The success of any business can be linked directly to both the quality and volume of talent it possesses. However, accessing and securing skills that will propel a venture to the next level can often be more difficult than originally anticipated.
In fact, according to PwC’s 2019 CEO Survey the availability of talent is the number one business concern for top bosses in the UK, with 79% citing this as their primary worry. This is despite the same report finding that 61% of UK CEOs expect to increase headcount in 2019, which is notably higher than the global average of 53%.
The ‘in-house vs. agency’ recruitment predicament is familiar to many firms with plans to expand their teams - but which option will really achieve optimum results?
In favour of agencies
According to data from the Recruitment and Employment Confederation (REC), the UK staffing market was worth £35.7 billion in 2018. The trade association also revealed that there are now in excess of 30,000 recruitment businesses operating in Britain, employing approximately 115,000 people. Together, these individuals placed 1.1 million people into permanent jobs in 2017/18, and were responsible for placing more than a million agency workers on any given day.
However, while the sector is clearly lucrative, what benefits do businesses gain from choosing to appoint an agency – or multiple consultancies - to manage their hiring?
Recruitment firms often cite established relationships with jobseekers and superior market knowledge as key differentiators - and it’s true that many specialise in niche sectors where talent is scarce and candidate pools are limited.
According to LinkedIn Business Solutions, only around 30% of the global workforce is actively seeking opportunities – and specialist consultancies also habitually promise they have unique access to passive candidates who would otherwise remain undiscovered.
However, amid the rise of digital technology, an increasing number of businesses are realising the benefits of bringing recruitment in-house.
The growth of internal talent acquisition
In recent years there has been a marked increase in the number of companies choosing to establish their own internal talent acquisition functions – and although there are many contributing factors to this overall shift, this change has ultimately been enabled by the growth in online sourcing platforms.
While it would be remiss to discount the value of the market knowledge that recruiters have long traded on, specialist agencies are no longer the gatekeepers of niche and highly sought-after professionals.
In the past, decision makers have instinctively turned to external recruitment partners because of the access to talent they promised – but now digital technology has levelled the playing field, the benefits of managing recruitment in-house have never been more compelling.
As the ‘war for talent’ intensifies, high-value candidates are seeking more than a call from a recruiter with no vested interest in the company – or the role they are selling – when deciding on their next career move. Internal talent acquisition teams are perfectly placed to communicate their company’s employer brand – and at a time when, according to Glassdoor, 84% of professionals would consider leaving their current role if they were offered another in a company that had an excellent corporate reputation, it is clear that being able to share authentic messages is key.
Rather than viewing each role in silo, dedicated in-house recruiters also have the freedom to flex job specifications so that workforces run to optimum efficiency. By matching a great candidate’s skills to business needs – rather than working to a ridged shortlist index – firms can ensure there are never skills gaps, or skills surplus.
Through taking a more holistic and strategic approach to hiring, internal teams can also ensure that future talent pipelines are built and that diversity and inclusion initiatives are monitored and managed well.
In-house vs. agency recruitment: which wins?
While, historically, recruitment agencies have promised unrivalled access to top talent, in the digital age this USP is all but redundant. Through putting in place systems to manage talent acquisition internally, businesses retain control of brand messaging and build workforces which are conducive to long-term success.
And with the REC finding that each hire, on average, costs £4,238 when filled through an external agency, the financial benefits associated with developing an internal recruitment function shouldn’t be overlooked.
If you’re looking for support building an internal talent acquisition function, get in touch today.