7 Reasons You Should Outsource Your Recruitment and 5 Reasons You Shouldn’t

With the dynamic business conditions and global competition, acquiring new talent goes beyond a job interview. It requires significant time and financial investment to build relationships with suitable candidates.

Recruitment Process Outsourcing (RPO) is gaining more traction across various entities. Some choose to outsource the entire process, while some outsource certain stages in the process.

Although it’s a strategic business move, there are both advantages and disadvantages. Let’s look at both sides to help you make the best decision for your business interests.

Reasons Why You Should Outsource Your Recruitment

For outsourcing to make financial sense, companies should consider outsourcing on a project basis. It helps these companies to:

  1. Reduce Costs
    1. The hiring process is expensive. It involves labor, advertising, recruitment technology, application tracking systems, and screening costs. Internal hires seem more effortless but are more costly and limiting in the long run.
    2. Using a recruitment agency combines all these costs into one lower price. The aim is to save time. It also reduces costs by streamlining the process and distributing the risks involved. There are minimal unnecessary hires, talent mismatches, and short staffing incidences.
  2. Focus on Core Business
    1. Even with dedicated HR personnel, recruitment volumes can be overwhelming. Hiring new team members diverts time and resources away from essential business processes. This can affect their productivity and ability to provide other essential services.
    2. Recruitment process outsourcing allows your team to focus on your business. This is achievable by delegating the duties to a third party.
  3. Improve Recruiting Effectiveness
    1. The global job market is very competitive. Identifying and hiring qualified candidates is often challenging if you’re looking in the wrong place or relying on ineffective hiring criteria.
    2. Outsourcing recruitment is a great way to improve the quality of hires. Recruiters can help you efficiently find the right candidates. They also have access and the ability to reach more candidates.
  4. Reduce Turnover Rate
    1. High turnover rates can be costly in terms of time, money, and productivity. It can be through reduced productivity, poor customer service, and reduced employee engagement.
    2. Poor recruitment processes also increase turnover rates through hiring unsuitable candidates. To address such issues, you can opt to outsource recruitment. It ensures you get vetted, better-qualified candidates who match roles and company culture.
  5. Handle Rapid Growth
    1. Companies with high growth rates or seasonality often find it challenging to meet recruitment demands. These fluctuations cause strain on existing staff. They eventually force companies to hire many people at once.
    2. Recruitment process outsourcing allows companies to balance labor demands with out affecting the business. External recruiters have more experience, dedicated staff, appropriate technology, and effective methods.
  6. Gain Competitive Advantage
    1. Start-ups and small companies often lack the resources to hire top talent in the industry. Recruitment firms help bridge this gap. They ensure smaller companies get the same skill level without overstretching finances.
  7. Build an Employment Brand
    1. A company’s credibility as an employer comes from various aspects of the recruitment process. Having top candidates increases the possibility of other competent candidates considering your company.
    2. External recruitment firms help to project a positive image of the company to both candidates and stakeholders.

5 Reasons Why You Shouldn’t Outsource Your Recruitment

  1. It’s Not Sustainable
    1. Recruitment process outsourcing comes at an extra cost. It means paying the new staff about 20-30% of the annual salary in the first 90 days. These additional costs increase the return of investment (ROI) while decreasing the existing HR team’s morale.It’s Not Sustainable
  2.  Outsourcing Recruiting Doesn’t Guarantee the Proper Fit
    1. An internal hiring team has intimate knowledge of your company’s objectives, goals, and culture. They are more likely to hire a candidate who is a perfect fit for the role.
    2. External recruiters may focus on hiring a new candidate fast, neglecting other core values required by the position. They are expensive and have limited effectiveness.
  3. Outsourcing Recruiting Leads to Missed Learning Opportunities
    1. When using external hiring firms, your team has no chance to get feedback and analyze valuable data. Monitoring the hiring process gives you insight into why top candidates drop off and why.
    2. This data plays a significant role in identifying your weak points and changing or improving the process. The missed learning opportunities can affect your business processes and brand image.
  4. Core Values and Company Culture May Not Be Well Portrayed
    1. External recruiting firms lack a complete perspective of your company. They are often unqualified to assess candidates based on your internal culture since they are also unaware. Additionally, it may cost you top talent if the hiring team inadequately conveys your company’s core values and business goals.
  5. Security Concerns
    1. When using external recruiters, there’s a plausible data security risk. Lack of confidentiality can expose your company to security breaches. The third-party has details of particular business processes, culture, and nuances, which poses a threat.

Conclusion

Outsourcing your recruitment has both merits and demerits. The ultimate decision depends on your specific needs and financial capability.