Have you ever weighed the true cost to your business?
With every business decision you need to weigh every pro and con. Margins of error are small for everything you do, and this might go especially for the people you hire. There are any number of ways to bring people into your organization, with some methods having much higher success rates than others.
I wanted to address the internal recruiter vs external recruiter dilemma.
First, you need to hire an internal recruiter. The average salary for an internal recruiter is around 60,000 to 70,000 dollars a year plus benefits. So, let’s call it 65,000 a year. You might now have a knowledgeable recruiter working inside of your company, but it wasn’t always so: in the beginning you would have had to train them to processes, company culture, and the way ‘you do things’. Finally trained up, her or him will be taking care of your hiring from within and without.
External recruiters are only in the business of finding you the best people, from outside your organization or inside of it. Some will be sector specialists, others will be wide generalists. Most external recruiters have reach into global markets based on experience and length of time in business. The expertise for headhunting and recruiting methods are well understood and implemented as a program to finding your best candidate fit.
There is this idea across almost every industry, that expertise can be hired into a company at a discount. As the saying goes, you do get what you pay for. So, the likelihood that your internal recruiter is junior to middling is quite safe to say based on the average salary. People will always say an external recruiter costs more, so the decision to hire and internal recruiter looks appealing.
Let’s take a closer look.
Your internal recruiter won’t always be busy.
Recruiting should be 24/7, but that’s not the way most internal recruiters work. They will respond to an internal request when needed; depending on the size of your organization, your internal recruiter could be under utilized even while you’re paying her or him.
The influence of nepotism and internal politics.
An internal recruiter is susceptible to the pressure of internal politics and even nepotism to hire from within. Even if the candidates come in from the outside for interviews, the internal recruiter will not be senior enough the control the process. It’s easier for others more senior to step in and push for their favourite, rather than a more objective review of qualifications for the position.
The internal recruiter will be steeped in your existing culture.
But is that a good thing? So many companies have dysfunctional cultures, or no culture at all. However the internal recruiter is trained, will reflect the kind and quality of the candidates who come for interviews. If there is a bad culture, confused culture, or really no culture at all, your internal recruiter will not challenge the status quo and bring people in who will possibly make matters worse for your people, your operation, and your reputation.
An external recruiter will likely be seasoned and experienced.
And you can pick from years of experience, sector expertise, or added value the external recruiter brings to the table. An external recruiter won’t have a dog in the hunt when it comes to your inner politics and will guide the process with methods that will really let you see into candidates. The job for an external recruiter is finding the right fit. An excellent recruiter will also help identify the areas in your culture that can be improved to authentically attract the very best people to your business.
An external recruiter won’t be swayed by nepotism.
A good recruiter will have processes that identify the key contact and key stakeholders involved and work a streamlined process to get you the best candidate. The process can take longer than in the case of an internal recruiter, mostly because a good recruiter won’t let you skip steps or shortcut the process of bringing the right person in. The right human resources are the most important thing for your business.
The external recruiter works until the work is completed.
A good recruiter won’t work on contingency for you and, in my view, hiring a contingency firm to do your recruiting is to let speed take precedence over quality, quick transactions over truly strategic decisions, decisions that have short- and long-term consequences for your business. The candidate failure rate for contingency firms is much higher than for retained recruiters simply because the contingency recruiter wants a fast hit – after all, they don’t get paid until they find you someone. So, while you might get a candidate quickly, the likelihood of them being the best person for the job, and the person who stays with you, drops dramatically. Commission salespeople always want to close the deal as quickly as possible, and this drive for speed undercuts quality and outcomes for you. As the saying goes, measure twice, cut once. Contingency recruiters largely go by the reverse adage: measure once, cut twice.
On the face of it, hiring a retained recruiter or search firm seems expensive when compared to hiring an internal recruiter or a contingency recruiter.
But when you really think about it and break it down, the retained recruiter or retained search firm not only adds a lot of experience and value to the process, but retained search firms actually cost you less in the short-term and the long-term compared to hiring, managing, and maintaining your internal recruiter resource. A retained recruiter or retained search firm won’t cost you benefits, or sick days, or holidays, or maternity leave. They will only take a percentage of the salary of the person you hire, which is almost always less than what you would pay an internal recruiter when you add it all up. Additionally, should you have hired someone without external assistance from a search firm and it was a bad hire, you have the soft costs of the employee such as their training costs, the cost to sever, and the cost of brand impact both internally and externally with your customers. External recruiters and search firms have a higher success rate in bringing in talent which will lead your hiring process, providing best practices that lead to better candidates and candidate success.
If you are looking to hire an external recruiter again or for the first time, it’s worth noting that you don’t have to go to the largest recruiters to get quality results. In fact, it’s usually the opposite.
Smaller firms are often started by those who once worked at the larger firms. And smaller retained recruiters understand and have the national reach (or international reach you need) because of easy access tools and channels available online. The sad fact of larger retained recruiters is they have more mouths to feed, bigger lease costs, and a very large overhead that drives them to make decisions that aren’t always as good for your business, like putting a junior team on your account after you meet the Partners, and then charge you senior rates. The smaller firms have the same or more expertise than the larger recruiting firms do, and the likelihood is you will be working with the Partner of a smaller firm from start to finish. Smaller retained recruiting firms are more responsive, nimble, and get to know the client and the client culture better than a larger retained recruiting firm that by its nature and size will be much more transactional. Smaller retained search firms are more relational, driven by innovative and new ways of thinking and doing, and can provide more than well-researched candidates, they can offer an experience, attention, and a result you likely won’t get with a larger search firm.
Bigger isn’t always better for you when it comes to retained search firms. Bigger means higher fees, slower times, standard ways of thinking, and more junior people handling your account and making decisions.
Because bringing the right people into your organization is the most vital thing you do as a business, it’s important to take some time and think through the pros and cons of finding the help you need to hire the highest quality, best-fitting people you can.
Do you need help recruiting the best people? Reach out to our recruiting team at firstname.lastname@example.org
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