What Is the Difference Between Using a Recruitment Agency and Recruiting Yourself?

Today, let’s try to answer a question asked by many an employer, “What’s the difference between using a recruitment agency and recruiting yourself?”

The short answer is that there are quite a few differences.

The long answer is this blog post. 😂

The right recruitment methods and strategies can be hard to find.

But once you’ve found them, your company will be perfectly poised to attract top talent.

In this blog, I’ll use AdBuilder’s latest research to break down the two main forms of recruitment.

I’ll then explain how recruitment agencies can help streamline and simplify the external hiring process.

Understanding Your Options: External versus Internal
- What Is External Recruitment?
- What Is Internal Recruitment?
- The Advantages and Disadvantages of Internal Recruitment
External Hiring and The Role of a Recruitment Agency 👩‍💻
- What Is a Recruitment Agency?
- How Do Recruitment Agencies Work?
The 5 Key Differences Between Making an External Hire Alone and Making an External Hire with Agency Support
Your Recruitment Method Is Only Half of the Hiring Battle 🛡🗡

Understanding Your Options: External versus Internal

Before we can explore the role and value of the recruitment agency, we need to know that there are two distinct methods of recruitment available to employers.

Method one is known as external recruitment, and method two is known as internal recruitment.

What Is External Recruitment?

External recruitment is when an employer searches for an employee to fill a job role in a candidate pool outside of the existing workforce. 🕵️‍♂️

You might hear this referred to as an external or outside hire.

This type of recruitment usually means that you, or the recruitment agency that you hire to handle this process, will:

Craft an appealing job advert (which we are well-equipped to help with over at AdBuilder)
Advertise the role in digital spaces like your company website/the agency website and job boards
Assess applications and narrow down a group of suitable candidates to interview

This is a common hiring method, but it won’t always be your best option.

What Is Internal Recruitment?

As you might have guessed, internal recruitment is the opposite of external recruitment.

When internal recruitment occurs, an existing employee takes on a new role in the same company, meaning they’re already familiar with the business.

And in many cases, their colleagues.

There are a few different types of internal recruitment:

Promotion – An existing employee moves to a higher position in the company. ⏫
Transfer – An existing employee moves to a different role or department (though not necessarily a higher position) in the company. ⏩
Internal advertisement – A role is advertised to existing employees, applied to, and filled by one of them. 📣
Freelance to full-time – A freelancer working for the company becomes a full-time employee. 🎉
Retired to freelance or part-time – A once-retired employee returns to the company on a freelance or part-time basis. ↩️

There’s also the hybrid method known as an employee referral, in which existing employees make outside recommendations that become hires.

Employee referral is a preferred method among employers, for good reason too.

According to research, 45% of employees sourced from referrals stay longer than four years, while only 25% of employees sourced through job boards stay longer than two years.

The Advantages and Disadvantages of Internal Recruitment

So, which option is best for your company?

It’s time to weigh it up. ⚖️

Remember, as we dive into the pros of both methods, there won’t be a one size fits all answer to this question.

It’s up to you to choose the right option.

Employee referral incorporates both methods and does it flawlessly, after all.

The most successful companies are those that can learn to implement both, using one or the other as the situation dictates.

The Advantages of Internal Recruitment

1. Cost is reduced and hires happen more quickly

According to over half of the talent professionals surveyed by LinkedIn, internal recruiting accelerates the hiring process.

Without the need to onboard and acclimatise a new employee, you’ll be able to save equal parts money and time.

It’s like the difference between making dinner out of the ingredients in your fridge and making dinner from a recipe that requires you to go to the supermarket beforehand.

One is going to take a bit more time. 🥘

2. Employees feel supported and developed, increasing retention rates

A huge 81% of talent professionals from the same LinkedIn survey mentioned above agree that internal recruitment increases employee retention.

When employees feel there is room to grow and thrive within a company, they are far more likely to stick around.

If you’re constantly choosing an external hire for the job rather than looking to your existing workforce, some of your employees might begin to feel underappreciated. 😢

This will lead to lowered morale and a raised rate of employee turnover, which is the opposite of what any employer should want.

3. Time doesn’t have to be spent advertising roles and selling your company brand

In the same way that the speed of the hire will save your company time, so will the hours you don’t need to spend advertising the role widely and promoting your company brand. 🚫📩

For jobseekers that don’t know your company, your brand is a big deal, and a motivating factor as to whether they make an application.

For employees that already know your culture and your ethos well, this doesn’t need to be as much of a consideration.

4. The workforce isn’t disrupted

Generally speaking, internal recruitment causes less disruption to the workforce.

When an employee is offered an internal promotion, they’re often already known.

So, you can skip past the new introductions.

With known quantities in play, team dynamics can settle much more quickly, and disruption to workflow and working culture can be minimised. 📊

On the flip side, here are four reasons to hire from outside of your company:

The Advantages of External Recruitment

1. New, innovative ideas enter the company

If you want to actively promote a flexible and innovative working culture, you shouldn’t restrict yourself to your existing ranks.

External hires are one of the best ways for new and exciting ideas to enter the workforce.

Ideas that you didn’t know you were missing until you did. 🤯

On average, inclusive companies are almost twice as innovative.

2. The workplace becomes more diverse

Speaking of inclusivity, companies with diverse management teams enjoy a 19% revenue boost over their less diverse counterparts.

When you hire externally, you build a more diverse workforce. 🏳️‍🌈

Especially if you’re looking into diverse job boards and ways to actively promote diversity during your recruitment process.

Making your employees feel comfortable at work and promoting talent regardless of background leads to employees working harder and getting more done, boosting the overall performance of your company.

It’s a win for everyone.

3. Gaps in the existing workforce are filled (particularly true for very specialist roles)

Sometimes, as talented as your existing employees are, you’re going to be looking for a specialist skill that none of them possesses.

In this case, external recruitment is the only way to go.

The only way to fill those gaps which need filling so your company can keep performing well.

You can target a very specific pool of talent with external recruitment, taking your time and ensuring that the person you hire is perfect for the job. 👌

4. Younger talent gets a look in

If you’re always promoting within your organisation, what happens to the people who haven’t been able to enter the workforce yet?

By 2025, Millennials are predicted to make up 75% of the workforce, and behind this generation is Generation Z, currently beginning to enter the world of work.

If you want to give younger talent a chance to grow, develop and blossom in your company, you can’t stick to internal recruitment only.

You have to branch out. 🌱🌿

External Hiring and The Role of a Recruitment Agency 👩‍💻

When you’re hiring externally, you’ve got two choices:

✅ Advertise your jobs yourself

✅ Turn to a recruitment agency for support advertising your jobs

Option two will cost you and see you sacrificing some control over your brand voice. However, it will simultaneously allow you to attract a wider range of talented and qualified candidates.

It’s a trade-off, and you’ll need to figure out whether it’s one your company should make.

What Is a Recruitment Agency?

A recruitment agency is a company that acts as the link between jobseekers and employers, connecting qualified candidates to suitable roles.

Some agencies work across the board in every sector.

Others have specialisms, like Temps4Care.

Temps4Care operates exclusively in the care sector, filling roles in areas including elderly care, palliative care, mental health care and disability support.

Whatever the type of work they focus on, the purpose of recruitment agencies is clear.

These businesses aim to bridge the distance between talented people looking for jobs and quality employers looking for employees.

How Do Recruitment Agencies Work?

The help of a recruitment agency can be a great investment for your company.

Here’s how the process will go and what the agency will do for you, from the moment that you reach out:

1. You’ll contact the agency about advertising a role/multiple roles.
2. They’ll either look at their existing candidate database to find suitable applicants or advertise the role/roles online to source suitable applicants.
3. Applications will be secured, and the agency will pull together a pool of ideal applicants.
4. This pool of applicants will be shared with you, and you’ll be able to give your approval/voice any issues.
5. The agency will help you arrange interviews with the candidates of your choosing and conduct initial screening interviews.

Sounds simple, right?

That’s because recruitment agencies make it simple. 🤷‍♀️

The research and hard work behind the scenes won’t impact you, but it will save you time and money in the long run while connecting you to a lot of talented jobseekers.

These five key differences are the most important consideration when you’re trying to determine whether it’s worth enlisting the help of an agency …

The 5 Key Differences Between Making an External Hire Alone and Making an External Hire with Agency Support

When you enlist the help of a recruitment agency, you’ll see the following five differences in action, changing the way your hiring process happens:

1. A Wider Talent Pool

Recruitment agencies source candidates en masse in several ways.

These ways range from advertising on job boards to targeting passive jobseekers on sites like LinkedIn and building a talent pipeline by allowing candidates to register directly with them.

Plus, since agencies are advertising and hiring so often, they’ll tend to have strong existing relationships with companies like Indeed and LinkedIn.

Relationships that allow them to advertise, list and promote your jobs at preferable, discounted rates.

2. Expectations Set Early On

When an agency is a middleman between your company and your potential employee, you avoid any potential for uncomfortable negotiations in the onboarding phase.

Recruiters with a strong knowledge of the industry and of common salaries for the role you’d like to advertise will help you to benchmark the salary you’re offering against the industry standard.

They’ll then present this information to candidates so that all the essential facts are out in the open and all parties know exactly what to expect.

3. Reduced Time and Effort

If hiring to fill one role can take a fair amount of time, you can imagine how many of your working hours you’d need to fill multiple without the help of an agency.

Plus, 67% of large firms report challenges filling positions compared to 32% of micro-companies (companies with less than ten employees) [Go Remotely]. The harder the hire, the longer it takes.

If you can’t commit all that time to the hiring process while still meeting all your other responsibilities, you’ll find that a recruitment agency can help you to free up your working day again.

4. More Advertising Expertise and Market Knowledge

If you’re a small business selling artisanal coffees, you know that these coffees are your area of expertise.

They’re the thing you know a great deal about and can confidently sell to customers.

For recruiters, jobs are artisanal coffees. They’re in the business of advertising jobs and securing candidates, and they know the market inside out.

This means that when you enlist their help, you gain access to all this expertise.

This is particularly true of agencies that work within a specific niche, as their knowledge in this sector will be even more developed, and nobody will be better placed to help your company find ideal employees.

5. Money Saved in the Long Term

Although help from a recruitment agency will cost you in the short term, it’s likely to save you money in the long term. When qualified candidates come to you:

You don’t have to pay to employ a hiring manager
You won’t need to heavily train underqualified employees when they enter the workforce
You won’t have to waste valuable hours of productivity worrying about recruitment

They’re not lying when they say time is money.

Your Recruitment Method Is Only Half of the Hiring Battle 🛡🗡

Don’t forget that there’s more to the battle than the method of recruitment you’re using.

If you’re doing any external recruitment at all, you’ll be up against plenty of competition.

Did you know, for instance, that one in four employees are planning to look for a new job post-pandemic?

In such a busy hiring market, you’ll need to do everything you can to stand out. 🗯❗️

(Particularly if you don’t have the expertise of an agency on your side.)

To do this, we recommend investing in every aspect of your job advert to create something quality, consistent and memorable.

Something that puts the focus on the candidate and enhances their experience.

AdGrader can remove any biased or exclusionary language from your ads, while AdBuilder allows you to shape and build them in half the time.

Isn’t that worth it?

(That’s you plus us.)

I’m confident that regardless of your company’s size and situation, our job advert building platform can help you to improve your hiring practices.

Enjoy reading what the difference between using a recruitment agency and recruiting yourself is?

Then keep up the recruitment research on our blog.

Here are a few blogs I think you’ll find super useful:

Written by James Ball

James is the founder and owner of AdBuilder and a recruitment expert from Sutton Coldfield in the UK. He regularly advises companies on how to improve and get the maximum ROI from their recruitment processes and advertising.