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6 Reasons Companies Outsource Recruiting

By Allison Reilly Wed, Mar 13,2013 @ AM

6 reasons companies outsource their recruiting

Why outsource your talent acquisition functions to an outside vendor? The obvious reason is, you're facing challenges with your existing hiring that you can't solve internally. What are some of these hiring challenges? Here are some of the common reasons organizations outsource their recruiting.

1. Having Trouble Finding Great Candidates

Yes, even in this economy organizations are having trouble finding the right people to fill their open positions. No, they don’t always have this problem because they are being too picky or because they want to pay a lower-than-standard salary. If the organization is serious about finding great candidates and getting those positions filled, then they may outsource their recruiting to source candidates in more places, to improve their employment branding, and/or work on the job descriptions for these positions.

2. It’s Taking Time & Resources Away from the Core Business

Not everyone is in the hiring and recruiting business, and even though most companies have some sort of recruiting function, sometimes it could take away from a business’ core. This is especially true for smaller companies, who might not necessarily have someone on staff to just work on recruiting. Here, outsourced recruiting helps them by allowing a consultant or a provider to do what they do best without taking away from what the rest of the company does best.

3. They Need to Reduce Their Turnover Rates

The turnover rate is the percentage of new hires that leave within a designated period, say the first month or two of the position. A high turnover rate can hurt a company’s bottom line, and is often a sign that there are bigger problems with the company’s recruiting functions, problems that aren’t necessarily fixed by increasing the salary or by doing a better job interviewing (although, both might help). In this case, an organization may outsource its recruiting to a recruitment process outsourcing firm to reduce the turnover rate as well as fix those bigger problems.

4. It Levels the Playing Field

Start-ups and smaller companies will outsource their recruiting because they don’t have the resources in-house to keep up with larger competitors. By outsourcing, they can level the playing field and not have to worry about losing good talent because the competitor did a better job of selling the position or offering better benefits.

5. Current Recruiting Functions are Out of Control

Companies who are on the fast track, or face seasonal cycles, often have recruiting functions that are tough to handle. Fast-growing companies are having a hard time keeping up with their hiring and recruiting, while those that are seasonal may need to hire many people very quickly, only for the rest of the year to be slower. Outsourced recruiting helps these companies handle the fluctuations, or could serve as a temporary solution to a temporary problem.

6. Need to Cut Costs

Companies outsource recruiting to reduce their costs, whether that’s labor costs, capital costs, or perhaps costs from the previous reasons. Perhaps, unfortunately, they can’t justify the staff anymore. Or, the company has already spent too much money on headhunters and recruiting fees that they’re looking for another way. Maybe the organization didn’t do a good job of creating a standardized approach to hiring, so outsourcing will provide the organization needed.

Keep in mind that outsourcing your recruiting is different from outsourcing your human resources, as the latter may include benefits, compensation, employee and labor relations, and legal issues as well as the recruiting. Although outsourcing your recruiting to a recruitment process outsourcing firm includes a cursory look and a revision of those aspects, outsourced recruiting typically looks at the hiring process from sourcing great candidates to the new employee onboarding process.

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Topics: recruitment process outsourcing, reasons to outsource, recruiting best practices