Recruitment Agency vs In-house Recruitment

Michelle Scanlan-Sanson All Members, Public

Whether you use a recruitment agency, your local newspaper or an online job board to recruit a new employee… the act of recruiting is not for the faint hearted and can be a daunting task even for the most experienced employer!

I wouldn’t recommend one form of recruiting over another as I believe it is personal choice as well as consideration for the time and resource availability you have along with the type of role you are seeking to fill.

According to “Recruitment is a highly organised and often thriving industry, even so, businesses in the UK waste millions on poor recruitment methods” Monster also goes on to state that the “average recruitment cost of filling a vacancy, using internal or external recruitment methods is reckoned to be around £4,500”.

Monster do not however give details as to how this cost is reached but I hasten to add that some of this is possibly the use of temporary staff or overtime paid whilst the role is vacant. So monitoring how long it takes you to fill the position can also be useful data. Research carried out by Randstad, the UK sector specialist recruiter found that “employers need to fill job vacancies within 72 working days – or within 15 weeks – before people assume it’s a job no one wants!”

What are the pro’s and con’s of using a recruitment agency?

Finding a candidate to best fit your organisation using an external agency can save the cost of advertising and time involved in pre-screening candidates, as they are responsible for checking qualifications, visa restrictions, experience, taking up references, etc. However, the time and effort involved in finding that right recruiter for your business should be factored into your overall recruiting costs and be aware that specialist recruiters may cost you more.

Interview your potential recruiters, they are after all going to be providing you with a service which you will pay them quite handsomely for. They should be doing a lot of the initial recruitment leg work for you but you will need to invest the time at the beginning of your relationship with them to ensure they fully understand your business, your culture and your expectations especially if you are planning to work with the agency on an ongoing basis.

Agencies will generally provide you with a set of terms and conditions of operation or service with them. My advice? Read them line for line, extremely carefully and question, discuss and negotiate on any item you are not comfortable with.

You can use agencies to recruit to temporary positions, temporary to permanent positions or permanent positions. The fee structure will vary depending on the type of position you are seeking to fill. An agency fee for a permanent position is normally stated as an “Introductory Fee” which is generally a percentage of the annual salary but be careful as some recruiters will take their fee based on basic annual salary alone whereas others will want to include additional financial benefits including bonus, car allowance, annual percentage pay rise, etc.). They will state what their percentage is and this can range from as low as 10% to a whopping 50% depending on the role, salary, specialist field, etc. It is vital you find the right agency for your business and remember that their fee percentage does not always reflect how good they are!

You are able to engage one or more agencies to recruit for the same role (be careful of receiving duplicate CV’s) but remember that once you fill the role, you will only pay the one fee to the agency that has provided you with the successful candidate. Ensure you know your agency fee’s if using more than one as the costs may differ but if 2 agencies provide the same candidate you should use the CV you received first even if the agency fee is higher.

Some unscrupulous recruiters can make rash and false promises “ we have so many candidates looking for this type of role, we can fill it really quickly for you” two weeks later you are still waiting for a CV to hit your inbox. If you are busy, you can let the communication with the recruiter slide that can have a detrimental effect on the recruitment process. If you have a HR department or a dedicated person who deals with the recruitment, sometimes, agencies may circumvent them and try to speak directly to managers (who are less informed of how they work and more inclined to believe their wonderful promises and claims!). Remember recruiters are sales people, they are target driven, so you will get inundated with sales calls from new agencies and they will keep ringing and want to spend time talking to you or pushing to visit and meet with you face to face to talk about their services.

The Pro’s and Con’s of In-house recruitment?

Advertising yourself puts you in control of how the role is advertised. You decide where it is advertised, how you describe the role and your organisation. It allows you to decide whether to target either a local or national pool of candidates. Most newspapers now have an online job board too so you can utilise both formats if required.

In-house recruitment allows you to potentially select your new employee from a specific location. This can be useful if your business is in village or town location with restricted travel availability or if you have a specific requirement for the employee to live within a specific travel distance of the building; e.g. key holder.

You do need to remember however that you will be required to write the advert and depending on how much you want to pay for advertising space will depend on how much you can say in the advert. You also get additional cost options of making it colour, adding your brand logo, etc.

Be prepared to receive applications from individuals who do not fill the job requirements, you could receive literally hundreds (and I do mean hundreds) of applications which you will need to spend time sifting and reading through to check their skills, knowledge and ability against the criteria you have set for the role. So ensure you set time aside to review all of the applications properly.

You will need to check for visa restrictions if the applicant is not a UK resident or is currently on a work visa of some kind. You will also be responsible for ensuring all applicants are updated on their application during the recruitment process.

Ultimately, it is personal choice and cost may also be a factor. But remember what looks cheapest at the outset may not necessarily be the case! Add up all of your potential costs including your time and the time of others involved throughout the recruitment process if you want to evaluate what the true cost of your recruitment process could be!


About the Author

Michelle Scanlan-Sanson | SSC Consulting | Business & Management Wessex HR & Employment Law Channel

Michelle Scanlan-Sanson As a Chartered Member of the CIPD and Fellow of CMI, I am a highly committed, credible and trusted HR Professional with in depth business knowledge. I am highly adaptable having worked across all settings including Central/Local Government, Third Sector, SME and large corporate organisations. I am passionate and care about people, Business Development, HR, fairness, equality and best practice. With extensive generalist HR experience combined with a strong operational and delivery focused approach building collaborative, positive and productive working relationships. I have a proven track record of developing creative, innovative, practical and effective solutions when introducing new HR policies, process change or added benefits to a business. With proven experience of local and global (that means I have worked with organisations in Europe and some African states as well as the UK!) HR solutions and TUPE.
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