Why Do Most Companies Outsource Recruitment?
The most important decision you make is hiring the right people to represent your business. There are several excellent reasons to outsource your recruiting and many benefits you will realize from doing such. Whether you are looking to outsource all or part of your recruitment process, or you need to find those key individuals to round out your team, recruitment consultants have the experience and resources to help. Why do so many companies outsource recruiting? Here are a few reasons:
1. It Allows Them to Concentrate On Their Core Business
Most companies are not in the hiring and recruiting business, even though larger companies may have some kind of a recruiting function. In either case of smaller or larger businesses, recruiting new associates can take you away from your core business. This is especially true for smaller companies that probably don’t have someone with recruiting expertise or dedicated to the function. Outsourced recruiting is advantageous because it allows the recruiting firm to do what they do best, and gives the company more time to concentrate on what they do best.
2. Cost Containment
The second largest reason that companies outsource recruiting is to reduce their costs. In addition to labor costs, there are other additional fees that go along with recruiting such as placements on job boards, background screening costs, to name a few. Sometimes the organization didn’t do a good job establishing a recruiting protocol, so the results from the function have not been beneficial enough to justify the expenditures committed. It becomes an easy decision to let an outside vendor with the expertise handle the recruiting function.
3. Recruiting On Their Own Isn’t Finding Qualified Candidates
Even in a down economy, some organizations have difficulty finding qualified people for their open positions. The problem may have nothing to do with compensation or the close scrutiny on the applicants. Many times the problem is due to the limited locations they are sourcing. Recruiting firms source candidates in more places, and have access to the passive candidate pool as well as the active pool.
4. Their Turnover Rate is Too High
Turnover has a negative impact on most businesses and a high turnover rate can impact a company’s profitability. Often times, a high turnover rate is an indicator that there are bigger problems with the company’s recruiting function. The problems may not be due to the compensation or qualifications of those working on the function, and sometimes are not easily known. Rather than continuing to struggle with the financial impact of high turnover, an organization may decide to outsource its recruiting to a firm that specializes in this function.
5. They Can’t Keep up With Demand
Rapid growth companies, or those that have seasonality, often have difficulty keeping up with recruiting demands. Fast-growing companies many times can’t keep up with hiring and recruiting, while those that have seasonal fluctuations may need to hire a lot of help very quickly, and then be faced with adjusting to a typical labor force the remainder of the year. Outsourced recruiting helps these companies handle the high demand and the seasonal fluctuations. There are several different recruiting programs geared to these situations.
6. It Allows a Company to Better Compete
Start-ups and smaller companies don’t have the resources to recruit top talent and keep up with larger competitors. However, by outsourcing the recruiting, they “level the playing field”. They won’t necessarily lose good talent to their larger competitors because the competitor appears to be a more attractive choice for the candidate. Outsourced recruiting firms can sell the opportunity and work with the candidates on the pros and cons of opportunities.
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