Outsourcing Recruitment: The Top 5 Reasons to Avoid Hiring “In-House Recruiters”

Posted by Bernie Reifkind on February 25, 2014

In order to compete in the business world, human capital reigns supreme.  A case can be made that the companies with the best employees win. Period. Game, set, match.

Oh and obviously having great management is a huge advantage.

There is a great quote that has been going viral on the web that correctly states:

“If you think it’s expensive to hire a professional, wait until you hire an amateur.”

In the context of recruitment there is a trend in which organizations are bringing their recruitment “in-house” meaning that full time “recruiters” or “talent acquisition professionals” are being hired as employees.  Apparently this is an answer to a more cost effective method for sourcing and hiring of the best available talent.

This is delusional thinking at best.

While the reasoning for hiring in-house recruiters may seem fiscally logical, the reality is that in most cases it is exceedingly more expensive than outsourcing the recruitment function to a professional recruitment firm.

The costs must not only be measured with the standard costs of any hire- salary, benefits, workers compensation, vacation time, etc.

A larger and more expensive cost are opportunity costs. In-house recruiters do not have the honed in skills and dedicated years of expertise that a professional recruitment firm does in finding the best available candidates IN the market to make a job change as opposed to being ON the market to make a job change.

That is a huge difference.

The best available candidates are typically employed but do not necessarily have their resumes floating on the web.  However, they are “keeping their eyes and ears open for great opportunities.” These are the types of candidates that are gold.  These folks are what the recruitment industry calls “passive candidates” and typically are unavailable to in- house recruiters.

In addition, passive candidates are most likely working for your competitors so these candidates are “hands off” to your in-house recruiters.

Poaching from your competitors can be bad business, but not to the professional recruiter and that is a huge advantage.

Here are 5 more reasons to avoid hiring “in-house” recruiters:

1.  Lack of Urgency–  when a position needs to be filled, in most cases it needs to be filled right away, ASAP!  A professional recruiter understands urgency – in fact making placements is how third party recruiters are paid.  They fully understand URGENCY!  Professional recruiters are not working 9:00 to 5:00, they are working until they make the placement.  WITH URGENCY.  An in-house recruiter has different priorities when they have a salary, benefits, vacation time, and work only work during business hours.  Think about this.  Front line managers (in most cases) need to hire immediately.  They need to hire someone right now.  No excuses.

2. Inexperience- Most in-house recruiters have tried to be a professional outsourced recruiter and were unsuccessful so they opted for a safer environment with a paycheck and benefits.  However to the professional recruiter there is much more involved in the recruitment process than running ads on job boards or social media and then reading resumes.  Most in-house recruiters look for “buzz words” on resumes and if these words to not appear, than the resume is rejected.  A professional recruiter will contact someone whose background  may be relevant enough to “hit the target” rather than “hit the bull’s-eye” to fully ascertain if this is a qualified candidate and if not, then a referral is requested.  Referrals are the life blood of the recruitment business and can lead to the very best available candidates. In-house recruiters in most cases are not trained how to create the relationship necessary to ask for referrals or to ask for an introduction to an outstanding candidate.

3. Accountability- There is a big difference between being accessible and being accountable. In addition, there is a world of difference between being paid for time versus results.  In- house recruiters work hard at their jobs, have office meetings and get pulled in many directions so their priorities can change on a day to day basis leaving them in many cases unable to recruit for a critical job opening.  This is very different than hiring the professional recruiter that will give you a candid reply (and some may overstate their efforts) but either a qualified candidate has been presented or not.  Accountably is the game changer.

4.  Costs- Not to overstate what was previously written, according to a CNN Money article published last year (http://cnnmon.ie/1ckM1bY)

“How much does an employee really cost?While that depends on benefits — and several layers of taxes — it typically ends up being 18% to 26% more than a worker’s base salary. It can be even higher for larger companies.  The extra costs are often cited by business owners as the biggest deterrent to hiring. Better sales might justify adding another $70,000 salary to the payroll, but in reality, that extra employee will probably cost closer to $88,000.”

5. Results – Just about the only thing that matters are results.  Are you hiring anyone directly from the results of your in-house recruiters?  Put more simply, are your in-house recruiters even presenting you with the best available talent?  How would you even know? What is your conversion ratio from applicant to hire?  There can be no excuses for non performance when a job remains open due to poor recruitment efforts.  Not only does the organization suffer when a position remains open but so does company morale.  The cost of low company morale can severely affect any organization.

Positions have to be filled with the urgency only found in the DNA of a professional recruiter.

In summary, seek professionals when needed. If you need a lawyer seek out an expert and never be your own lawyer.  Need a dentist?  Find the specialist.  Need the assistance of a professional recruiter?

You get the point.

When it comes to search and placement, use an expert no excuse recruitment firm that has the resources and wisdom to assist you in finding and hiring the very best talent.

Respectfully, it is delusional to think that “in- house recruiting” will ever replace the expertise of an outsourced professional recruiter.  Wise up, it’s not too late.

I am Bernie Reifkind, CEO and founder of Premier Search, Inc. I can be reached at 1(800) 801-1400 or email at ceo@psihealth.com.  I welcome your phone call.

 

 

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