Benefits of an in-house recruiter vs. an external agency
Thursday, 29 November 2018
For a successful business, few things are more essential than having a team with the drive, skills and passion to ensure a company stays on top.
That's why it's vital for organizations to recruit new talent with the utmost care and consideration.
At first glance, using an external recruiting agency can seem like the best and fastest way to get the most well-suited professionals for your company. After all, recruiting agencies, with their streamlined approach and impressive array of contacts, are experts in hunting for the strongest hires.
The other alternative—having an in-house recruiter on staff to recruit top talent—can feel like an unnecessary HR expense. The internal recruiter will spend days going through dozens of applications and resumes, as well as lengthy interviews, which can all seem like a waste of money and time for a business trying to work within a tight budget.
Probe a bit deeper, however, and compelling reasons emerge as to why relying on an internal company recruiter may be a business's best option when it comes to hiring— and retaining—the right people.
Different end goals
One of the main reasons to consider using an in-house recruiter is that an external agency's goals may not align with your company's best interests. A 2018 North American Staffing and Recruiting Trends Report by Bullhorn, a company that provides recruitment software for staffing and recruiting, analyzed the top three important metrics recruiting companies use to measure success. The report found that customer satisfaction came in as third, with only 36% of respondents saying it was the most important gauge of recruiting success (total job orders filled was rated as the most important metric).
These findings are important because they underscore some crucial differences between a recruiting firm's and an internal recruiter's priorities. Whereas agencies make money when they fill a position, an organization's primary goal when hiring is getting the best candidate for the job, not merely filling a position.
Better control of overarching hiring metrics
According to Ketan Kapoor, CEO and co-founder of Mettl, an HR technology company and leading talent measurement firm, what makes an in-house recruiter so valuable is that their selection process can be diligently focused on two main achievements.
“You can clearly define and develop two clear metrics for an in-house recruiter: High on-job performance and low attrition rates," says Kapoor. “Given that external recruiters handle multiple requisitions for multiple clients, they may not stick to your key parameters. An internal recruiter, on the other hand, can work exclusively on his or her company's primary concerns and devote time to improve the above two metrics, which will translate to a growing organization and better serve the company long term."
Understanding a company's specialized needs
Internal corporate recruiters tend to be more specialized because they are working for one company within a specific industry. They are familiar with the obvious and not-so-obvious qualities that a new employee should possess to succeed within the organization. Agency recruiters, on the other hand, tend to be generalists because they hire for so many different companies in many different industries.
This insider knowledge helps in-house recruiters develop pertinent and probative interview questions thanks to a thorough understanding of the competencies a new hire would need. A generalist from an agency simply can't duplicate this detailed, targeted hiring approach.
Understanding a company's abstract needs
A good recruiter knows that it's not just a company's concrete hiring needs (specific skills and deliverables) that matter. Because they work within the company, on-staff recruiters have a familiarity with some of the more intangible aspects of what makes the business thrive and what makes its people work well together. It's a familiarity that no outsider can possibly understand.
“An internal recruiter has a better grip on a company's values and culture," says Kapoor. “It's not just about what technical skills a candidate brings to the job but whether their work style and people skills will also mesh well with the office culture. This is something only an insider can truly gauge."
It seems obvious that hiring a recruiting agency would be much cheaper than having a full-time recruiter on staff. Yet the numbers show a different story. Professional external recruiters typically work on commission, and when they find a successful candidate, the recruiter receives a percentage (usually 20-30%) of the first year salary of the candidates they place. Depending on the hire's position (which is often in upper management if a professional recruiter is used) the fee could run anywhere from $20,000 to $30,000.
The average salary of an in-house recruiter is $51,349. While that is more than the cost of using an external recruiter one time, an internal recruiter may hire dozens of employees a year, potentially saving a company tens of thousands of dollars. If you also factor in that the in-house recruiter may make better hires because of their familiarity with the needs of the business, then you are also saving money by not having to go through the hiring process as often.
The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial advisor about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.
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