To insource or outsource – how to decide which TA model is for you? (part 1)

Considering what type of recruitment model is the most suitable for an organisation is a question that I’ve been asked many times.
Should we insource and build up an internal TA Function, or, should we outsource to external vendors? Well, there is no straightforward answer as there are many different factors to consider when making the decision.
But before I dive into them, I must highlight the role of technology and how it has been crucial in the evolution of both the insource/outsource TA Models over the past five years.
As technology improves and becomes more accessible, it has created new types of services that can be provided to a TA Function by an external vendor, or, be provided by an internal TA Function itself to the business.
However, it is also useful to note that the factors impacting our decision to implement an insource or outsource TA model have not changed, even though the weightings and the factor elements themselves had evolved.
In this part 1 of 2 series (part 2 is now available here), we shall look at the internal factors that impact whether you choose to insource or outsource:

Figure of factors affecting your decision to insource or outsource.
Fig: Factors affecting your decision to insource or outsource.

Brand & Value Proposition

If your organisation’s brand is strong and well-recognised, and your value proposition is attractive to prospective candidates and current employees, there tends to be less of a need to outsource.
In this case, your organisation probably has a screening issue rather than a sourcing issue where you receive more applications than you can handle. This is called the “tea cup of jobs and the fire hose of candidate effect”. This can now be automated using bots such as Mya or Olivia to help you manage the volume.
If on the other hand, the brand is not well known and the value position is neutral, then sourcing and recruitment marketing become more important. You can choose to hire external agencies such Clinch or JXT to help to improve your brand or use tools such as Hiretual to help you source more candidates.
Applying the right mix of technologies will significantly change how your TA services are provided and will create competitive advantage.

Business Drivers

Aligning your TA Function to the key business drivers are essential if you want it to be relevant and valued by the business. Business Drivers have a huge impact on the decision to insource or outsource.
For example, if Diversity & Inclusion is a key business driver, this may be more readily accomplished with an insource model where the team can take a total Talent Management approach to advice the business.
If your business driver is based on Agility with the need to ramp resources up and down quickly and efficiently, an outsource model will be better placed to support an organisation with extra resources both onshore and offshore.

Organisational Culture

This factor is key to organisations who see TA as one of the core values within their organisation.
If your business has a very strong people-centric philosophy and sees the ability to access and acquire Talent as critical, then you will want to own the function and go for the insource model.
Do note that this does not mean you can’t go for an insource model if your organisation does not see TA as one of their core values. It just means you might face more challenges than you normally would, and you will need to be prepared to work around them.

Existing Infrastructure

The level and relevancy of infrastructure is critical for a TA function to be effective and be competitive in its search for Talent.
If your organisation does not have or cannot provide the required level (e.g. IT infrastructure) to be competitive, and if the quality of Talent and timing is of essence to your business, then you should seriously consider using an external vendor who can bring in the right resources.
The alternative to this is to increase head count in your internal TA Function or work the team harder, which is at best a short-term solution.
Often, leaders in TA do require influencing skills and the ability to develop ROIs to convince senior management of the business cases they are making. If you are interested in learning more on influencing I would strongly recommend you to have a look at Robert Cialdini on the Science of Persuasion and translate it into your context.
If you have any questions or comments, do leave them in the comment section below or reach out for a chat. Continue reading part 2 of this series 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
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