Should you hire a Recruiter or DIY your hiring?

Should You Hire a Recruiter or DIY Your Hiring?

Are you a small business owner or leader grappling with the tough decision of whether to hire a Recruiter or handle recruitment in-house? You're not alone! According to a study by ManpowerGroup, a staggering 90% of hiring managers are struggling to find qualified candidates for their open roles. This talent shortage is one of the biggest hurdles in today’s competitive hiring landscape. Whether you're battling to fill critical positions or looking to supercharge your current hiring strategy, this guide will dive deep into the pros and cons of both options – arming you with the insights you need to make the smartest choice for your financial planning firm.

Here's what we'll cover:

• Questions to consider whether partnering with a Recruiter is right for you

• A cost analysis between DIY Recruiting vs. Recruiter costs

• Comparing the long-term financial impact of both choices

4 Questions to consider:

Most startups and small businesses lack dedicated internal Recruiters. While not always essential, a Recruiter can be invaluable, especially when every hire significantly impacts a small team. Given that many small business owners spend a large portion of their time on income-generating tasks, outsourcing recruitment can free up valuable time. In today's competitive job market, attracting top talent is crucial.

1. Do you have the time to spend on recruiting?

Did you know the average time to hire a new employee is 42 days? This extended time-to-hire can result in lost productivity and increased costs, particularly for high-impact roles. Recruiters streamline the hiring process, freeing up your time to do what you do best – make money. They efficiently screen candidates and expedite the process, reducing the costs associated with prolonged job postings.

2. Do you have an expanded network of talent readily available?

According to LinkedIn’s Global Talent Trends, 73% of job seekers are passive candidates, meaning they are not actively looking for a job but are open to new opportunities if the right offer comes along. Engaging passive candidates requires a different approach than recruiting active job seekers. Recruiters have extensive networks and expertise in identifying both active and passive job seekers. They use strategies for finding talent that can’t be found through the traditional means of simply posting a job.

3. Do you have job market expertise?

A report by Glassdoor revealed that 52% of companies struggle to secure top candidates before their competitors do. In today’s fast-moving job market, candidates often have multiple offers on the table, making it crucial for companies to act quickly. Recruiters possess valuable market insights, including salary benchmarks, industry trends, and a deep understanding of what makes a good fit for your individual company’s culture.

4. Do you know how to boost retention and morale through the hiring process to reduce turnover?

A CareerBuilder study found that 50% of job seekers have turned down a job offer because of a poor candidate experience. From long application processes to lack of communication, a negative experience can significantly impact a company’s ability to secure top talent. Recruiters understand the importance of a positive hiring experience. Their communication skills and attention to detail contribute to higher employee retention rates and improved team morale. It is estimated that losing an employee can cost a company one-half to two times the employee’s salary so getting it right from the beginning is crucial!

Cost Analysis: DIY Hiring vs. Recruiter

Hiring involves costs beyond salary, including recruitment expenses, training, and benefits.

Costs of DIY Hiring

Recruitment Costs: Posting job ads, marketing roles, and using recruitment tools can quickly add up. Job boards like Indeed, LinkedIn, and ZipRecruiter are expensive, and larger companies may need a dedicated Internal Recruiter, adding salary and benefits costs. Recruiting firms offer the advantage of handling this process for you.

Technology and Tools: Recruitment tools like Applicant Tracking Systems (ATSs), AI platforms, and automation software are crucial but costly, often ranging from $10,000 to $80,000 per year.

Time Investment: HR and hiring managers spend significant time screening resumes, conducting interviews, and negotiating offers. For one job posting, the time spent on early stages includes 23 minutes for applications, 1.5 hours for phone screenings, 7.5 hours for interviews, and 3 hours for in-person meetings.

Turnover Risks: If a hire doesn’t work out, rehiring costs add up.

Cost-Effective Hiring with a Qualified Recruiter

Pre-Vetted Candidates: Qualified Recruiters provide pre-vetted candidates, saving you time and money on screening. This reduces recruitment costs and minimizes the risk of bad hires without needing costly marketing or tools.

Faster Hiring Process: With established pipelines, Recruiters fill roles quickly, reducing vacancy costs and productivity loss.

Reduced Hiring Risks: Recruiters handle screenings and offer replacement guarantees, cutting turnover risks and the costs of poor hires.

Expert Recruitment Marketing: Recruiters manage recruitment marketing with advanced tools, ensuring your job openings reach the right candidates faster, saving both time and money.

Outsourcing hiring to Recruiters saves you resources, reduces risks, and fills positions more efficiently in the long run.

Comparing the Long-Term Financial Impact

Salary Expectations & Negotiation: Recruiters use market data to negotiate competitive, budget-friendly salaries, helping businesses hire quality candidates without overpaying.

Hidden Costs of Internal Hiring: Internal hiring may seem cheaper, but hidden costs like HR overhead and bad hires (which can cost up to 30% of their salary) add up. Recruiters reduce these risks by thoroughly vetting candidates.

ROI of using Recruiters: Recruiters deliver better ROI by placing well-suited candidates, improving retention and reducing turnover, leading to long-term savings and lower cost-per-hire.

How to Choose the Right Hiring Strategy

The right hiring strategy can make or break your recruitment success. Consider factors like the roles you're hiring for, company resources, and long-term goals:

• Internal hiring is ideal for promotions and succession planning.

• Direct hire staffing works best for quick hires and hard-to-fill positions.

If you’re interested in learning more about how to partner with a Recruiter who specializes in the financial advisory services industry, contact us for a free consultation call!