How to Know When It's Time to Outsource Recruiting and Staffing

TSP • @myTSPnet


One of the biggest struggles that small to medium-sized businesses face is overworked and thinly spread human resources departments. Although it may seem as though your HR department is doing just fine, your business could likely benefit from outsourcing staffing and recruiting. Outsourcing allows the department to focus solely on internal duties, such as compliance, legal issues, payroll and more.

Outsourcing your staffing and recruiting doesn’t constitute a failure on the part of your business, rather that you have recognized a way for swift and meticulous improvement in hiring practices, which helps reduce employee turnover and saves your business money. Here are some indicators as to when you should start outsourcing recruiting and staffing.

Although it may seem like the simplest of the HR department’s duties, hiring new employees can be time consuming, and can sometimes lead to the wrong candidate being chosen for the position. The recruiting portion alone takes a significant amount of time. Managers must write job descriptions that are complete with candidate qualifications and requirements. They must then post the job opening on recruiting websites and the company page. Finally, they read resumes, cover letters, and schedule and execute interviews — which takes a lot of time — especially when overqualified candidates are applying.

Hiring an employee that is the right fit for your business is imperative to minimizing employee turnover. This not only creates more work for your HR department, but it also disrupts company culture and fluidity. Outsourcing recruiting can help prevent this issue because the sole purpose of the hiring firm is hiring the best candidate that will maximize the productivity of your business.

Posting on platforms such as LinkedIn, ZipRecruiter or Indeed doesn’t always bring in the best candidate for the job, which may be why you’re failing to fill that pesky opening. Thousands of applicants sift through websites like those each day, and many apply to positions just for the sake of submitting an application and are usually underqualified. They also may not be the right cultural fit for your business, something that is especially important in SMBs.

Staffing agencies can assist your business through this struggle by targeting and organizing applicants based on what would be the best fit for you. In addition to ensuring that candidates meet the basic requirements and qualifications, these agencies can ensure that the candidate will assimilate well into your culture and environment. This not only helps morale among employees, it again helps reduce excessive employee turnover.  

At first it may seem counterintuitive to pay an outside firm to take over your recruiting and staffing but doing so can actually save your business a lot of money in the long run. According to a 2017 report, employee turnover and the new hire process can cost $4,000 or more per employee. This is a huge expense, but one that can easily be fixed. Outsourcing this work to a firm will prevent fund drainage long term, while also reducing employee turnover, thus saving your business thousands.

Agencies typically base their rates off of the hourly wage of the hired employee or the employee’s annual salary. Up front, it may seem like a lot, but in the long term you’re truly getting your money’s worth and will end up reducing the cost of hiring overall. As a small business, your top priority is to maximize the productivity of your time and money.

However, the hiring process certainly makes this more difficult. HR managers often focus more on hiring in a timely manner rather than ensuring that a candidate will be the right fit at an organization, which can be detrimental to retention rates.

Taking the first step toward outsourcing recruiting and staffing may be daunting for a small to medium-sized business. However, if you’re starting to face financial or time constraints in the hiring process, it may be time to take that first step. There are hundreds of firms and it just takes finding the right one that fits best with your business.