What to Choose : In House Recruitment or External Agency

Importance of Recruitment process

The successful recruitment for any business is the direct reflection of the validity and professionalism. The most crucial part for your business is to employ the right person for your business. Recruitment is a skill like any other skills and like all skills it requires training, experience, expertise and discernment. It involves developing network and building long term relationships with talent.

In business world acquiring the right talent for your organization is a crucial task. A good and professional recruitment process can minimize the time involved in searching, hiring, and training. This can streamline these processes and can make your search for viable candidates much more effective. Sometimes, to recruit and train can be quite expensive and time-consuming, therefore when you are recruiting a candidate, always make sure that you are making the perfect and right kind of choice.

recuritemnet process

Process of Recruitment

If you have a successful hiring process, then you can find good, qualified, reliable and right kind of employee for your company. You must always make sure to follow the complete recruitment path in an organized manner which will help you in finding the candidates that will prove to be the great asset to your organization.

According to the Recruitment Industry, the average time spent to look at the CV of candidates is between 5-7 seconds and there is only a chance of 17% that the cover letter is being read which shows the status of scrutinizing process of the potential candidates. Getting the right resource for your company is highly important & so it is important to understand the criticality of this process & deliver high quality result.

Recruitment Agency vs. In-house Team

Every organization faces this dilemma of whether to choose in-house team or an external recruitment agency for filling the job vacancy in the company. We are trying to answer this question by highlighting various facets related to it and considering the cost-benefit analysis for both. While doing the analysis, you must consider which method of recruitment scores higher on the following metrics as the quality of hire, time to fill, culture fit, and cost and candidate experience.

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Agency recruitment vs. In-house Recruitment

As per a recent study, the pool of potential candidates comprises of 16% candidates coming through employee referrals, 14% internal applicants, 13% from social networking (but this figure is growing rapidly) and 20% through recruiters. It is important to understand that relying on only traditional ways to find the perfect fit is not enough today. To find the right talent we need to explore various channels.

[Also Read: Strategies of Virtual Staffing]

A study revealed that 59% of hiring managers use search engines to research candidates, 68% of employers use Facebook to check about candidate’s profile, LinkedIn is the No.1 social network for recruiters with 93% of active recruiters & only 36% of active candidates, 89% of employers prefer to use social media for talent acquisition & management.  The hiring volumes have increased by 5% from 2012 to 2013. This is where recruitment agency gets an edge over in-house recruitment team as they use all possible & latest modes & channels to find the best talent for the required role.

stats for other sources

Although there is a stereotype for Recruitment agencies that they are bullish, sales, arrogant and only care about the deal while in reality, the good agency recruiters do not fit in this mold. Agency recruitment tends to be more sales-aligned in terms of in-house recruitment but it is not fair to judge all the agencies based on few not so good experience.

It is a highly competitive market where recruitment agencies are required to be proactive in chasing the potential lead or talent. There are nearly 20,000 recruitment agencies across the U.S. while Market size of the Indian staffing industry was INR 26,650 crore in 2014 and is growing between 10-15% each year, which means they have to work harder to provide better standards of service in order to stand out in today's competition. Underneath, the agency recruiters for business development and competition focus more on achieving the same goals. There may be many differences in the methodology, but the results are same: the best talent in best roles.

On the other hand, in-house recruiters are quite slow and lazy as they have no sense of urgency. In-house recruiters by no means are called to be “second best” to their agency cousins. They do not have to fight for the business in the same way as agency recruiters does, but they have to juggle internal hiring managers and must know about the business insights from a holistic perspective.

In-house Recruitment

Agency Recruitment

Most of the internal recruiters mainly rely upon the web-based system to do the initial screening and culling of applicants (at least in medium to large sized companies). They actually lack in penalties, incentives and how well they recruit. They will be able to articulate and respond to the questions about their organization in the way agency won’t.

Pros & Cons of Recruitment Agency & In-house Team

For any top personnel business, the ability to hire the best candidate for any position is absolutely essential. But, should the crucial task be entrusted to the in-house recruiting team or an external agency? Both of them have advantages and disadvantages which the firms needs to consider while deciding to select a candidate for their company. Several key advantages and disadvantages are enlisted below as:

Pros of In-house Recruitment

  • Better communication & engagement

In house interviews offer more space for engagement & communication between the employer & the potential candidate to understand each other in a better way.

  • Trust Factor

Candidates trust & rely more on company’s calls than from a third party because of many fraud cases in the market.

  • Transparency & better negotiation

In house recruitment process gives a better platform to discuss & negotiate about the salary & other terms of employment. Candidates who decide to join the company with clarity about all norms generally stayed with the company for a longer duration.

Pros & Cons of In-house Recruitment

Pros & Cons of In-house Recruitment

Cons of In-house Recruitment

  • Tough & tricky process

Finding right talent can be tough & tricky especially for small cities. As, most of the talented & experienced person are already employed in those areas.

  • Time

In-house team generally take much more time than external agency in closing the position because of limited people to take interview or not enough pool of applicants etc. which hampers the work & productivity of business.

  • Affect daily work flow

It is an extremely time & resource consuming process and if the hired resource leave then the process starts again which affects the daily work flow.

  • Limited applicants or choices

If you recruit internally, you could be limited to your choices by not throwing the net wider and recruiting from outside; this will result in losing candidates who can add real value to your business plus you will need to hire someone to replace the person you promote which means you have to train two people up; therefore, it might be simply more expedient to recruit externally and train up the new person.

Pros of Agency Recruitment

  • Quick results

For external agencies it is their day to day job. They are very much versed with the process and considering the high competition in the market they are bound to deliver quick results to the company.

  • Expertise & hustle free process

Agencies complete the recruitment process in a very professional, organized & hustle free manner. The chances of conflict are quite lesser in terms of the process. Agencies also share expert advice with the company in terms of recruitment & human resource management which helps the company in long run.

  • Quality

 Agencies invest a lot of time & energy in finding the right fit for the desired role. They use various platforms to scrutinize the right candidates & after a rigorous round of recruitment process select the right candidate. So the result quality is extremely good & unmatched.

  • Time & resource saving

Hiring an external recruitment agency wave off your pain of recruitment process. You save a lot of time & can use your in house resources in more important & productive work than sitting in a cabin for hours to interview the candidates.

  • Scope of discounts & payments

To build long term association with the company, agencies offer discounts & various modes of payment installments. Also many agencies only take full and final payment once the hired resource complete its 6months or 3months in the company which means if the resource leave early then the company is not bound to pay rest amount & saves this kind of money loss which they can’t in in-house recruitment.

pros and cons of inhouse

Pros & Cons of In-house Recruitment

Cons of Agency Recruitment

  • Cost

 For many companies price is a major con of hiring an external agency for recruitment process.

  • Hidden norms

Sometimes agencies hide few norms of the company to convince the candidate for joining. Post joining when candidates find out those norms, it creates conflict of interest & sometimes withdrawing of joining.

  • Finding right agency

Locating a right agency that is experienced & deliver the best result is also a hectic job as there are multiple service providers in the market and selecting the right & trust worthy agency for this job is also a crucial task.


In many ways, to hire recruitment agency is the investment in an economy of sale. Agencies are served to be highly motivated to provide the best candidate for your organization. They also help you to put your company on the map by selling your brand to potential talent in an effective manner.

On the other hand, to recruit internally or in-house, it may be more convenient to convey your brand values when you have the control over this process internally. To convey the nuances of your brand vision rather than the external team, you may feel that in-house recruitment team is in a better position. You have the option to keep together a dedicated in-house team if your organization as the constant recruitment cycle throughout the year.

[Also Read: Major Benefits of Virtual Staffing]

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