Using a recruitment agency can be better than hiring in-house. Yes, really.

When looking to hire, using a recruitment agency may have crossed your mind, but if you’re like most people, your first thought was to place a job ad. Or better yet, a free job ad. And that, my friend, is likely your first wrong turn.

A “free” job ad is never free

On the surface, placing a free job ad makes sense. It’s technically free, it means you see every person that applies, you get to make your own shortlist and then interview a bunch of people who seem good on paper. But when you think about it, it also means that you have to see every person that applies, you have to make your own shortlist and then you have to interview a bunch of people who seem good only on paper. Yeah, not so fun now. Especially given that over 90% of people that will apply are doing the “spray and pray” approach, essentially spamming your inbox, wasting your time and giving you grays. Maybe that’s why only 2% of job ads ever get filled…

Once you realise what a pain in the proverbial dealing with job ads really is, working with a recruiter is already starting to look like a decent option. But then you’ve heard bad things about them, too. You heard they spam you with calls, push the same candidates onto you and cost a fortune. Well, not quite. And definitely not if you’re working with them through Search Party.

This blog post is here to give you the honest truth about what recruiters do and how they can help you, the employer who wants to hire someone excellent, and how their work compares with doing all your recruitment in-house. Recruiters aren’t the end-all solution to your recruitment needs, but they can be a super effective part of your hiring mix. After all, we’ve bet our life on it.

What does a recruiter actually do?

Recruiters’ main responsibility is to source the best possible candidates for employers. Recruitment agencies have an impressive back catalogue of hiring ‘know how’ as well as tried and tested methods of getting optimum results for their clients.

Candidate selection and screening

When you first approach them about a role (directly or via Search Party), specialist recruiters will ask you about your company culture and values. They’ll also ask about your “dream hire,” including what sorts of skills, experience and character traits you’re after. They’ll guide you with questions to figure out the sort of person who would be successful in the role.

By understanding your wants and needs, recruiters can screen each candidate, not only for their skills but to see if their personality will integrate effectively and comfortably within your company. (Pro tip – beware of unconscious bias. Check out our post on how it can cost you dearly and how to avoid it.)

Getting the candidate excited about the job

A recruiter will also ask for as much information on your business as possible, so that when they meet with candidates that are suitable for the job, they can effectively “sell” the role to them. This is super important as many candidates are passive and may need this extra effort from the recruiter to consider sitting an interview. (Pro tip – a great way to boost visibility about your company culture is putting up a profile on JobAdvisor.)

Keeping the interview pipeline flowing

Once the recruiter has some people ready for you, they show you their profiles and help you understand what makes each person special. You decide who to interview and recruiters coordinate calls and meetings accordingly. They ensure the candidate is equipped for each interview. (Pro tip – when working with recruiters, give them feedback on each candidate after each interview. That way they can adjust who they send next and if a candidate is “the one,” quick feedback means you won’t miss out on a great hire.)

By the way, it’s also worth noting that recruitment agencies aren’t just for full time roles. They can fill contract and temp roles as well.

Search Party empowers its marketplace recruiters

At Search Party, we use data science to help recruiters find the best people for the role. Just as you, the employer, can search for candidates by skills and experience, recruiters have similar tools they can use to find people with great fit. We also help out by automatically flagging which of their candidates are “ready to move,” that is, who is likely looking for another job, statistically speaking. In general, the tools we provide for recruiters make their job a bit easier, which is why recruiters are able to accept lower fees through Search Party (say 13%) vs if you had approached them directly and they had to do the job from scratch, without any tech to help them (at 25%, for example).

Recruiter myths you shouldn’t believe

Over the years, recruiters and recruitment agencies have gotten a bit of a bad rep. As with many things, you shouldn’t always believe what you hear. We’ve actually written a whole other blog post on recruiter myths. Check that out if you’re interested. And if not, onwards with our topic at hand!

Hiring in-house vs using a recruiter

So now that you know what a recruiter does, a super valid reaction would be, “Wait a minute! I can do all that stuff.” Yes, you could. How well and whether you should are the questions you need to ask yourself.

Be realistic about the time commitment and think about the opportunity cost

On the surface, the work seems pretty straight-forward. What is not readily apparent is how time-consuming it is if you do everything yourself, especially if you’re not experienced in hiring. If you happen to be in HR, then you probably should do a lot of stuff on your own since that’s what you’re trained to do. For most of us, however, hiring is a huge time suck and, more importantly, it creates a significant opportunity cost.

We recently ran a survey in the UK and it turns out that 86% of people spend about 10 hours a week on hiring. That’s people who don’t work in HR. On a 40 hour work week that’s 25% just on hiring! What about time to do your actual job? Well, at least half the people we surveyed say they do the work at home, outside business hours. So that’s not good news either. 

If you’re doing it all yourself, all the activities involved add up. There’s researching and writing the job description, posting ads, promoting your role, screening incoming resumes, scheduling interviews, holding interviews, feedback to candidates, scheduling more interviews, and if all goes well, salary negotiation. Little by little you have your 10+ hours per week and what’s more, research shows that end-to-end you’re looking at 60+ days to hire someone. Think about all the things you could be doing with those 10 hours over those 8+ weeks. Think about the cost of your salary that’s instead dedicated to hiring. DIY isn’t cheap in this case.

Benefits of hiring in-house

The point of this post isn’t to say that recruiters are the end-all solution. They’re not. In fact, there are some things that you’ll probably always do better in house. Some examples:

  • You’re the best judge of cultural fit. End of story.
  • Hiring in house means you can create positive interpersonal relationships with the candidates.
  • If you meet someone that’s not right for a role, but may be an awesome cultural fit, you can turn to this person at a later time.
  • You’re in control of everything, end-to-end.
  • Recommendations from current employees are a great way to hire people, not just because the current employee can judge cultural fit, etc., but also because they’re responsible for introducing that person and are unlikely to vouch for a dud since it’s their reputation on the line as well.

Getting the recruiter and in-house hiring mix right

I’m a firm believer in a balanced approach to everything, including hiring. Even at Search Party, there’s a member of my team who came in on a staff referral, another that did a small project as a freelancer and I ended up hiring him, and two others who I sourced via Search Party recruiters. As the company that preaches the awesomeness of recruiters for a living, we don’t hire exclusively using that method, but we do love it!

You too should strive for a balanced mix. If you’re hiring super hard to find roles, you might use recruiters more. If you have a really strong employer brand, you may not need recruiters (or job ads for that matter!) because you’re getting heaps of amazing referrals. Judging from personal experience, however, I can tell you that using recruiters does save you heaps of time. And the added benefit of working with recruiters through Search Party is that it also saves you money vs going to an agency direct (See “Search Party empowers its marketplace recruiters” section above).

As you evaluate when and in what capacity you should use recruiters, consider the following:

  • Do you have 10 hours per week to dedicate to hiring? Or is that time better spent elsewhere?
  • How strong is your brand? Should you try getting internal referrals first?
  • How specialist is the role? Super specialist people don’t necessarily look at job ads so you’re unlikely to reach them with a DIY / job board approach.
  • How in demand is the role? Especially in context of your employer brand strength?
  • Are you hiring one or many people for the role? You may get an even better rate if you’re hiring multiple people.
  • Do you actually enjoy hiring? If not, then you know what I’m going to say :).

Learn more about hiring

If you’re new to hiring or are back at it after a break, a bit of reading can’t hurt. Check out our ebook, “Hiring 101” and all other great resources we’ve compiled. You should also read “How much the wrong hire will actually cost you” to see just how important it is to get your hiring practices right. As always, feel free to post any questions in the comments section and we’ll be happy to help. Good luck with your next hire!

If you’re ready to give recruiters a go, use our recruitment marketplace to find your next candidate quickly and easily. You can sign up for a free account and start finding recruiter-represented candidates today. You share your job brief with as many recruiters as you want at once, so multiple pros can go to work for you ASAP. The result? Average time to hire of 17 days! If you start today, you can have a new employee in just over two weeks. How cool is that? Sign up now.

Magda Walczak

Magda Walczak is the Chief Customer Officer at Search Party, the world's first marketplace that connects employers, recruiters and job seekers. She's a passionate supporter of animal rights and author of Saylor's Tale, a children's book promoting responsible pet ownership.

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