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On the Waning Relevance of Third-Party Recruiters

Written by Phil Roebuck | August 14, 2014 | 0 Comments


The Wall Street Journal ran a controversial story on how more and more companies were establishing their own internal recruiting teams in place of hiring third-party recruiters. The article cited Time Warner Inc. as a luminary of the movement; the firm has reportedly saved over $100 million in headhunting fees since it established its own internal recruitment team in 2003. The remarkable statistic was that at least 25% of Fortune 500 companies now have a Head of Executive Recruitment in one form or another – a position distinct from your run-of-the-mill VP of Human Resources.

The WSJ story continued what can only be described as a bilateral awakening in the recruitment industry: companies are realizing that they can do it themselves if given the tools to do so, and third-party recruiters are realizing that, according to Greg Savage, CEO of Firebrand, a Sydney-based shop, they “need to focus on their competitive advantages if they are to survive.” According to Savage, third-party recruiters “need to offer something different.” That includes insights, specialization and access to hard-to-find talent, not just resumes.

Of course, “something different” can be a hard sell when internal recruiters are often former third-party recruiters themselves (i.e. they “know” the game), not to mention they know their company’s culture better than anyone else who may be knocking on their door.

According to a recent article in Human Capital, another key advantage of internal recruiters is “being able to maintain full control over the recruitment process.” Sense of control, and ultimately, saving time and money. An in-house recruiter painted it bluntly to me: “The time and cost to get 5 people through an agency is the same as 1 year’s renumeration for a full time employee. I would rather recruit 5 people myself in 4 weeks and then onboard a full time employee for 12 months with the money I have saved.”

So it appears as though internal recruiters are here to stay. And good for them. The only thing they need delivered at this point is value and tools that save them time. A few specialty items in their toolbox to make them better at their job.

Needless to say, this has all been loads of fun watch from the offices of Webrecruit North America. The world of recruitment is just waking up. We’ve been awake for a long time.

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