In-House Recruiting Vs. Recruiting Company: An Analysis

Let's face it, taken management and talent acquisition can make or break a business; especially businesses under $10M in annual revenue. Uncovering the best approach to talent acquisition is a complex issue, and fortunately, it can be simplified substantially. This short read will examine the pros and the cons of two common methods: in house recruiting where a company does it themselves, and hiring an external recruiting company.

In-House Recruiting

Pros:

1. An in-house team or single employee know your business better than anyone outside the organization and they are able to speak to culture, policies, processes, etc. better than a recruiter.
2. An in-house team or single recruiter have a great grasp on the role you are hiring for. They know the responsibilities involved, the attitude and characteristics of the person you are looking to hire, and the metrics for success.

Cons:

1. Unless their job is recruiting all day, everyday; they are not as practiced as a recruiter whose only job is to find, entice, and present candidates to your company.
2. They likely do not have the same access to the technology tools, insights, and most effective practices.
3. They likely do not have as deep of a talent pool and network to pull from. In short, you may be missing the opportunity to interview and hire the best candidate.

Recruiting Company

Pros:

1. You are financially protected from a bad hire. Most recruiting companies will give a guarantee for 90 days (some for 180 days) which require them to replace a candidate that doesn't work out at no extra cost. This saves you the time value of your internal employees having to redo the work.
2. Larger network with better sourcing tools and methods
3. Oftentimes there is no fee unless you choose a candidate they refer, in short, lower risk

Cons:

1. Added cost. Great recruiting companies aren't cheap
2. Recruiting companies may not have industry expertise in your industry
3. Sometimes confidential information needs to be shared with a recruiter and the terms of keeping that information confidential should be under an NDA.

With these pros and cons in mind, we need to examine this on a situational basis. Roles such as IT, accounting, customer service, HR, and any unskilled or low skilled labor roles you company has can easily be recruited internally without sourcing that an incurring those costs.

Where the exception should be made is with sales roles. Recruiting salespeople is another animal all together. And salespeople are responsible for bringing the revenue into a company. Sales results can, and oftentimes do, have a substantial impact on company culture. If the sales team is crushing it, they are making money and they are happy, leadership is happy, the company can afford to give everyone raises and everyone is happy.

Conversely, when sales are slumping, or even if sales are going well but you've got some toxic attitudes within the sales team; it's very difficult for everyone to remain positive. Morale drops, and customers (and prospective customers) can actually FEEL the negativity of your company.

Hiring the right sales team members is perhaps the most critical department in a company, and almost as important as hiring great leadership. Get it wrong and you're in a world of hurt.

This is why it is highly recommended to use an external recruiter for sales hires UNLESS your company is large enough that you have employees who not only do ONLY recruiting, but recruit ONLY salespeople. If that's not the case for your company, you should be hiring a recruiting company to find you the best sales talent possible.

Deciding which recruiting company to use depends on a number of factors, but here are a few key questions you should ask:

1. Does your company recruit ONLY for sales roles, or for other roles as well?
2. How deep is your network and talent pool?
3. What is the average length of time between signing with your company and a candidate being hired and starting with our company?
4. Do you have any statistics on how long your average placement stays and how their performance compares to their peers?
5. What measures do you take to ensure a fit both in terms of skills and culture?
6. What is your fee structure?
7. Do you offer a guarantee?

This is where 8x Sales Training totally differentiates themselves from alternative options. 8x Sales Training only recruits sales professionals. Their talent pool is deep and their network is extremely wide; giving them access to some of the best sales talent out there. Their placements average 31% better performance than their peers not placed by 8x Sales Training , and they boast a retention rate over 90% of placements after TWO YEARS.

The vast majority of recruiting companies charge 20%-25% (or even more in some cases) of the first year on target earnings. This means a sales rep with on target earnings of $120,000 will cost between $24,000 and $30,000 in recruiting fees. 8x Sales Training works differently. They charge per hour and work more efficiently than other companies. Their average placement fee is $12,000 to $15,000 and they ALWAYS offer a "not to exceed" clause in their contracts which can be canceled AT ANY TIME if the client isn't 100% satisfied.

They guarantee their placements will stay for at least six months, and they are financially invested in that guarantee as they will replace any candidate that leaves at no additional cost. This is why it's so important to 8x Sales Training to get it right THE FIRST TIME. That's why they have a 90%+ retention rate after two years.

So, in summary, if you are hiring most roles at your company; do it yourself unless you simply do not want to bother with it OR you are hiring temp workers. If you are hiring sales people, use 8x Sales Training .