This age-old question is one that I have been asked many times.
Should we build an internal TA Function or outsource to vendors? As mentioned in part 1 of this insource/outsource series, there is no straightforward answer and your decision is dependent on a combination of factors.
In this second part of the series, let’s look at the external factors that will impact your decision on which TA model to build.
Fig: Factors affecting your decision to insource or outsource.
Market Demand for the Supply of Skills
This factor is tied to the organisational brand and value proposition. However, if the skills are critical and in high demand, it may be better to consider the outsource option.
That is because a vendor (e.g. an RPO) typically has a wider reach, different sourcing technologies and expert sourcers who have experience in this industry that can help you find the Talent you need quickly and efficiently.
A hybrid insource and outsource model may be another option. For example, a large financial institution that I have spoken to has outsourced all positions whose salaries are under approximately $60K/year, and they have an internal team that recruits for above this amount as they see this is a channel they need to own.
Alternatively, an organisation that has a strong brand in, say for example Engineering, but have a weak brand in IT, and they may consider outsourcing this area of recruitment.
Type of Recruitment Services & Skills
This factor is not as important as it once was because of technology. As mentioned in part 1 of this series, technology has improved massively and has become more accessible to everyone.
Internal Functions are now able to conduct their own hiring processes efficiently using tools that would previously have only been available through vendors. As a result, this lowers the barriers to running an internal team significantly.
Also, new services that promises to help TA functions recruit more effectively are coming to market all the time. As the market place continues to evolve, the lines between insource and outsource model will continue to blur and you will need to be aware of the latest developments in order to be able to make an informed decision.
Cost of Technology Available
There was a time when the cost and the implementation of technology was prohibitive and, in some cases, you needed an outsourced vendor to provide these services.
This was the case with the MSP-type of model where you needed to acquire expensive software and services to implement. It might be impractical to take on the full costs of these technologies and a better ROI may be to simply go with an outsource model.
However, there are now different options and the cost of software has decreased as new technologies become available. So, before you jump to a decision, conduct a cost-benefit analysis to determine what you really need and measure that against the other factors in this article.
Market & Industry Expectations
This has evolved as well with outsource options becoming more innovative and creative in providing a range of services for both on an ongoing or on a project basis.
For example, previously the thinking would have been that you needed to consider an outsource term of a minimum two years and you needed to offer all recruitment services to one provider. This thinking has evolved; many organisations have two outsource providers and have short project-type of services provided on an as and when required basis.
In conclusion, all options must have a sound commercial Return on Investment (ROI), absolute buy-in from the business and key stakeholders and importantly provide effective reporting.
Hopefully this insource/outsource series of articles have provided you a better idea of factors you should take in to account when deciding which model to implement for your recruitment function.
If you have any questions or comments, do leave them in the comment section below or reach out for a chat. To read part 1, click here.
Cover image: Shutterstock
Trevor will be running a workshop on how TA leaders can align their TA Functions with key business drivers at the upcoming ATC2019. This is a workshop you must attend if you are keen to create a more strategic and high performing TA function. Get your tickets here.
