Outsourcing vs. In-House Recruitment: What to Choose?

Written by Siddhesh P | May 29, 2023 6:23:26 AM

Recruitment is an essential part of every organization. From startups to enterprises, using effective recruitment strategies can help attract new talent, which can help the business succeed.

69% of corporations in the United States are struggling to find top talent, according to Manpower Research. According to SHRM, the current job market is candidate-driven, as per 86% of recruiters and 62% of employers.

However, companies often face the dilemma of choosing between in-house interviewing and outsourcing interviews to experts.

In this blog post, we will explore the benefits of both outsourcing and in-house recruitment, along with key factors to consider during hiring.

Understanding Outsourcing and In-House Recruitment

In-house recruiting means creating a talent acquisition team within the organization. As a form of business process outsourcing (BPO), recruitment process outsourcing (RPO) involves outsourcing all or part of the recruitment process to an external service provider.

Here are some of the benefits of outsourcing interviews-

Recruitment expertise
Better Documentation (with Interview recordings)
Technical outsourcing makes hiring for tech positions easier
Cost savings during the recruitment
Positive candidate experience
Eliminate hiring bias

Factors to Consider When Choosing Between Outsourcing Interviews and In-House Recruitment

1. Company Size and Growth Stage

The size and growth stage of your company plays a key role in determining whether you should outsource your interviews. This is the first factor amongst other factors that you should consider for effective recruitment.

Small businesses, according to a National Small Business Association survey, outsource their recruiting process in order to save time and money.

On the other hand, approximately 70% of large companies outsource at least some of their recruitment processes to obtain specialized expertise and increase their talent pool, according to a study by Deloitte.

Small companies with limited resources may find outsourcing companies more suitable, while larger companies may have the capacity to manage hiring in-house.

2. Recruitment Needs and Volume Required

Consider the volume of hiring before making tech outsourcing decisions. High-volume hiring needs ample recruiting resources to execute in-house and attract quality talent.

On the other hand, big organizations can outsource their hiring needs to outsourcing companies when they are looking to close a number of positions quickly. Also, according to Career Builder, 66% of companies spent more time training and hiring candidates needing more skills.

Organizations with high-volume hiring needs are more likely to outsource recruitment to fill vacancies efficiently, according to the Society for Human Resource Management (SHRM).

Here's a free software development cost calculator you can use to understand the scope of your software projects.

3. Expertise and Resources

Before outsourcing skill-based jobs, you need to assess the ability of your in-house team and see what volume of recruitment the current team can handle. If they have the right skills and resources to handle recruitment effectively, in-house recruitment may be more suitable.

The HR Open Source (HROS) Foundation suggests that organizations that have skilled recruiters are more likely to manage recruitment in-house.

However, if you lack the expertise or resources, then outsourcing can provide a dedicated team of professionals, which can streamline your recruitment process and hire qualified and skilled candidates.

For instance, hiring for specialized skills such as React requires recruiters to have technical knowledge. In such cases, outsourcing may seem a more viable option

4. Time and Budget Constraints

Another important factor to consider before outsourcing is Time and Budget Constraints. Evaluate your requirements, and then decide whether to outsource or not.

Due to lower overhead costs and economies of scale, the Recruitment Process Outsourcing Association (RPOA) estimates that outsourcing recruitment can reduce hiring costs by 12-15% on average.

In-house recruitment may be more cost-effective for companies with steady hiring needs and available resources. Also, outsourcing can help you access experts from various industries and eliminate hiring bias. Another important advantage of outsourcing interviews is that it helps to reduce the burden on your in-house managers and doesn’t affect their productivity.

5. Skill Assessment and Specific Job Requirements

It is important to conduct skill assessment tests and understand the importance of skills required in specific jobs. Skill assessments help you hire candidates that understand the job requirements.

Specific job requirements, such as hiring skilled candidates in the technology domain, may require technical experts who can hire effectively. In-house recruitment usually lacks these resources.

In such cases, tech interview outsourcing is the best option, as you can evaluate candidates quickly and understand their strengths and weaknesses. Conducting coding challenges is also easier when you outsource the entire process to outsourcing companies.