In-house vs agency recruitment: The pros and cons of careers in recruiting
As the Great Resignation persists, the value of a skilled recruiter — much like job quit rates — is higher than ever before. The job market's uncertainty creates a unique opportunity for individuals looking to start their careers in talent acquisition. Indeed, a recent CNBC report noted that recruiters were one of the most highly sought-after entry-level roles last year and that staffing and recruiting was the fastest-growing industry for entry-level talent.
However, if you are new to the field, making that initial step can be daunting. Consider this article to be your Recruiting as a Career course, in which, we'll take a closer look at one of the fundamental decisions every prospective recruiter faces — whether to pursue a career as an in-house recruiter or to join a recruiting agency. Which setting will you enjoy the most? Would one provide compensation and rewards that better motivate you and help you reach your goals? Read on to explore your options.
Understanding in-house and agency recruitment
Simply put, an in-house recruiter works as a part of an organization's own internal human resources or talent acquisition team to identify, interview and hire candidates. The candidates they hire become their colleagues. An in-house recruiter also meets often with their company's department heads to understand hiring needs, define job descriptions, establish required qualifications, benchmark salaries and develop hiring plans — among other responsibilities. Compensation-wise, an in-house recruiter typically earns a flat salary, without commission.
Agency recruitment, on the other hand, refers to a talent acquisition professional employed by a professional staffing agency. The agency works with their client businesses to determine those organizations' hiring needs, with the recruiter then responsible for identifying the best candidates for those roles and submitting them for hiring consideration. If the client business ultimately hires a candidate that the agency recruiter identified, that recruiter will typically receive a commission. However, the types of professional agencies — and the methods they employ — vary rather widely.
Broadly speaking, there are four basic types of professional agency recruitment. However, it's important to keep in mind that an agency may utilize any number of the following methods:
- Temporary Staffing and Staff Augmentation: Temporary staffing, also known as temp staffing or staff augmentation, typically refers to hiring workers on a seasonal, project-based or otherwise temporary basis. These hires — who are contractors employed by the professional agency — will work for the client business until the end of their assignment. In some cases, the temporary workers will work on a temp-to-hire basis, meaning they are initially brought on as temporary employees through the agency, but could potentially be hired permanently by the client. It's not uncommon for an agency recruiter specializing in temporary staffing to work with candidates who are placed at multiple client businesses throughout their relationship with the recruiter's agency.
- Direct Hire/Permanent Placement: Direct hire and permanent placement is a type of agency recruitment whereby a recruiter identifies potential candidates for their client organization's roles, who are then hired directly by the client. In this case, typically the client will pay a retainer fee — an initial, upfront fee — or a contingency fee — a fee paid to the agency after the candidate is hired — to retain the services of the agency.
- Executive Search: Executive search is a specialized form of direct hire and permanent placement. It carries the same outcome: Ultimately, the candidate identified by the recruiter is brought on directly by the client business. However, what makes executive search unique is the process involved. Distinguished by the types of candidates identified in the search — C-suite, as well as influential leadership positions — executive search takes much longer than a standard direct hire search process, with the agency and client meeting often to discuss needs, present candidates and even discuss finer details, such as compensation benchmarking. An executive search process also generally involves a high level of discretion — a company hiring a new CEO, for example, wouldn't necessarily want to make that search known publicly.
- Recruitment Process Outsourcing (RPO): Ordinarily speaking, RPO describes when an organization works with a client business to partially or wholly manage its talent acquisition function. This occurs when the client's Human Resources team can't manage all hiring needs, or when an organization grows to the point where it can't effectively manage all parts of its workforce — including its contractors, freelancers and other non-employee headcounts. A recruiter who works for an RPO will essentially act as an in-house recruiter for one of the agency's clients but will also be responsible for providing reporting and transparency to the client organization surrounding how the RPO is performing.
The advantages and disadvantages of in-house and agency recruitment
The pros and cons of in-house recruitment
- An in-house recruiter will be able to form deep, meaningful relationships with the hiring managers they work with because they will interact with those same managers day in and day out — as well as be able to see the tangible outcomes of those they hire.
- In-house recruiters typically have a clearer line of communication with hiring managers than agency recruiters — as a fellow colleague, department heads are much more likely to pick up your phone call.
- An in-house recruiter may also be better positioned to deliver successful candidates. This is because as an actual employee of the company, an in-house recruiter is more likely to be privy to certain intimate or less tangible details of what a hiring manager is looking for that an outside agency would not be aware of.
- As this recruiter and LinkedIn member, who has had experience in both recruitment methods, hilariously points out: An in-house recruiter isn't responsible for business development (finding new clients), whereas agency recruiters are, depending on the structure of the agency.
- Unless they are part of a large enterprise, in-house recruiters are expected to be able to recruit for all positions within the organization. This leaves very little room for specialization in certain areas.
- In-house recruiters may struggle to have the proper resources to recruit. Because an agency's whole business rests on its ability to deliver top-quality candidates, it's more likely to have access to powerful, best-in-class resources to give recruiters the tools they need to be successful.
- In-house recruitment doesn't typically involve commission, so there's no extra earning potential beyond a recruiter's base salary.
The pros and cons of agency recruitment
- Agency recruiters work with a wide variety of clients across industries. Getting exposure to these different industries means that agency recruiters have a more comprehensive view of the hiring landscape and also get exposure to a variety of unique hiring challenges.
- Agency recruiters have a high earning potential due to the ability to earn commissions.
- Depending on the firm, agency recruiters may also work with a wide spectrum of candidates — contractors, consultants, direct hire candidates and others. Exposure to different types of employment can make it easier to navigate difficult hiring situations, such as determining the best assignment type and duration or benefits eligibility for temporary workers. All this is pivotal to developing a well-rounded recruiting skillset.
- While agency recruitment can sometimes be transactional in nature, the right firms will give recruiters the ability to work with excellent candidates time and again, helping them take the next steps in their careers. From a professional coaching perspective, an agency recruiter has more tools to help candidates craft their career path because they're working with and have access to many different employers.
- Without an established relationship, agency recruitment typically requires a bit more effort from recruiters to get the hiring manager of a client to buy into them.
- Agency recruitment, particularly temporary staffing, is oftentimes fast-paced and can be highly demanding. It's not a typical 9 to 5.
- Agency recruitment can be highly metrics-driven: A prospective recruiter should be sure to ask what key performance indicators (KPIs) an agency will track, so they are prepared for how their performance will be measured.
There are advantages and disadvantages to both in-house and agency recruitment. For professionals interested in a career as a recruiter, it may be best to pursue job opportunities with both types of organizations, and see how their differing dynamics may suit you.
Why consider a career in recruiting?
In addition to understanding the types of recruitment and the relative merits of each approach, recognizing the benefits of a career in recruiting can help you determine if this is a suitable profession for you. The main advantages recruiters enjoy include:
- Continuous opportunities for upskilling and career development.
- The chance to improve the lives of qualified candidates.
- A high earning potential, if the position is commission-based.
- Variety and diverse tasks.
- Frequent networking opportunities.
- Job security due to enduring recruitment needs.
- Entrepreneurial opportunities as you improve management and communication skills.
Overall, you can expect a career as a recruiter to be fast-paced and dynamic, and for entry-level professionals ready to pursue the profession, it's important to make your entrance with the right company — and Beacon Hill can help.
Explore your paths to success with Beacon Hill
Our entry-level possibilities give talented individuals the chance to immerse themselves in the industry and gain a wide network of supportive team members. At Beacon Hill, we offer:
- Limitless opportunities to grow.
- Comprehensive benefits.
- An inclusive community.
- An empowering workplace culture.
If you're ready for endless opportunities for growth and professional development, explore the possibilities of a career with Beacon Hill today.