Agency or In-House: Which Recruitment Team Is Right for Your Business?

November 21, 2014 at 12:02 PM by Abby Perkins

A business does not grow unless it is filled with the right employees. Finding these gems, however, can take some time and require special recruiting skills. Agency or In house recruitment?Thus, organizations need to have a recruitment team. But when other factors like cost, time and accuracy in finding the perfect employee come in, the next question to ask is: should you build your own team or use an agency? Here are some critical aspects to consider to help yourself decide.


Budgetary Concerns

Whether you build your own recruitment team or let an agency do it on your company’s behalf, you are bound to spend money. The question is, which one can you afford?

Building an in-house recruitment team means investing in staff training and the price may be a bit hefty. According to a 2007 Training article, a company may have to spend around $1,000 each year for the training of every employee.  Moreover, since you hire them yourselves, you spend on salary and other employee benefits that may drive the cost of their compensation package up considerably. Not to mention the cost of recruitment tools, software or advertising creatives they will be needing to perform the recruitment job itself.

Staffing agencies may lower your expenses, but they are by no means cheap. In a survey conducted by Bersin & Associates among companies with 100+ employees, those companies who used staffing agencies ended up filling less than 10% of their vacant positions, but paid at least 20% of those employees’ first-year wages to do so. Costs can also vary depending upon whether they are filling temporary or permanent positions. Furthermore, some agencies charge additional expenses, such as retainers, although others offset them with rebates if the employee decides to leave their new job early.

How much time can you spend for staffing?

The 2012 Recruiting Benchmarks Survey of NACE reported that it can take as long as 25 days after the final interview before a company will make an offer to a selected candidate. Then the chosen candidate is provided with an additional 15 days to think it over. In other words, a typical company will wait for more than a month before filling a position.

Companies can lose a staggering $1 million due to slow hiring practices simply by missing out on the opportunity to hire a real high-demand, game-changing employee. If that is not enough, for each day such a position remains unfilled, you miss out on $5,000 of potential revenue.

Staffing agencies may seem to have an advantage at this point, since they can easily build a network of candidates through recruitment drives, and thus have high-caliber candidates ready for referral at a moment’s notice. They have been in the business for quite a while, too, which makes the availability of referral networks throughout the industry in all types of niches part of their everyday business.

An in-house team can build such a candidate base and referral network too, provided they focus on strategies that will hasten and simplify the process of building their database with the right candidates in a swift and accurate manner.

What kind of business are you in?

As a recruitment team for any company, it is important that the hiring team itself has a good grasp of the company’s culture and is able to articulate and respond to questions about what it is like to work in their company. This is one of the in-house recruitment team’s stronger suits. They have more knowledge and experience on a day-to-day basis within the company and can provide better support to candidates.

However, if you are in a business which requires hard-to-fill roles or demands for a wide variety of talents within the company, hiring a recruiting agency is definitely a stronger option. Recruiting agencies are trained to mass recruit in almost all areas of a business, especially niche roles. Choosing an agency recruitment team over an in-house recruitment team is also an obvious choice in a scenario where the filling of niche roles is a day-to-day task.

Management Style

Your management style can have a huge impact on your decision. If you have the tendency to micromanage, a staffing agency will certainly not work out well for you simply because you must share control with the recruitment company.

Also, if you want easy, fast and streamlined communication with members of your recruiting team, an in-house recruitment team always comes in as the best choice because they are totally within your span of control. They typically have easier means and time for communication in comparison to those that may belong in an agency. Communication is an integral aspect of any harmonious working relationship, which is the strength of an in-house recruitment team compared to an agency.

How interested are you in protecting your brand?

Having your recruitment team in-house strengthens your organization’s brand. However, managing and maintaining an ideal brand is no simple task. In-house recruitment teams should ensure that candidates are provided with fast responses, kept updated at all stages, and are never left feeling disappointed towards the organization’s brand. To achieve this, partnering with an external agency can be a tremendous help for your in-house recruitment team because they can act as an intermediary by keeping candidates engaged and by dealing with difficult offer-management negotiations.


With all of the above factors considered, in the end, the ideal type of recruitment team to use for your company’s goals may depend on its own capabilities to obtain a quality hire given the factors mentioned. This is not a one-size-fits-all scenario as not all businesses are the same. One company may opt solely for an in-house recruitment team yet others may opt for both in-house and agency recruitment teams – it really depends on your company goals, needs and current state. As such, it is imperative that you know how your company works in business before deciding upon whichever recruitment team is ideal for your business.  

About the Author

This post was provided by FluidReview, an online applicant management platform used by non-profits, schools and foundations across the globe.  Learn how FluidReview can simplify your application procedure  today!

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