Agency, RPO & In-House Recruitment Compared

As a business scales, it’s inevitable that you’ll need to hire new staff or even build entirely new teams from scratch. For many companies, their first thought is to bring in a recruitment agency to find candidates. For others, it makes sense to keep recruitment in-house either because they’re small and don’t have the resources to bring in external support, or because their hiring needs are so extensive that it’s worth investing in an internal team.

There’s also the option to explore alternative opportunities such as recruitment process outsourcing (RPO) which involves outsourcing your recruitment process (or part of it) to an external provider and working with them to not only source candidates, but also to improve and enhance your entire recruitment process. 

Or you could choose embedded talent acquisition where a consultancy works as part of your in-house talent function.

There’s a lot of choice available, so the question is, how do you decide which method is best for your business? Every organisation is different in terms of its size, budget and hiring needs, and what works well for one company won’t necessarily be the right fit for yours.

In this guide, we’ll take a deep dive into the pros and cons of in-house recruitment, agencies and RPO. At the end of this guide, you’ll be in a position to confidently make the right choice for your organisation.

Definitions: In-House, Agencies, RPO and Embedded Talent Acquisition

In-House Talent Acquisition ‍

Refers to the process of hiring and recruiting candidates within a company's internal HR department. Companies that use in-house recruitment rely on their internal resources to source, shortlist, interview and hire candidates for open roles. This approach is typically used by larger businesses with dedicated HR teams that have the resources and expertise to manage the entire recruitment process in-house.

Agency Recruitment

Is the process of outsourcing recruitment to an external agency. A recruitment agency acts as a middleman between a company with roles to fill and candidates who are looking for work. They publish job ads, shortlist candidates and interview them on behalf of the company. They also have their own pool of candidates to pull from, which means they can help a company hire quickly.

RPO (Recruitment Process Outsourcing)

Is the practice of outsourcing all or part of the recruitment process to an external provider. While an RPO provider perform some of the same services as a recruitment agency in terms of sourcing and shortlisting candidates, its role tends to go a bit further and is more strategic.

Embedded Talent Acquisition

Is a strategy in which a company hires talent acquisition partners to work within their organisation as part of their human resources or talent management team. These embedded partners work closely with hiring managers and other stakeholders to understand the company's unique needs and culture, and to develop a targeted approach to attracting and hiring top talent. This makes the recruitment process more streamlined and efficient, with a greater focus on finding candidates who are a good fit for the organisation.

The Pros and Cons of In-House Recruitment

Pros:

• Cost-effectiveness: In-house recruitment can be cost-effective as it eliminates the need to pay fees to external recruitment agencies.
• Improved knowledge of the company: In-house recruiters have a better understanding of the company culture, values, and job requirements, which can help them identify the right candidate for the job.
• Faster recruitment process: In-house recruitment can be faster than using external recruitment agencies as there are fewer intermediaries involved in the process.
• Better control over the recruitment process: In-house recruitment gives the company greater control over the recruitment process, enabling them to make informed decisions and ensure that the right candidate is selected for the job.

Cons:

• Limited pool of candidates: In-house recruitment may limit the pool of candidates available for the job as it relies on internal sources such as employee referrals or internal job postings.
• Lack of expertise: In-house recruiters may not have the same level of expertise as external recruitment agencies, which can lead to mistakes in the recruitment process.
• Time-consuming: In-house recruitment can be time-consuming as it requires the involvement of internal staff in the recruitment process, which can divert their attention from other important tasks.
• Bias: In-house recruitment can be susceptible to bias as internal recruiters may have preconceptions about candidates based on their prior performance or relationships with them.

The Pros and Cons of Agency Recruitment

Pros:

• Access to a wider pool of candidates: Recruitment agencies have access to a wider pool of candidates than internal recruitment, which can increase the chances of finding the right candidate for the job.
• Expertise: Recruitment agencies specialise in finding the right candidate for the job, and they have the necessary expertise and resources to conduct a thorough and efficient recruitment process.
• Time-saving: Recruitment agencies can save the company time by handling the recruitment process, from advertising the job vacancy to screening, interviewing and shortlisting candidates.
• Reduced risk: Recruitment agencies can reduce the risk of making a bad hire by conducting thorough background checks and verifying candidate credentials.

Cons:

• Cost: Recruitment agencies charge fees for their services, which can be expensive, particularly for smaller companies.
• Limited knowledge of the company: Recruitment agencies may have limited knowledge of the company culture, values, and job requirements, which can lead to a mismatch between the candidate and the company.
• Lack of control: Recruitment agencies may not always act in the company's best interests and may not have the same level of control over the recruitment process as internal recruiters.
• Quality of candidates: Recruitment agencies may not always provide high-quality candidates, and there is a risk that they may recommend candidates based on their availability rather than their suitability for the job.

The Pros and Cons of RPO (Recruitment Process Outsourcing):

‍Pros:

• Cost savings: RPO can be cost-effective as it can reduce the cost per hire and eliminate the need to invest in expensive recruitment technologies.
• Scalability: RPO can be scaled up or down depending on the company's hiring needs, making it a flexible option for companies that experience fluctuating hiring demands.
• Expertise: RPO providers are experts in recruitment and have the necessary expertise and resources to conduct a thorough and efficient recruitment process.
• Improved quality of hires: RPO providers use sophisticated sourcing techniques to identify and attract high-quality candidates, which can result in a higher quality of hires.

Cons:

• Limited control: RPO providers may not always act in the company's best interests, and companies may have limited control over the recruitment process.
• Risk of cultural mismatch: RPO providers may not have a deep understanding of the company's culture, values, and job requirements, which can result in a mismatch between the candidate and the company.
• Integration issues: RPO providers may face integration issues when working with the company's existing HR systems and processes, which can cause delays and inefficiencies.
• Communication challenges: RPO providers may not always communicate effectively with the company's internal stakeholders, leading to misunderstandings and misalignments.

How does embedded talent acquisition measure up?

• Control: Embedded talent acquisition provides companies with greater control over the recruitment process and ensures that recruiters have a deep understanding of the company's culture, values, and job requirements.
• Integration: Embedded talent acquisition facilitates integration with the company's HR systems and processes, which can lead to greater efficiency and better communication with internal stakeholders.
• Flexibility: Embedded talent acquisition can be scaled up or down depending on the company's hiring needs, making it a flexible option for companies that experience fluctuating hiring demands.
• Cost savings: Embedded talent acquisition can be cost-effective for a company as embedded partners will work on a fixed-fee basis and has been proven to reduce the cost per hire (you can read our case study on that here) while also eliminating the need for companies to invest in expensive recruiting technology. 

Choosing the Right Approach when you're recruiting

When it comes to choosing the right recruitment approach for your company, there are several factors to consider. These include the size and resources of your organisation, the volume of recruitment needs, the level of recruitment expertise required, and the cost-effectiveness of each approach.

If your company has a dedicated HR team with the resources and expertise to manage the recruitment process in-house, this may be the most cost-effective approach. However, if your company has a high volume of recruitment needs or requires specialised recruitment expertise, outsourcing to an agency, RPO provider or embedded talent partner may be a better option.

Ultimately, the decision of which approach to use will depend on the specific needs and priorities of your company. By carefully considering the advantages and disadvantages of each approach, you can make an informed decision about which recruitment approach is right for your business.

BOOSTA: Leaders in Embedded Talent Acquisition

At BOOSTA, we’re leaders in Embedded Talent Acquisition, which combines the best parts of agency, RPO and in-house talent acquisition. We embed ourselves fully into your business, allowing you to add a team of dedicated, knowledgeable and experienced talent acquisition partners to your internal team. You’ll get access to:

• A much wider pool of candidates than you could reach yourself thanks to our database of over 850,000 jobseekers
• An unparalleled tech stack which allows us to amplify your search online
• Reduced time to hire
• Deep industry knowledge and understanding of trends in your local market
• A flexible solution that can scale recruitment capacity based on business needs
• A cost-effective model with flat, transparent fees

Why not find out more about what we do at BOOSTA, or speak to one of our team today to see how we can help you, no matter what stage your business is at. 

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