Four disadvantages of third-party recruiters

When filling a vacancy, it is imperative that hiring managers and HR make the best choice in terms of impact on the business and the rest of the workforce.

The wrong new hire can negatively affect everything, from the integrity of the work to employee relations. Companies often turn to third-party recruitment agencies to assist with the hiring process.

Combined with a strong referrals program and modern HR technology, these agencies can provide incredibly efficient services. That said, HRMS recruitment functionality means that it’s very possible for an organization to handle recruitment in-house. Let’s take a look at some of the common drawbacks of working with a third-party agency, when you should use an agency, and what a modern HRMS has to offer in relation to your recruitment needs.

1. The cost of recruiting

Working with third-party recruiters requires a fee for their services. If you use an agency to hire an employee you are paying a percentage or mark-up on the employee’s salary to covers the agency’s administrative costs, taxes, and profit, of course.

These costs can be negotiable but are unavoidable. Before utilizing third-party recruiters, consider your budget and assess ROI potential.

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2. Lack of control

An issue for many HR or hiring managers is giving up control over the recruitment process. If you need to read every resume for every candidate yourself, then the recruitment agency route is probably not for you.

Common practice is for third-party recruiters to consolidate the most qualified candidates for you to review. This not only requires faith in the agency and its processes, it can be frustrating to feel ‘out of the loop’ if you’re used to being hands-on at all stages.

3. Indirect candidate access

Apart from having to be more hands-off with the process, another frustration can be the lack of access to the candidates, outside of interviews or assessments that you are involved in. This can mean your new hire is still practically a stranger on their first day. They may well be the best candidate for the job (hopefully, otherwise why use an agency?!) but lack of contact during the hiring process can mean a longer onboarding.

4. Communication issues

Probably the biggest disadvantage of working with third-party recruiters is the potential for miscommunication. In a survey by HR Dive, “More than a quarter of the businesses polled said lack of feedback was their top problem, whether they were looking for talent or looking to get hired. Businesses cited other problems with recruitment agencies as receiving no responses at all, poor communication, or either too much or too little communication.”

Each of the previous three points can arise or be exacerbated by a mismatch of communication approaches.

How can an HRMS help?

HRMS recruitment modules offer a wide variety of supporting functionality, including process management, applicant tracking, resume management, candidate and employee management, legislative compliance, and data analytics. A good HRMS that fits your needs can be like a recruitment agency-in-a-box. Some of the key benefits are:

• Customization – HRMS processes can be tweaked and adjusted to fit your specific organizational needs. Factors such as position vacant, organization size, and budget can all affect the specific recruitment process. The right HRMS will adapt to your process and then automate it. Speaking of which…
• Automation – Once set up, your HRMS’s automated recruitment process will guide you through drawing up a job description and advertisement, post it on your careers page and your choice of online jobs boards, receive and parse applications and resumes… and so on.
• Social media – You can link your HRMS to social media as part of the online talent pool and pipeline. Social media platforms can be incorporated into your advertising and application processes.
• Analytics – An HRMS can take advantage of your recruitment data, gathered over a number of campaigns, to predict your future recruitment needs and hone the recruitment process itself.

When should you use third-party recruiters?

None of the above is to deny recruitment agencies a place in the world – when matched to your specific hiring needs, they can play an effective and useful role. For example:

• When you’re mass hiring – If you’re expanding your operations, diversifying into a new area, or your employee turnover has spiked, you may find yourself with a need to recruit in bulk. Of course, the automation offered by an HRMS would also help here but this may be a project you choose to outsource to an agency, saving yourself time and resources.
• You lack the necessary resources – Maybe you just don’t have the time or lack the recruitment expertise, and you don’t have an HRMS. The potential advantage of an agency is that they have the systems set up, they have the networks, they have their own talent pipelines.
• Specialist roles – You may be comfortable recruiting for ‘regular’ roles but if you need to hire specialists (e.g. you want to set up a small in-house software development team as part of your organization’s digital transformation) then you may benefit from specialist help.

Working with a third-party recruitment agency may or may not be the right solution for your organization. It depends on what positions you’re hiring for, how many, how much control you want over the process, your budget, and so on. The good news is that you have options. A modern HRMS offers a resource-friendly way to handle your hiring campaigns in-house. This is not to say recruitment agencies are unnecessary, only that you don’t have to rely on them if you don’t want to.