Recruiting agencies: benefits and disadvantages

Should recruiting be outsourced?

According to the ManpowerGroup data, recruiting gets more complicated year by year. Currently, the talent deficit is at its 15-year high (45%), and employers take a lot of time to find candidates with the required skill set.

Every company trying to expand its staff encounters this problem. Meanwhile, the recruiting process itself and the techniques/methods used there don't get any simpler. According to USA Today, candidates ignore recruiters much more often than before, with 20–50% of candidates never showing up to the interview or on their first day at the new company without any explanations. Recruitment professionals call this kind of behaviour ghosting.

At some point, employers get so many candidates at the screening and interview stages that they have to choose whether to create an in-house recruiting department or outsource it.

Here, we discuss whether recruiting agencies are worth the hassle, whether your company needs this kind of help, and whether recruiting agencies are to be trusted.

Why would you need a recruiting agency in the first place?

Recruiting agencies are intermediary teams that find candidates for their clients according to the specifications provided. They do candidate search, screening, interviewing, and background checks.

What kind of tasks the recruiting agencies tackle?

When a company outsources its non-core activities, it can finally focus on its business operations, believes Milan Yager, Executive Vice President at National Association of Professional Employer Organizations. Statistics show that business owners and top managers spend over 40% of their time tackling recruitment-related issues.

Task 1: cost-cutting

According to Glassdoor's 2019 data, an average US company spends $4,000 to hire a new employee, and it takes up to 52 days to fill a job opening. The figure can be cut by 20–30% by outsourcing recruitment to an agency since it already has a candidate database and established screening methods. 

But wait, there's more: many agencies offer a warranty on the candidates they select — if the new hire fails its probational period, they will find a replacement free of charge. Indigo Tech Recruiters is no exception.

Moreover, it takes a massive database to find latent talent, and it's just inefficient and pointless for a product-focused business to maintain a database like that.

Task 2: enhance coverage

It has become a consensus among experts that the labour market has been dominated by candidates, not employers, for a long time already. Year by year, superb candidates with relevant experience and skills are becoming fewer and farther between than the companies looking for such specialists.

Also, the agency's help may come in handy for those in need of niche professionals.

 It's a great look to find someone like that looking for work. However, recruiters usually have to show exceptional versatility to find and hunt candidates of this kind.

The COVID-19 pandemic has complicated headhunting even more. Having seen much downsizing throughout the challenging 2020, many candidates fear to change jobs. This situation has made it even harder to hook passive candidates—those not looking for new employment but open to attractive offers.

According to the 2020 LinkedIn Report, 90% of candidates show at least minimal openness to new offers, but only a third of them are ready to change jobs. On the back of the new trend, effective sourcing has gained utmost importance. According to GEM, about 40% of businesses highlight this tool as a separate direction in their recruiting efforts. 

Recruiting agencies' experience is hard to underestimate in this context. Experienced recruiters won't bombard all candidates shown by LinkedIn's filters, hoping for a lucky response, and won't waste the company's time on irrelevant candidates.

Task 3: selection transparency and quality

Having an idea of their own about what the dream professional should be, an in-house specialist can afford to spend much time selecting a candidate and be very discriminatory while at it. Recruiting agencies are interested in the result first and foremost. Besides, there is a high chance that the agency's recruiters will be less biased while selecting candidates.

Even if the in-house recruiter is perfectly correct and qualified, the candidate will believe they are biased because a person working in the company just can't say bad things about their place of employment. The advantage of involving an external specialist is that they become an objective and independent party in the negotiations. Therefore, candidates are more likely to believe what they hear.

The Society for Human Resource Management (SHRM) data shows that over 60% of candidates go away because of how protracted and opaque the recruiting process is. This is the key takeaway the candidate will get and broadcast into the world. According to TalentLyft's survey, 97% of candidates are likely to recommend a company they had a positive impression of during the recruiting process. Besides, 51% of them will communicate their impressions on social media.

Task 4: mass sourcing

Chain expansion, the opening of a new branch, new offices and challenges—in the situations when a lot of job openings need to be closed quickly, an in-house specialist is likely to get buried under this mass of work. In such cases, recruiting agencies can be a saving grace, enabling faster filling of vacant positions.

Task 5: employer brand development and team building

According to the GlassDoor data, 76% of recruiters believe attracting new talent to the team to be the number-one objective. However, only the companies with large HR departments can afford to do that without losing sight of the existing team and employer brand building.

Sometimes, you need to focus on retaining the existing team and ensuring a productive atmosphere in the company instead of closing the staff gaps.

Besides, recruiting agencies often provide valuable feedback regarding the vacancy and related internal processes in the company, which comes in real handy in managing the team.

What kinds of companies do require recruiting agencies' services?

The involvement of intermediaries while hiring is a must for multiple kinds of businesses:

• Small companies that have no HR departments or even a dedicated specialist qualified enough to select and test candidates
• Companies that need to recruit a lot of staff fast
• Businesses looking for niche or rare specialists/top managers
• Teams whose HR specialists are overloaded to the point of failing to meet task deadlines
• Companies that need to compare professional qualifications of internally and externally sourced candidates
• Those who want to do confidential recruiting
• Businesses that want to cut recruiting expenses

According to the Human Capital Benchmarking Report, it takes 42 days to fill a vacant line manager position. Factor in the adaptation period and probation—which the new hires may fail to pass, a bad thing in itself—and other unforeseen circumstances, and the period during which the business suffers losses or underperforms becomes legit scary.

All in all, it's you who decide where to turn for help in recruiting new talent. In-house recruiters and recruiting agencies have their benefits and downsides, so you need to choose whichever fits your company's needs at the moment. Every in-house recruiter discovers sooner or later that the market is seemingly exhausted, and the vacancy to be filled is looming right ahead together with the deadlines and company losses.

If you choose to involve an agency, go with our advice to get the most from your cooperation:

• Define tasks and search criteria, come up with your dream candidate's profile
• To some extent, a recruiting agency becomes your business partner, helping you complete your team without wasting time and money on irrelevant candidates; make sure to research the agency's reputation and find honest opinions about it
• Maintain contact: professional recruiters won't go under the radar themselves, but you need to keep pinging them for the vacancy status, too
• Be flexible: any vacancy has principal requirements and those that can be adjusted if you find a candidate outstanding in all other regards
• Be honest: knowing about the vacancy's strong and weak points, a recruiter can select a specialist that won't leave at the sight of first difficulties and will be ready to work on your conditions