Recruitment Agencies vs. In-House Recruiters – Which is Better?
Recruitment is the cornerstone of creating successful teams.
Unfortunately, there’s a significant lack of talent in areas like ITC, media, finance, and business services.
This deficit forces companies to re-adjust their recruitment process from the ground-up.
In this article, we’ll look at the two main options for hiring new employees – recruitment agencies and in-house recruiters – to determine which is superior.
Recruitment agencies (sometimes called employment agencies) are third-party organizations that match job candidates with potential employers.
They can be private or publicly funded and specialize in one industry or serve as general recruiters. Some recruitment agencies (called executive agents) only focus on filling the highest-paying senior executive positions which aren’t advertised to the public.
Employment agencies have been around since the 19th century and continue to play a vital role for businesses today.
- Recruitment agencies tend to work fast. Most of them are paid via commission for every filled position, so working fast is in their best interest. This makes recruitment agencies ideal for filling urgent openings.
- Agencies also have access to vast amounts of candidates from their applicant tracking system (ATS). They can reach out instantly and sometimes arrange interviews in a matter of hours.
- Highly-specialized agencies focused on filling positions in one or two industries have amazing insight and often know who can be a strong industry fit.
- Paying a recruitment agency costs less in the short-term than keeping an in-house team on payroll. Also, since recruitment agencies are paid via commission, organizations can spend the majority of their hiring expenses after they’ve found and hired their ideal candidate.
- Some agencies can be perceived as “salesy” or “pushy.” This isn’t always the case, and it has to do with company culture more than anything. If the recruiters are paid low commissions, sometimes they don’t have a choice but to push candidates hard.
- Recruitment agencies are more expensive in the long-run for companies with a steady stream of job openings that are being filled constantly. Paying commissions for each position can quickly add up.
- Non-specialized employment agencies can lack a solid understanding of all the requirements for specific positions. In most cases, they’re only good at filling more general positions.
As with all other business partners, recruitment agencies need to be researched in detail. Only go into business with agencies that have outstanding reviews from their employees and other business clients.
In-house recruiters or recruitment teams are employees of an organization who specialize in finding candidates for job openings within the company.
These recruiters typically work standard hours and get paid a flat fee plus a bonus for filling specific positions. Because they are employees of the company, they get all the different benefits the law may require from employers like paid vacation leave, childcare, etc.
Some businesses don’t have recruitment teams, and they transfer all of the recruitment functions to their HR department.
- As employees of the company, in-house recruiters are more aware of the company culture. They have a much better feel for who’s going to be a great company fit.
- In-house recruitment can be a lot cheaper for growing businesses or businesses with a high employee turnover rate. An in-house recruiter can fill 5, 10, or 20 positions a month and receive the same salary plus a bonus in some cases. Recruitment agencies will charge a commission for each hire separately.
- These recruiters also tend to be more meticulous when choosing job candidates since they might be working with some of them in the future.
- In-house recruiters understand administrative procedures for hiring and onboarding employees in their organizations.
- Since they’re employees of the business, in-house recruiters that build quality relationships and provide an exciting hiring process for candidates can do wonders for the employer’s brand and recruitment marketing.
- Recruitment teams are less cost-effective for businesses that have a small number of job openings. In-house recruiters are standard employees, and the company has to comply with all the regulations concerning employers, like paying a salary plus benefits regardless of how much work their recruiters do each month.
- Internal recruiters often don’t fill job openings as fast as recruitment agencies.
- In-house teams take time to set-up, accumulate candidate data, and build relationships with candidates.
So, which is the better choice – recruitment agencies or in-house recruiters?
Тhere isn’t a clear winner or loser when it comes to deciding between using a recruitment agency or hiring an internal team.
The decision depends on specific business needs and, most often – on what the business can afford.
If you need to fill a position as quick as possible or you don’t want to go through the hassle of hiring in-house employees, recruitment agencies are the best options.
On the other hand, if you have a steady stream of job openings that your organization regularly fills, building an in-house recruitment team will become a necessity.
Often the option to use recruitment agencies for specific positions and internal recruitment teams for others can be the best possible solution.