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Is In-House Recruiting Your Best Option?

Oct 21 , 2019

Job candidate being interviewed by two people.

For small companies and start-ups struggling to stretch every investment dollar, it may seem to make sense to handle your recruiting and hiring in-house. In fact, you may feel you don't have a choice but to do so. Whether your company is just starting out or has grown beyond the point where a few leaders are wearing multiple hats, it's important to consider your recruiting process carefully. In short, what is truly the most cost-effective way of hiring the best possible talent?

In-House Recruiting Takes Time

One way to figure out whether in-house recruiting is working well for your company is to look at the time it takes. There are many tasks involved in recruiting, including writing job descriptions, publicizing job openings, and sourcing talent in other ways. These include reviewing resumes, interviewing candidates (sometimes multiple times), narrowing down the candidate pool, making a hiring decision, making a job offer, and onboarding the new hire. 

Each of these tasks takes time that could be taking key personnel away from other areas of their job--including parts that make money for the company. And while many in-house recruiting teams spread these tasks across several staff members, this approach can lead to unnecessary duplication or spending more time figuring out who did what if it isn't handled carefully. 

The Risk of Myopia

It makes sense to involve managers in the search for talent to fill open positions in their department or team. But some study data has shown that hiring managers can choose the wrong candidate up to 80 percent of the time. Sometimes, being too close to the situation can cause myopia, or the inability to see the reality of the situation. 

If your in-house process isn't producing a high number of successful hires, it could be because you need a more objective or expert outside viewpoint. Many outside recruiters are also using data to pinpoint ways to make the process more successful and improve the quality of hires.

Resumes.

What About the Cost?

Outside recruiters are thought to be more expensive than using in-house staff. Recruiters usually get a percentage of the new hire's salary, which generally adds up to tens of thousands of dollars per employee hired. What companies don't always realize is that there are significant costs involved in in-house recruiting as well. 

Every hour a manager spends working on recruiting is an hour they can't be doing the other tasks involved in their job. In effect, companies are paying for recruiting even if they use existing staff. If your manager makes $45 per hour, for example, and spends 5 hours a week doing recruiting, it's costing your company over $11,000 a year. And this doesn't include the revenue that manager isn't helping generate while recruiting. 

Now multiply that by all the other staff that are engaging in recruiting, and you could be paying well into six figures for in-house recruiting. It may or may not be more cost-effective to use outside recruiters for some or all of these tasks. But it's certainly worth looking at the costs of both to see which way is a better use of your talent and time. 

Again, the bottom line is quality of hire. If you aren't getting the quality of talent your company needs using in-house recruiting, some cost savings may not be worth it in the long run. GDH would be happy to help you figure out if outside recruiting could help you hire better or more cost-effectively. Contact us for more information on our recruiting services and how we help companies get the talent they need.