Tom Sweeney

It's a coming of age tale….

Corporate VS Agency Recruiting: Who’s better at it?

Posted by sweens on March 5, 2009

I am sure people often wonder who has a better recruitment process; a recruiting agency or an internal HR department. Simple answer – the agency! I am sure I just upset any corporate recruiters that are reading this but I think the processes for both are vastly different. Granted I have never been in a position where corporate recruiting has been my practice but I simply can not see the same quality coming from a HR department then one coming from an agency.

I see this for a few reasons. First, in order for a recruiting agency to be truly successful they need to be continually recruiting, out in the labour market, continually talking to candidates, following industry trends, etc. This way, when they get a position to recruit, they know what is going on, where to look and who is available. I do not see this being a regular occurrence for an HR department for a few reasons.

First, let us look at the annual growth of a company. Obviously that number has dropped recently, but a successful organization will grow at around 20% during a big boom. Say you have a company of 100 people and they are going to expand by 20%. You are talking about acquiring 20 people in 365 days. The level of positions will obviously vary and so will your recruitment practices. Of those 20 positions 10 will likely be hired through referrals from friends of friends of former colleagues. We do after all live in a world where the most hires come from jobs that never get posted.

So now we are really talking about 10 jobs or so. 10 jobs over 365 days equates to just over a month to fill each position. Is that really enough work to justify hiring an employee who is dedicated to recruiting? Likely not! That being said, paying the ‘body’ to do the sourcing is not the only expense.

In order to be effective in your searches and truly tap into the labour market, candidates need to be found on alternative platforms other then job boards. The tools to find those candidates are not cheap. One of the most useful tools a recruiter has is an applicant tracking system (ATS) which will store resumes, notes on candidates and build a database of candidates for future positions. Add all those up and then add your recruiter salary, and you have got a pretty big expense.

With the lack of work for your recruiter and the cost associated with the recruitment at a level that would compete against the quality you would get from a recruiting agency, you may not be looking at the best solution for your company. You may want to consider paying the placement fee rather then the burden mentioned here. Not to mention that having an agency send you resumes cost you nothing.

The ability to find a position that needs to be staffed quickly is the business of a recruiting agency. They are always looking for top quality candidates and are ready to go quickly once the position has been qualified. If you are using someone who is not working on concurrent searches then their process gets drastically slowed down because they have to start their recruitment process for each and every position, rather then coming out with all cylinders firing.

Compare it to a race. Would you rather have your car running and in gear waiting for the light to turn green? Or would you rather be in park with your engine off and then get going once the light goes green?

One Response to “Corporate VS Agency Recruiting: Who’s better at it?”

  1. Stephen said

    I was agency, now corporate and can tell you – I wouldnt even call Corp recruiters – recruiters. They are just HR processors sitting at the end of their corporate career site scanning resumes. Many Hiring managers want to see all the applications – so all the rctr does is push a button forwarding the resume to HM. Corp Rctrs don’t sell, don’t deal with objections, rarely negotiate salaries, don’t interview, don’t use the phone, don’t prospect. Most Corp recruiters faint at the tought of giving their email address or phone number out – they don’t want to deal with applicants. The problem with Corp recruting teams is they are lead by non recruiting HR managers rotating through HR. They get no training, no goals, no metrics and no credit. Their job is to process applications.
    I believe, after this recession is over, in this new very lean global economy, corporations will finally have to put the financial ROI microscope on HR and Recruiting and be required to show their value. I am afraid, that with non progressive companies who have poor to mediocre talent management, many corporate recruiting teams will be seriously struggling to deal with the demands of the talented and savvy workforce environment where the talent have the upper hand, who see through old style management and employee treatment.
    To me, unless corporate recruiting teams drastically improve their processes and results, they will face outsourcing like payroll, cobra and benefits. Companies cannot afford to keep inefficiencies any more.

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