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How do I Know if Recruitment Outsourcing is Suitable For my Company?

Aug 30, 2008
In the last few years there has been an ever increasing rise in the use of Recruitment Process Resourcing (RPO) / outsourced recruitment by companies. It certainly seems to be a trend and industry that is growing, but as a senior HR leader or Director how do you know this set-up is best for your business? We will try to address the positive and negative impacts of such an agreement to help your decision making process easier.

Recruitment outsourcing can take its shape in various forms - from retained recruitment with agencies to full blown outsourced agreements with RPO companies/consultants on site in your business. A good place to start is how much recruitment your organisation is carrying out and whether there is a need based on the volumes of hires you make? Ultimately you are considering recruitment outsourcing because you have a problem with your current recruitment. You need to look at what this problem is specifically.

Are HR not capable of making enough direct hires because they have not got a recruitment background?

Is there so much volume that your HR department cannot cope? Are you planning to embark on a heavy recruitment drive?

Are you looking to cut costs in HR / agency fees?

Are you just sick of dealing with agencies directly?

Is HR slowing the HR process up?

The list goes on...

Once you have evaluated your problem and realised the specific need you want to address - you are now in a much more informed position to make a decision on whether outsourcing is right for you.

There is no doubt that outsourcing your recruitment can help alleviate several of these problems and put your mind at ease, knowing you have experts running your recruitment campaigns. But there can also be pitfalls and a lack of control - sometimes outsourced companies can create more problems, adding tiers to the recruitment process and prolonging the cycle from time to hire.

Let's look at the advantages for you implementing an outsourced recruitment department:

Firstly, you will have experienced recruiters dealing with your hiring (rather than HR) whom are often not recruiters as their core skills lay in other areas. This hopefully will mean they will be able to source candidates directly and have experience using headhunting methods, saving you money from paying high agency fees for every new hire you make. If the recruitment outsourcing company are not doing this/enabling you to do this, then I really can't see much value they are adding. If they are not you may as well just keep your HR personnel in place.

Recruitment outsourcing companies sell their services on the premise they will be saving you money on your recruitment budget, so you need to scrutinise the numbers carefully. But will they have the experience and capability to deliver on your requirements directly or will they have to use agencies in any case, therefore the cost differential being very minimal (potentially more). As you are then using two tiers unnecessarily.

If you simply want to relieve the time and pressure of recruiting off your own shoulders and have no HR function, outsourcing can be a very effective way of handling the process. They will free up your time to run the business You will benefit from having just one point of contact running your recruitment that then facilitate the process on your behalf with agencies and external providers. There is no doubt this would ease the pain you may feel if you burdened. Again, these services are sold trying to counter balance the age old problem of you being berated with agency calls - you have effectively delegated this to people who understand the recruitment business.

The negative side of outsourcing has been mentioned briefly, there is no doubt outsourcing has its problems. For starters, how can they guarantee an effective recruitment campaign just because it has been outsourced? Will they be more effective than your current HR department or is it just going to cost more money? Often recruitment outsourcing companies have recruiters whom are more like a HR department in any case, so they will be using external suppliers most of the time. By implementing a recruitment company in-between the business and agencies you may then be adding an unnecessary layer to the process. As the outsourcing company will love to be in control, potentially slowing the process down as they have too many procedures in place and rigid ways of working. For example; running Preferred Supplier Lists without giving access to agencies with specialised candidates. Don't get me wrong PSL agreements are important, but in the current market specialist / niche recruitment suppliers will be the ones with the best candidates due to their market focus, and often outsourcing firms (like HR) will simply not allow applications to come through because of the fact they are not preferred. If it was your business you don't necessarily care if they are preferred suppliers you just want the best people for your business.

If you are embarking on this process and considering outsourcing remember to assess your problem and specifically understand why you want to outsource. As outsourcing has in large been created by recruitment companies who have taken advantage of a perceived problem by clients just to ensure a regular cash flow/revenue stream without really adding much value.
About the Author
Edwin Abl is a Director of Consegna UK which provides recruitment consulting services to companies looking to recruit in the Management Consultancy and Technology sectors.
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