agencies have broader knowledge and spend more time in the market to find the right talents for businesses. They know what an excellent candidate looks like. This means getting right on to business and reducing project delays.
Summing it up
There are instances that hiring one or a couple of in-house recruiters will do your company good. However, there are cases where you don’t have the time and resources to manage the demands of your business. And this is where a recruitment process outsourcing company like SuperStaff comes equipped with everything you need.
The only way you can attract the best talent in your industry is by having the most candidate-friendly recruitment process. An in-house team or an RPO team can do this for you. You only need to weigh in all the considerations to help you form the most logical and fitting decision that will affect your business positively.