7 Situations Where Enlisting the Help of a Recruiting Agency Is More Advantageous Than Using an In-House Recruiter

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Will Kivinski

Will Kivinski is a Sr. Account Manager at Greenhouse. He partners with customers to help them reach their recruiting goals by streamlining their processes and educating them on best practices. Prior to Greenhouse, Will was a recruiter at a global 500-person company (using Greenhouse) and at a Fortune 500 company. With Greenhouse, he is stoked that he’s found a company that lets him blend his passions for recruiting and customer success!

 

Ah, the age old question in recruiting: When should you use in-house recruiters, and when should you leverage agency recruiters? Unfortunately, there isn’t a clear-cut answer to this question, as there isn’t a one-size-fits-all solution for every organization.

You’ll likely choose to hire an in-house recruiter (or entire recruiting team) after your company grows to a certain size and it makes the most sense to do so cost-wise—and you perhaps are looking to develop a consistent candidate experience and contribute to building a positive employer brand.

But on the flip side, there are several reasons why leveraging the services of a recruiting agency makes sense, too. The goal of this post is to help you understand the particular situations where an agency may be better able to serve you.

That said, let’s explore the 7 situations where it’s more advantageous to use a recruiting agency to fulfill your hiring needs (and then we’ll dive into the various types of recruiting agencies, so that you know your options!):

1. Speed

Let me ask you this: How often do you find yourself in a situation where you are behind on your hiring?—did you need to hire someone, like, yesterday? Don’t worry, it happens to the best of us. So, if you need to get someone on board quickly, agencies are a great resource, as they often have constant and curated pipelines of qualified candidates. In-house recruiters, on the other hand, can take a fair amount of time to build pipelines of qualified candidates. Why? In order to do so, they first need to learn the qualities and needs of different roles, build solid relationships with internal stakeholders, and develop an understanding of the overall business—all things that come with time...sometimes time you don’t have.

Not having the employee you needed yesterday can create obvious bottlenecks in your organization, with all fingers pointing back at the recruiting team. So, avoid this fate by enlisting the immediate help of an agency to get the relief you need.

2. Specialized roles / vertical expertise

Are you looking to hire your company’s first lawyer, accountant, engineer, or IT guru? Oftentimes agencies specialize in certain types of roles or possess knowledge of verticals that you may be lacking. If you haven’t had prior experience hiring for a certain role or vertical, you may not know where to begin. Agencies, on the other hand, have “been there, done that.” They don’t need to spend valuable time researching new areas before they start the recruiting process.

3. The early days

Maybe you’re a company of only four employees and you’re still proving your business model. (Startup, anyone?!). Hiring a full-time in-house recruiter doesn’t make financial sense at the moment because there’s no way you can know exactly what your hiring needs will be down the road—a few months out, a year out, etc. In startup land, everything is unpredictable! So, bringing on a full-time in-house recruiter at this point in time means that they’re most likely not going to be used to their fullest capacity. So, while you get a better idea of your organization’s needs and future hiring plans, secure the help of an agency to help you with your first few hires.

4. Executive searches

If you’re looking for C-suite or executive employees, oftentimes leveraging an agency makes the most sense. If the agency has the right experience, it can help you fill your first CMO role or help you backfill another executive position that’s just opened up. These searches often require a lot of confidentiality, and so having an off-site agency work on it can help keep things discrete.

Agencies also have the time to focus on these in-depth, extensive searches—time that an in-house recruiter probably doesn’t have (unless they’re in a large organization that has the capacity to employ an executive recruiter specialist). Executive searches are more time-consuming because you’re sourcing from a much smaller pool of qualified candidates than you are with less senior roles. Finding the exact right fit is also more crucial than with less senior roles, since executives control the direction of the company. So, the pressure’s on to weed out the lackluster and pinpoint the outstanding. And, the scrutiny and length of the interview process for executive searches is longer, too, and often follows an up-and-down pattern, where you may go weeks or even months before finding the next qualified candidate to interview. All these reasons support why executive searches are challenging and thus why it makes the most sense to seek the aid of an agency.

5. Entering a new market

At one of my previous employers, we decided to expand our presence to Japan, where the process of recruiting is drastically different than in the U.S. In that case, we definitely could have used the expertise of an agency that was well-versed in the Japanese style of recruiting, having knowledge of the cultural nuances in hiring employees in that part of the world. Using an agency is a great way to help ease you into the market, while you prepare a long-term plan for handling that market’s recruiting efforts in-house.

6. A big hiring push / seasonality

Has this happened to you?: You just found out that you need to hire 30 new sales reps in one month for a projected spike in seasonal business. Your current in-house recruiting staff isn’t equipped to take on this task. You surely don’t want to drop the ball, so, what do you do? Instead of hiring a full-time employee for a short-term project, it’s a good idea to go through an agency to help pump up your staff volume for a big hiring push—especially one that is on a deadline. In-house recruiters can partner with an agency to help meet a temporary goal.

7. Expanding your network

Have you ever switched jobs, and with that, switched industries, and felt like a fish out of water? Going from biotech to adtech probably means you won’t have the same network of potential candidates to source from. And you probably won’t know how to best source and recruit candidates in your new industry right from the get-go. But agencies can help with this. They’re known to have both breadth and depth when it comes to networks, so it’s a quick way to expand your network and be more resourceful to your new company.

Now that you’re familiar with the circumstances that make leveraging a recruiting agency a smart choice for your organization, let’s get a better understanding of the different types of recruiting agencies that exist and how they’re structured. Here’s the low-down:

Types of Recruiting Agencies

  • Contingency recruiting agencies provide recruiting services by partnering with companies to match their requirements and a candidate’s qualifications. You’ll see them most utilized for high volume, skilled, and mid-level management positions. Because contingency agencies often handle high-volume roles, it’s often hard to control candidate experience and provide a personalized “white glove” treatment. Typically, the contingency agency will conduct a short interview to pre-qualify the candidate for their client and require a fee of around 20% of the candidate’s salary once the hire is made.
  • Retained search agencies typically fill high-level, confidential, or specialized positions and have a contract with their client (often an exclusive one), and the client typically pays an upfront fee (whether a candidate is hired or not). The retained recruiters often do most of the heavy lifting but work with clients to formulate a plan about which type of candidates they need, how to go about finding the candidates, and ultimately, determining which candidates fit the profile of the roles they’re trying to hire. In many cases, retained search firms seek out passive candidates, which can lead to candidates who would have otherwise never been considered or available for the role. It’s worth noting that because of their reputation, retained search agencies can be one of the first places that high-level candidates seek out when becoming active...hint, hint.
  • Retingency search firms offer the best of both contingency and retained firms to help reduce the financial risks on both the client and the agency. Typically, a retingency agency will charge an upfront “container” fee that is generally a portion of the overall search costs. Once a job has been successfully filled, the agency will get the remainder of the fee.
  • Temporary agencies typically fill employee gaps with an increase in business or in a temp-to-hire situation. They’re often used in spikes in seasonal business or to fill roles for a specified time, such as when an employee goes on parental leave. A company pays the agency an hourly rate for the temp. In turn, the agency pays the temp an hourly rate and benefits, serving as a middle man. It’s great for your company because it reduces risk and you don’t have to bring on someone as a full-time employee when you don’t need them for the long-term.
  • Recruitment process outsourcing (RPO) agencies are brought in when a company transfers all or part of its recruiting process to the agency. Effective RPOs embed a dedicated, industry-seasoned recruiting team within your organization to tailor a solution to meet your unique business and talent challenges. Typically, the partnership helps you meet your goals and you can effectively have the benefits of both an in-house recruiting team and an agency at the same time.

Tying it all together

As you can see, agencies have their time and place and can thus be a useful resource for an organization. But once your company reaches a certain size, agencies shouldn’t be filling all of your open roles. This is mainly due to cost-per-hire, which you should try to minimize to spend the least you can for the quality of hire that you want.

Use what you have learned here to be strategic about when you choose to leverage an agency’s services. If you do have an in-house recruiting team, the goal should be to reduce dependency on agencies over a period of time for two main reasons: lowering your cost-per-hire and ensuring a consistent candidate experience.

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