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Recruit inhouse or outsource?


Lately, you’ve been wondering about whether your talent team is really effective. Are they doing a better job than if you did it yourself?

You’re a founder, CEO, COO, or VP. You want to hire faster. You want to hire only the best. You want your organization to be fast and free of bureaucracy. You hired a talent acquisition (TA) team to solve this. But it seems like they’re not getting enough great people in the door.

You think something along the lines of — these talent people are all the same. It always seems like they’re always doing data entry and unnecessary gatekeeping, we end up just paying external headhunters an arm and a leg anyway.

Before you replace your talent team without solving the problem, ask yourself what you can do to make them successful. Think about how you do this for sales and marketing.

  1. If you hired a team with the same headcount and budget as your recruiting group, and made them responsible for literally all sales, marketing and business development activity in your organization, how many deals do you realistically think they would close?
  2. How much would you pay to help that sales, marketing, and biz dev team to reach their goals?
  3. Would you pay a 25–30% affiliate referral fee for a customer referral?
  4. Would you ever pay a higher affiliate referral commission than your in-house sales commissions?

Today, the hiring funnel looks very much like the sales funnel. Talent acquisition teams have to 

  1. Brand your company as a cool place to work
  2. Work on inbound recruiting through word of mouth, communities, referrals, and creating a good candidate experience
  3. Do cold outreach and partnerships to build a talent pipeline
  4. Shepherd both candidates and interviewers through the process
  5. Work on closing offers made to top candidates

Normally, sales and marketing teams use multiple tools for ^^. 

But recruiters get to buy only 1 tool, a system of record, the Applicant Tracking System (ATS), which is actually the tool that is good for running process and analysis, but has little to do with demand generation or closing. They don’t get any marketing tools. Their commissions are lower than affiliate (headhunter) commissions. Your employee referral program is only a fraction of that, and recruiters doesn’t even get to control the budget for the referral program — that often comes from individual departments. That’s like telling marketing that their budget comes from the iOS engineering team.

Five things you should try before pulling the plug on your talent team.

1.Consolidate budgets: If the referral budgets are controlled by Engineering, headhunter budgets by the CFO, and event sponsorships by VP of Marketing, it’s going to be a nightmare for your talent team to do their job. No wonder they seem slow, it’s your organization that’s holding them back.

2. Benchmark ROI: By consolidating budgets, you can give much clearer, ROI (return on investment) based goals to your talent team. If the money all comes from the same place — whether it’s tools, bonuses, commissions, sponsorships, whatever, it’s much easier for you to calculate ROI (return on investment) and hold your talent team accountable to it.

At the end of the day, the company succeeds when you hire more amazing people for less money than the competition.  

3. Ask for a feasibility report: To make sure your talent team isn’t facing an impossible task in the first place, ask them to give you an estimate of how feasible your company goals are with the resources you have available. For example, consider the case of Tom. Don’t be disappointed if you blow $100K on a Tesla and then find out it doesn’t work underwater.

4. Invest in training: Many sales organizations don’t let their reps pick up the phone before going through a comprehensive training program. Did you train your talent team on technologies used by your software engineers? Did you train them on how to treat candidates? Did you help them get better at cold outreach? 

5. Give freedom to experiment: Many talent teams are terrified to experiment because they’re on a short leash. By no means should you let anyone run amok with your credit card, but give talent teams the freedom to try different strategies. For instance, they shouldn’t be afraid to

  • See if it makes sense to pay headhunters per interview instead of per hire
  • Pitch the company’s new perks plan to local press
  • Try an external referral program to complement the employee one
  • Spend the day at a friendly company to learn their best practices. 
  • Try new tools that speed up hiring for the company

The executive team’s responsibility to ensure employee success doesn’t apply to just sales, marketing, and product. It applies to recruiting, too.

Adaptation of an article by originally published on Recruiting Daily

About the author – Vinayak is the founder and CEO at Drafted, which makes hiring tools for talent teams.

Posted on February 6, 2017

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