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Why an Internal Hiring Manager or HR Team Would Hire a Third-Party Recruiter

Outsourcing some or all aspects of recruiting makes excellent sense in certain situations — and in others, it does not. We get asked quite frequently, “Why should I pay a fee to a recruiter instead of handling the hiring myself?” Fair question. Honestly, what it most often comes down to is the monetary value of time.

Cost: Money vs. Time 

What is the best use of your workplace time, and what is the financial impact of your time on your business/company? These are critical questions to answer when it comes to any decision related to outsourcing. If your role directly impacts company revenue, or if you are a high-level company executive — is your time best spent working on tasks that take you away from the thing(s) that the business truly needs you to be doing daily? Should you use work time — or even worse, precious personal time — doing something you could outsource? What is the cost of your lost time on the company’s business development and growth goals?

When it comes to recruiting, the role of hiring often falls to a manager/leader who has plenty of urgent and business-critical things to do — things that help the company generate more revenue, operate more effectively, etc. Hiring is going to cost you, no matter what. Time is money, regardless of how you slice it. So is it a better use of time and money to keep everything in house, or does it make more sense to outsource recruiting support, either occasionally or entirely?

Let’s think about: 

• What is your company spending to post ads online? Have you studied the cost per hire of using online tools?
• What is the value of your time as an hourly breakdown? How many hours are you investing in recruiting, and what is that cost to the business?  
• Hiring a contingent recruiter means there is zero financial impact until a hire is made and someone begins work. 
• Honestly examine the definition of “best.” Recruiting professionals should be the “best” at what they do. They focus all day every day on delivering top talent quickly and effectively. That level of expertise should free up their clients to use their time to focus on the things that they do “best.” “Best” use of time is critical.

Impacts of Company Size

When it comes to the decision to outsource recruiting, needs and utilization certainly differ depending on company size.

Large Companies — 500+

Companies with 500 plus employees certainly have an internal Human Resources team and often a Talent Acquisition team as well. When it comes to companies and hiring-related staff headcounts of this size, the decision to outsource recruiting remains a cost vs. time analysis. On the cost side of things, an HR and TA team of five or more people might have close to a $500,000 payroll impact on a company per year. So why would an organization then agree to take on additional recruiting expenses? 

• First, large companies often outsource hiring in situations where they are seeking temporary or contract staff. An organization may only need additional team members for a specific project or a set period. Outsourcing to an agency and having those temporary employees on someone else’s payroll is a smart business decision.
• Additionally, a large company may reach out to external recruiters when they have a very challenging hire, which is often referred to in the industry as a “unicorn” or a “purple squirrel.” The person they seek is very niche and specialized and may not be scanning job boards or be found within a company’s network of connections. If a company’s internal recruiting load is already substantial and there is one particular job — or more — proving extremely difficult, it often makes sense to outsource. Use internal recruiting’s time on those positions that are most fillable.
• Also, if a large company is expanding rapidly and needs to hire a significant number of people by a predetermined deadline (end of year, end of quarter, etc.), they will often turn to outside recruiting resources for support. The priority in these situations is to meet the hiring goals successfully — and on time.

Mid-sized Companies — 50-500

Companies more in the medium size range, especially those on the smaller end of the scale, may only have one or a few HR professionals on staff, and little to no dedicated talent acquisition personnel. Generally, these mid-sized company recruiting teams do not have enough bandwidth to manage all components of HR while also overseeing recruiting effectively. There is only so much time in a day. 

• In these cases, it, of course, makes sense to outsource for “unicorn” roles as well as during times of compressed, bulk hiring, and/or when project-related temporary staff is required. No difference here as compared to large companies.
• A lot of companies in this middle range often have small, overburdened HR crews, and many of those teams might not count Recruiting among their list of “best” skills. When that is the case and recruiting pops up as a top, painful priority, it’s time to outsource.  

Small Companies — <50

Small companies typically don’t have any internal HR or TA, leaving hiring on the plates of managers who very definitely have other essential, “best” use of time responsibilities.

• A Sales Manager, for example, should be focused on developing revenue-producing staff members and closing deals as opposed to reading dozens of applications and potentially off-target resumes. In that case, this hiring manager’s time is better spent on business development activities that directly impact the company’s bottom line. 

Pain Drives Change

Regardless of time or cost, pain is what ultimately drives change. This is very true when it comes to the dynamic of outsourced recruiting.

A critical open position remaining unfilled causes pain. An unmet hiring deadline causes pain. An internal recruiting staff that is not equipped to satisfy company talent acquisition requirements causes pain. Wasting money causes pain. That’s when external recruiting can step in, save time, end pain, and make sure that everyone involved is spending money effectively and focusing on what they do “best.”

If you are having recruiting-related pain, contact us to quickly and effectively connect with your next incredible hire.