Agency, RPO, or In-house: Which is the Right Fit for Your Recruitment Needs?

In a competitive talent market, the success of your business hinges on your ability to recruit and retain the right talent for you.

At some point in the journey of a business, you will need to add new talent to the team quickly and choose between setting up in-house recruitment or outsourcing the hiring process.

But, how do you know which method best meets your needs? What are the pros & cons? Depending on your needs, there are good reasons for going either way.

In this blog, I’ll run you through the main benefits of all, what motivates them, and what to consider before making your decision!

Recruitment agencies

Headhunting & recruitment agencies source and place candidates across multiple levels and job functions. Individual recruiters service many clients and roles at any one time, though often within a niche.

Fees are based on a ‘per placement model’ where agencies negotiate a fee for successful hires or a retainer model where they carry out a campaign while paid a negotiated retainer fee, therefore they sometimes have to prioritise higher value client accounts to maintain a good relationship and to maximise revenue.

Recruitment agents are measured on selling the agency’s services and sourcing candidates, meaning their days are split in terms of these duties. When using agencies you’ll be sharing your recruiter’s time with multiple other clients, but also benefit from very deep knowledge of their verticle, access to cultivated networks and urgency to provide results. This can mean quantity over quality for lower quality agencies, however a high quality, well networked agency will often provide a small shortlist of precisely the right candidates for the job very quickly.

When to use an agency?

  • If the hiring needs are urgent or niche and cost-per-hire isn’t an issue.
  • Where the network of the individual recruiter is deep enough to reach candidates that are difficult to find (such as hard-to-find contractors, senior leadership staff or niche technical skills).
  • When you want to augment in-house teams or busy leadership teams during high-growth periods, to allow them to focus on more critical permanent hires, long-term goals and strategy.
  • If you need help with just a few roles and don’t have the resources to hire and set up an internal talent function just yet.

It’s important to research your agency partners’ strengths thoroughly as most agencies without the network will use the same tools as your internal talent team or RPO would whilst being more expensive on a per-hire basis. But the most important thing you can do is identify a fantastic individual recruiter as they often carry their candidate book with them across multiple agencies and their skillsets are highly curated for your needs.

RPO - Recruitment Process Outsourcing

An RPO is either a recruitment agency that offers RPO services or an RPO only organisation. They’re equipped to look after some or all of the recruitment process on behalf of the client, often as an extension of the in-house talent or HR team.

Most RPO organisations focus on sourcing candidates and operational aspects of the recruitment process. They provide a talent partner to focus on your needs, to come on site (either physically or remotely) usually for 3-12 months over a period of high growth. After immersing themselves within the organisation they’re in a better position to represent the brand, values and culture of the company than an agency.

RPO’s are typically measured on hiring KPIs only such as number of roles filled and time to hire, meaning they will try to fill as many roles as possible – but they might not ask questions about why those roles exist or put huge amounts of energy into employer brand.

When to use RPOs

  • In a period of fast growth where no other internal team is able to carry out the operational workload.
  • When you don’t need specialist focus but need high volume.
  • When you want an injection of market knowledge and some guidance and feedback on your talent processes, but are not looking for in-depth talent strategy.

Though some RPO organisations have incredibly skilled talent partners who know huge amounts about the market and talent strategy, partners with that knowledge are often sent to work on key growth accounts, so finding that expertise may be a tad more difficult.

The permanent in-house talent team

The permanent internally recruited talent acquisition teams have a wide variety of responsibilities from employer brand & talent strategy, to managing stakeholders (including any partner agencies/RPOs) – all while advertising jobs and sourcing candidates using most of the same tools available to RPOs and agencies.

In-house recruitment is typically more proactive than agency and RPO recruitment. The team could be working closely with hiring managers to work out who will be needed much later down the line, and streamlining the overall talent processes from sourcing to onboarding. In-house teams will also build your internal candidate database to tap into in the future, and offer a level of depth and understanding of the roles, company & culture that RPOs and agencies lack.

In-house teams are typically incentivised on multiple metrics such as number of hires in a period of time, time to fill, interview process feedback and contributions to employer brand and company culture. They often challenge role responsibilities and put in the work to uncover your true hiring needs. They’re therefore the most closely aligned to the company’s long term goals of the three options.

When to use an in-house talent team

  • They often shine brightest when hiring for permanent roles that will have a big impact on team output and company culture (such as leadership, engineering or any core business roles like marketing and finance).
  • When you need to save money on recruiting fees.
  • When you want to own and manage the sourcing and recruiting process as you see fit.
  • When you want to build up or define your employer value proposition and talent strategy in the long-term.

They often shine brightest when hiring for permanent roles that will have a big impact on team output and company culture (such as leadership, engineering or any core business roles like marketing and finance).

When you need to save money on recruiting fees.

When you want to own and manage the sourcing and recruiting process as you see fit.

When you want to build up or define your employer value proposition and talent strategy in the long-term.

To sum up

Recruitment functions and their overlap - RPOs, agencies and in house teams

The bottom line

The good news is that in-house recruitment and external help don’t have to be mutually exclusive. Often combining parts of each will bring best results and create the most candidate friendly process. Sometimes adding an extra layer of communication between yourself and the candidates may not feel comfortable – then again, taking pressure off the in-house team for specific roles or bringing in fresh perspectives from outside might be just what the doctor ordered.

Juno Talent is the culmination of all these things: candidate pipeline building, talent acquisition partnership, talent strategy and EVP/employer brand design, with the ultimate goal to help clients build or scale their internal hiring function. It’s the perfect solution for early-mid stage companies who want to start on the right foot with talent processes, strategy and brand, while hiring roles as quickly as possible and working towards a strong internal function to minimise excess spend.

Whichever approach you choose to take, make sure to consider your needs and budget, and talk to any potential external partner to find out how they can benefit your organisation.

Jenni Murto

Commercial Operations Manager at Juno Talent

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