Pros and Cons of Using Recruitment Agencies

Discover the pros and cons of using a recruitment agency! Using a recruitment agency to help you find and hire the right candidates can be the best – or the worst thing for your company. To make a sensible decision, you should carefully consider both advantages and disadvantages of using a recruitment agency.

In-house recruiting vs using recruitment agencies

These days, finding great candidates is hard. Really hard. With the unemployment rate lower than ever, it’s a candidate-driven market out there. In a situation like this, your best job candidates are passive job seekers – they don’t actively look for a job, because they already have one. This means that posting your open job position on job boards is by no means enough to attract the best candidates.

You need to formulate a great employee value proposition , craft a job post that will stand out, promote it on various social media and build a perfect career site – all that just to attract candidates and convince them to apply to your open job positions. Once you finally receive applications, you need to spend hours and hours to go through them and find qualified candidates. Doing all that takes time. It is a lot of (hard) work!

If you don’t have a dedicated in-house recruiter, other members of your team will have to suffer under the additional recruiting workload. Even if you have a dedicated in-house recruiter, you might not be able to find and reach the type of candidate you need.

If you’re in a similar situation, you’re probably considering using the services of a recruitment agency.

Recruitment agencies can help you find and shortlist high-quality candidates. However, using a recruitment agency has both advantages and disadvantages. Read on to discover all the pros and cons of using a recruitment agency!

The pros of using recruitment agencies

There are 3 main advantages of using a recruitment agency:

1. Faster hiring
2. Higher quality candidates
3. Specialist knowledge.

Advantage #1: Faster hiring

Using a recruitment agency will shorten the time needed to fill your open job positions. You won’t have to spend time attracting candidates and going through tons of profiles and applications to find a few qualified ones. A recruitment agency will do all that and deliver only a few top candidates for your consideration.

Also, a recruitment agency can usually find candidates much faster than you can. This is because recruitment agencies already have a vast talent network. When using a recruitment agency, you can tap into its large talent pool of already vetted candidates. This will significantly shorten your time to hire!

Advantage #2: Higher quality candidates

Using a recruitment agency will improve the quality of candidates in your recruitment process. As we already mentioned, recruitment agencies have a large talent pool with already pre-screened and pre-referenced candidates. It means that you will only deal with candidates who are carefully assessed and vetted.

Besides, recruitment agencies are experts in candidate selection. Agency recruiters are professionally trained to assess candidates. They use best-practice methods to differentiate real experts from good interviewees. They also have a vast experience you can benefit from.

Advantage #3: Specialist knowledge

Using a recruitment agency will allow you to tap into a specialist knowledge your in-house recruiters might not possess. An in-house recruiter usually has to cover a wide range of different roles a company needs.

On the other hand, most recruitment agencies are specialized in recruiting for a certain industry, role or level. It means that they have better knowledge and a deeper understanding of their targeted job market segments. As a result, recruitment agencies can provide you with valuable insight and useful advice that can help you find and hire better candidates.

Now that we’ve examined the key pros of using a recruitment agency, let’s turn to the cons.

The cons of using recruitment agencies

Of course, using a recruitment agency has some downsides, too.

There are 3 main disadvantages of using a recruitment agency:

1. Higher cost
2. No cultural fit assessment
3. Lack of employer branding.

Disadvantage #1: Higher cost

Using a recruitment agency can be quite expensive endeavor. In general, recruitment agencies’ fees are around 20 to 30% of the employee’s annual salary. The cost of using a recruitment agency can get even higher if you’re looking to make a hire for a hard to fill role. Either way, when using a recruitment agency, you will have to pay a fixed fee every time you want to make a hire.

On the other hand, if you’re handling your recruitment process in-house, you can experiment and test your recruitment methods and channels. That way, you can stop wasting money on recruitment methods and channels which don’t work for you and invest it into those that yield the highest return on investment. You can also invest your money in building your talent pool for your future hiring needs, thus saving money in the long run.

Disadvantage #2: No cultural fit

Recruitment agencies can’t ensure the cultural fit of their suggested candidates. Recruitment agencies can deliver the candidates that are the best fit for a certain position and role. However, they are much weaker at assessing a cultural fit.

In other words, recruitment agencies can help you choose the best candidate for your open position, but not for your company culture and your team. Best recruitment agencies will go out of their way to become familiar with your company goals, mission, vision and values. However, agency recruiters will never have the same understanding and experience of your company culture as your employees who live and breathe in it every day.

Disadvantage #3: Lack of employer branding

If you use recruitment agencies, you miss an opportunity to build your company’s employer branding strategy – and own it. Every step of the recruiting process is an opportunity to formulate, present and promote your reputation as an employer of choice.

However, if you put your recruiting efforts in the hands of a recruitment agency, you won’t have full control of your employer brand. Someone else will be presenting and selling your employer brand to your potential candidates. Your potential candidates will create their first impressio n of your company based on secondhand information – not direct contact with your company.

Conclusion: Should you use a recruitment agency or recruit by yourself?

Should you use a recruitment agency to help you find and shortlist the best candidates? Or should you handle the full cycle recruiting process by yourself?

Which option is better: In-house or agency recruitment?

When compared with in-house recruiting, using a recruitment agency has both advantages and disadvantages:

In short:

✔️ A recruitment agency can help you find high-quality candidates and fill your open positions faster.

❌ However, using a recruitment agency can be expensive. Additionally, a recruitment agency can’t understand your company culture in a way your employees would. This means recruitment agencies can help you find the best people for the job, but they can’t ensure that the selected candidates are a truly great fit for your company culture and your team.

➡️ To make the right decision and choose the best recruitment model, you need to carefully consider your hiring needs and resources:

• Do you have the in-house expertise to handle your hiring needs? Could you benefit from developing it?
• Do you want to invest in long-term recruiting strategies or you just need a quick fix?

Answering these questions will help you make your final decision about using a recruitment agency.

If you decide to go for it, make sure to check out the Ultimate guide for choosing a recruitment agency .

If you decide to do your recruiting in-house, our Ultimate guide for finding qualified candidates will help!

Frequently asked questions

What Are the Main Advantages of Using Recruitment Agencies?

The main advantages of using recruitment agencies include faster hiring, access to higher quality candidates, and specialist knowledge. Agencies can quickly fill open job positions by tapping into their vast talent network of pre-screened and pre-referenced candidates. They also bring specialized knowledge of certain industries, roles, or levels, which can be beneficial in finding the right candidates.

How Do Recruitment Agencies Speed Up the Hiring Process?

Recruitment agencies speed up the hiring process by utilizing their extensive network of vetted candidates. This means they can quickly present a selection of top candidates for consideration, significantly shortening the time to hire. Agencies eliminate the need for companies to spend time attracting and vetting candidates themselves.

Can Recruitment Agencies Ensure a Cultural Fit With the Company?

One of the disadvantages of using recruitment agencies is their limited ability to ensure a cultural fit. While they can find candidates who are technically suitable for a position, assessing whether a candidate will mesh well with a company’s culture and team is more challenging. This aspect often requires a deeper insight into the company, which agencies may not fully possess.

What Are the Financial Implications of Using Recruitment Agencies?

Using recruitment agencies can be a more expensive option, with fees typically ranging from 20 to 30% of the hired employee’s annual salary. This cost can increase for hard-to-fill roles. In contrast, handling recruitment in-house allows companies to experiment with different methods and channels, potentially saving money in the long run.

How Does Using a Recruitment Agency Impact Employer Branding?

When companies use recruitment agencies, they miss the opportunity to build and control their own employer branding. The recruitment process is a chance to present and promote a company as an attractive employer. However, with an agency, the employer brand is communicated secondhand, potentially leading to a less authentic portrayal to potential candidates.