Is recruitment moving back in-house?

December 14, 2010

The global financial crisis has, in many instances, decimated corporate recruiting departments in particular. After all and if a company is not hiring, there is little need to keep recruiters around on the payroll. Meanwhile, RPO is often billed as a cost effective alternative for dealing with such dramatic swings in staffing levels by allowing a company to quickly scale up or down without the need to first hire recruiters before any uptick and then lay them off again during the next downturn. However, just how effective is RPO or the use of any third party agency verses an in-house recruiting team and is there now a trend towards in-house recruiters?  

Is recruitment moving back in-house
A recent article in UK based Recruiter Magazine about the rise or re-rise of the in-house recruiter is well worth reading as the article noted the sign of a potential game changer in the world of recruitment: The fact that many companies now employ significant numbers of recruiters internally. In fact, the article noted that RBS employs a team of 400 recruiters while it quoted the head of recruitment at Capgemini Consulting as saying that between 80-95% of its roles are sourced directly or via staff referral schemes. Moreover, the article mentioned a couple of key drivers or reasons for taking recruiting in-house:

  • Cost. Recruiter quoted the recruitment manager at the British Heart Foundation as saying that in the two years since they have had an in-house recruitment team, spending on recruitment has fallen by 50% while agency dependence has fallen from 34% of vacancies to just 14% of vacancies.
  • Quality and Control. Recruiter also quoted other recruitment managers as saying that in-house recruitment teams allow an employer to better pick and choose talent plus in-house recruiters will have a much better understanding of the company culture and what a hiring manager really wants. Moreover, in-house recruiters are better able to control how an employer’s brand and the company itself is promoted.
  • Professional Networking Sites. Finally, Recruiter quoted one recruitment manager as saying that the rise of Linkedin and other such professional networking sites now allows in-house recruiters to reach out to potential candidates and others in their professional networks without the need of third party involvement.

However, Kelly OCG’s Global RPO Report 2010 still revealed that the popularity of outsourcing is growing and of those outsourcing all or part of their HR function, 69% outsourced recruitment in 2009 compared with 63% in 2008. Moreover, familiarity with RPO among employers had grown from 56% in 2007 to 65% in 2009.

Nevertheless and in a September 2010 Recruiter Magazine article, in-house recruiters and agency recruiters alike launched spirited defenses of their recruitment models with in-house recruiters noting that talent management is best done in-house while an agency recruiter noted that only agencies can offer contingency costs as they are paid based upon results.

Hence, we want to ask you our readers what you think: Is there really a trend towards recruitment moving back in-house and away from third party agencies or RPO? Or is recruiting perhaps moving towards a combination in-house and RPO model and away from third party agencies? Moreover, what is the trend at your company? Feel free to tell us what you think.


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