Insource or outsource recruitment?
A business may not be able to sustain its place in the evolving market because of talent scarcity, lack of digital skills, and ever-growing HR technology. Understandably, the desire for expansion in the companies leads to recruiting more skilled employees, a third-party organisation, or training in-house candidates for meeting their demands. However, it’s a difficult decision to make and raises some important questions. Before we get to them, let’s understand insourcing and outsourcing.
What is Insourcing?
Insourcing is an activity wherein you utilize your existing employees or department to meet specific goals in your company. For example, using your employees in your marketing strategies or expanding customer service. However, it’s not limited to this. You can always employ other candidates in your company. For instance, a small firm might hire a full-time accountant.
When you choose to insource, you have the authority over your company’s environment and deadlines. You can supervise your employees as and when needed. Moreover, it promotes a collaborative culture and develops creativity in the employees. Insourcing leads to the improvement of the company’s culture because of regular training and development in the employees. It also helps in gaining the trust of your candidates, which results in increased productivity and loyalty.
But every coin has two sides, and there are some challenges you might face while insourcing. Sometimes, insourcing is a costly affair. It’s because you have to acquire new infrastructure, skilled employees, and other resources. Besides, you might have to hire coaches to train the existing employees.
What is Outsourcing?
Outsourcing is the process of hiring a workforce that’s independent of your company. Simply put, you don’t hire them as employees of your company but as a third-party who’s dedicated to helping your business grow. For example, partnering up with a third-party IT company, an accounting firm, or a marketing agency to fulfil the objectives of your organisation. Outsourcing recruitment is partnering up with an RPO company to fulfil complete end-to-end recruiting process or part of it. It’s not necessary to employ third parties full-time. You can be flexible in changing who you work with or switch to insourcing.
The choice of outsourcing is cost-efficient. That’s because the external parties already have the solution and resources to your problems. Moreover, you wouldn’t have to wait for your in-house employees to learn and start from scratch. The employees in the outsourced companies have the needed skills and experience.
However, you won't have any control over their work environment or employee management. For instance, if one of your company's services is outsourced, you may not be able to enforce the method of their completion.
Factors to consider while making a decision on outsourcing or insourcing recruitment
In modern times, most industries have been investing in advanced technologies and are examining their programs. You might know that the strength of your company lies in your ability to continuously evolve with changing times. You may face unique challenges to build a place in the progressing market. Those hurdles might lead you to examine the strength of your internal function. This is fair because if your business has to expand, you need fresh faces with relevant skills. However, that can make you find yourself in a new position where you'll meet unfamiliar groups of people. Meeting the people who are from different pools of talent may force you to question your tactics. But it's necessary to answer relevant questions to make the correct decision. Here are few factors you must keep in mind while deciding your source.
Can your organizational culture manage the culture of external talent acquisition?
Richard Branson said, “Create the kind of workplace and company culture that will attract great talent. If you hire brilliant people, they will make work feel more like play.” Culture is your key to keep the organisation together. It’s believed that despite having the most successful strategies, one may fall due to cultural differences. Therefore, it’s vital to understand, evaluate, and update your organisation’s values, goals, behaviours, and practices. Thereafter, hire a person that matches it to satisfy your company goals.
Do you have the budget to create a strong internal function?
The budget of every business is different. The costs may be determined by your organisation’s arrangement, infrastructure, and progress. As the factors of cost determination are unique in every business, there are two things you can look for while deciding to insource or outsource recruitment. First, determine your internal recruiting cost. Your internal staffing costs may include recruiter salary, employee referral bonus, interview costs, and fixed costs like office rentals. Second, determine your external recruiting costs. Those can be your agency fees, advertising costs, technical costs, and recruitment event costs. Both of them will help you discover the cost-effectiveness or cost per hire.
Does your technology infrastructure help you with the required support and insights?
HR technology is developing at a fast rate which can be beneficial for some and overwhelming for others. Not all are tech experts in their companies. According to Randstad Sourceright’s Talent Trend research, 68% of leaders said that advanced technology has made recruitment easier. While 47% found it difficult to cope up. Moreover, AI and automation play a major role in reshaping the role of recruiters and employees. Mostly, the companies choose to outsource IT companies because it’s cost-effective and their knowledge is better. But, you need to think if your internal sources can cope up with the new technologies. However, external sources have their hands on various advanced tools that help in accelerating hiring results. If your goal is to acquire talent, then you should follow a path of innovation.
Do you have time and resources for improving the recruitment function?
Understandably, you want the best candidates for your company to drive optimum results. However, when you open a new position, it might take up time and resources until it gets filled by someone who fits your profile. According to the Society of Human Resource Management, it may take up to 36 days to fill a position. According to LinkedIn, 30% of companies take 1 to 4 months to hire the desired employee. Although the time taken can differ from industry to industry, you can always use resources that’ll make your process fast. Some common software or tactics you can incorporate during hiring are using data analytics, email automation, automatic interview scheduling, automated resume screening, and automated disqualification. If you do not want to waste your time and money on a lengthy process, consider partnering with a third-party recruitment process outsourcing agency. They’ll help you in filtering the unqualified candidates and will be cost-effective.
Conclusion
The people you have in your team will help in building your business and achieving goals. It’s obvious to face unique challenges while making your internal function robust. You get exposed to new faces, cultures, and technologies. However, it’s believed that a good leader always cares and is open to innovations, progress, and employee welfare. Besides, improving talent acquisition depends on how you have organised your company and its capital. Now it’s upon you to choose between insourcing and outsourcing. It’s time to evaluate your company before evaluating the desired recruitment.
If you are considering outsourcing recruitment process for your agency, feel free to speak with one of our experts at QX Global Group. Get your questions answered and gain a better understanding of how our scalable recruiting support can help your business.