Hiring is essential for creating a successful business operation. After all, the best teams are the ones running the top companies. Whether you’re employing a full-time employee, a part-time staff, or an external assistant, the hiring process is crucial for any business.
However, for smaller businesses and start-ups there is an urgent need for talented staff who can contribute to success immediately. In the wake of the COVID-19 pandemic, 93% of employers are doing some form of hiring in 2022. Compared to 82% of the previous year, HR units actively seek more skilled individuals to join their companies.
Talent recruitment and hiring is a very time-intensive process, and can often be challenging for small businesses to perform alongside their other responsibilities. Enter outsourcing: where you, the employer, turn to the servicer of a third-party provider to handle hiring. Manpower agencies and recruitment offices are often what come to mind when we think of recruitment outsourcing. While this is nothing new, outsourcing is an efficient cost-cutting solution for many start-ups and small businesses, when implemented correctly.
Deloitte reports that about 70% of companies employ some sort of outsourcing services to reduce overhead costs.
Learn how to go about the hiring vs outsourcing argument, by understanding the pros and cons of each strategy. Find out which of the two is best for your business and other important considerations to keep in mind.
In-house hiring refers to either conducting your own interviews and recruiting any qualified applicants for your team or engaging a hiring manager or recruiter as a permanent employee to handle your talent acquisition requirements.
When firms or business owners hire internally, there is a sense of relief and security. They often feel more confident as they can closely keep track of their hiree’s output and develop their essential skills.
Organizational meetings are made simpler when managing such a team, and the interpersonal relationships are less formal. Additionally, it reduces stress brought on by a formal environment by raising employee involvement, especially among senior management.
While many manpower agencies can be trusted, it is reassuring to get to know an employee you’ve personally hired and trained. Having more flexibility to offer salaries and room for growth can make it enticing for your staff to stick around for the long run. There is a different energy to company culture as well if staff are “home-grown”.
It’s also a possibility that intellectual property will be more secure. Employees might be required to sign a non-compete agreement, preventing them from sharing ideas and techniques with their competitors if they leave the firm.
All of the aforementioned arguments for hiring vs outsourcing can be very convincing especially if you already have an ideal applicant in mind. However, certain challenges go along with choosing to do your hiring in-house.
Leveraging in-house hiring isn’t without its downsides. While hiring staff members is a key part of growing your company, you must also consider the amount of time, effort, and money that goes into adding more people to work for you.
As an employer, you are in charge of paying for employee benefits, equipment (desks, laptops, etc.), hiring and onboarding, training, and other expenses that raise the cost of hiring internal staff. Not only do these cost money, but they also take up a lot of your time. Finding top talent can also be difficult, and some of the best employees will demand high salaries and comprehensive benefits.
It’s possible that you won’t have enough tasks or responsibilities to justify the costs of paying a full-time employee’s salary. This is particularly true for small firms that require assistance with administrative support, marketing, and HR.
When staff leaves or resign, their given time frames might make it difficult to locate replacements. Two weeks’ notice isn’t nearly enough time to identify and train a replacement hire, so other team members must pick up the slack.
To fully understand the whole hiring vs outsourcing argument, we must also explore how outsourced staffing services can benefit your business. By contracting a recruitment firm to fill available jobs at your company, you may outsource recruiting services for your business. A freelance recruiter can source, screen, interview, and onboard individuals for you.
Outsourcing may help businesses save money, get access to competitive talent markets, and increase recruiting effectiveness. This can be quite beneficial for small and medium-sized enterprises since it cuts down on costs, allowing you to allocate funds to other essential business functions.
Recruiting agencies often use many sourcing channels to promote available positions at your organization, such as job portals, social networking sites, talent pipelines, and professional recruiter networks.
For specialized skills and tasks, buying the required equipment and tools is an added expense. Contractors frequently have their own greatest equipment and are already knowledgeable on how to utilize it. They may also have access to the most recent technological developments, which might speed up the project and further reduce your costs.
You could just require a professional service for a brief time. Hiring a contractor in this situation is usually always the best option, especially if your internal staff lacks the necessary knowledge or time.
Your permanent team may focus on more useful and skilled work by outsourcing routine and fundamental chores. Their morale will rise as a result, and your company will benefit from higher productivity from them.
Not all companies can benefit from working with talent outsourcing agencies. You can inevitably run into some risks when choosing to outsource your hiring, depending on your internal processes and training programs. Consider the following when you decide to outsource:
There is a general disconnect between outsourced personnel and their internal counterparts which can result from their occasional exclusion from your company’s primary communication channels, which might occasionally prevent crucial information from being conveyed to them.
Because the recruiter you employ will handle every step of the process, when you choose an outsourced recruitment service model, you must mostly adopt a hands-off strategy. There are limited opportunities for one-on-one discussion with possible prospects. Naturally, if you want it, the recruiter will send the qualified prospects to you for a face-to-face interview. Nevertheless, they typically manage every aspect of the process personally.
The main drawback of this recruiting strategy is that it limits your flexibility compared to what it would if you had chosen internal hiring vs outsourcing.
The choice of whether to outsource or keep work in-house is an ongoing process because your company’s needs will inevitably change over time. Choosing the finest contractors and freelancers is a talent that can be developed with practice, but using these recruiting methods has fewer risks than hiring in-house staff.
Don’t let comparisons get in the way of deciding what tasks your company should and shouldn’t outsource. For every organization, it is different. It’s crucial to understand the advantages and disadvantages of both recruiting internal employees and outsourcing. Take into account the current skillset your employees have and how you can maximize it. Identify which processes you also need the most urgent help in.
Cost, experience, and flexibility are the three most important considerations when choosing between internal hiring vs outsourcing. You may find that these three aspects have the biggest influence on whether you decide to hire internally or outsource.
Both have advantages and disadvantages of their own and are beneficial for certain firms at various phases of development.
Even the most inventive, large-scale organization must outsource some work, whereas smaller enterprises may have a greater need for outsourcing.
When choosing the right manpower agency to outsource staff to, give us a call.
