Which way for businesses: In-house recruiters or external agencies?

As the war for talent rages on, businesses are forced to make a decision: do they use external recruitment agencies? Or, instead, grow and build in-house recruitment teams to do the job?

Recruitment, recruitment, recruitment. With talent pools tightening and retention strategies constantly evolving, recruitment is a mainstay for an Australian organisation attempting to grow its business outcomes in what has been a volatile economic climate.

HR Leader recently spoke to Richard Triggs, founder of Arete Executive and author of Winning the War for Talent, about how Aussie businesses should navigate the decision of either relying on in-house recruiters or reaching out to external recruitment agencies.

“Over the last 10 years or so, we have seen a significant increase in organisations building their own recruitment teams rather than relying on external recruitment agencies. Especially utilising LinkedIn Recruiter licences, there is a widely held belief that in-house recruiters can do as good a job as external recruiters for a fraction of the cost,” said Triggs.

Although the trend of Australian organisations building their own recruitment teams has grown substantially over the last decade, the process isn’t all sunshine and rainbows. Instead, it can present common problems that leave managers shaking their heads at the shortlisted candidates.

“In many instances, line managers continue to be disappointed with the quality and quantity of candidates presented on shortlists. Why is this so? The primary reason is that there continues to be too high a reliance on advertisements to generate candidates, or sending LinkedIn inmails (which largely has the same issues as running advertisements),” said Triggs.

“Great candidates are typically in jobs that they enjoy, they have a good relationship with their boss and peers, and they are relatively well paid. As such, they are not proactively looking for a new job. They are not looking at job ads and are not typically replying to LinkedIn inmails.”

“Passive” candidates is how Triggs describes these workers; it’s a term that has been mentioned frequently on HR Leader. Acquiring the attention of these “passive candidates” requires a constant recruitment campaign, said Triggs.

“If you want to attract these ‘passive’ candidates, you need a comprehensive recruitment campaign that should include a strong focus on generating referrals (something most companies put very little attention on), and more importantly, you need to headhunt, especially for senior leadership and/or mission-critical vacancies.”

External agencies often have the resources and protection to produce these comprehensive recruitment campaigns, whereas in-house teams can run into some obstacles.

“Unfortunately, in-house recruiters have some major obstacles to headhunting. Firstly, they can’t maintain the confidentiality of their employer as they need to disclose who they work for,” said Triggs.

“Secondly, because most in-house recruiters are working on a large volume and diversity of vacancies (in many instances 30-plus roles, from receptionist to C-suite), they don’t have the time to headhunt.”

“Finally, most recruiters (in-house and third party) don’t want to headhunt, and lack the training to do so effectively even if they want to.”

Overall, Triggs expresses the common pitfalls that in-house recruiters can fall into and some of the glaring obstacles that they must avoid due to the position in which they reside.

“If your in-house recruiters only rely on advertising, then at a minimum, they MUST put their name and phone number on the advertisement, so that candidates can ring and ask questions. Most ads are just a regurgitation of the position description, offering very limited detail. Quality applicants will want to know more before applying, especially if they currently work for a competitor,” said Triggs.

“If there is no one to ring, they simply won’t apply. Yet I would say that 95 per cent of advertisements run by in-house recruiters have no name or phone number. Think of how this limits your ability to attract top talent? Think of how this affects your employer of choice brand? If your recruiters aren’t putting their name and phone number on the ad, then they are in the wrong job.”