Remote hiring has turned into a real buzzword. So much that businesses of any size have started to hire remote employees who work from a place that is not the company office.
Finding the right talent is never easy. But it becomes even more difficult when hiring remotely. There are typically two different approaches businesses can follow when sourcing remote talent:
Hiring full-time recruiters to build an internal talent function
Working with several external contingency recruiters
With embedded talent teams, however, businesses have a third option for handling their hiring and recruiting processes. In this chapter of the Lano Employment Academy, we will explore the advantages and disadvantages of the three different approaches to sourcing talent.pany offices. But with all that hype, organizations often fail to take a moment to get a clear understanding of the concept and what it implies.
So, what does remote hiring actually mean? How does it work? Why should businesses switch to hiring remotely? And what challenges should they prepare for when hiring remote workers?
Hiring in-house recruiters is the most logical step for startups who want to hire at scale. It might be the costliest (at least from a long-term fixed cost perspective) and most time-consuming approach, but it definitely has its advantages.
Hiring in-house recruiters gives you complete control over the hiring process. From communicating your employer brand to shortlisting candidates, you are in charge of everything.
Following the in-house approach is also advantageous with regard to cultural fit. Those within your company will always have a deeper understanding of both the company culture that exists, and the culture you’re trying to manufacture.
Another advantage of having internal recruiters is that it helps you establish your long-term talent function. The talent function is a company’s backbone - it speeds up growth and supercharges everything that follows. Acquisition? Needs talent. Product? Needs talent. And it goes on.
Hiring in-house recruiters for sourcing and recruiting ensures the sustainable growth of your company and its talent function in the long run. In-house recruiters are not an expense, they are an investment.
As mentioned before, there are also some drawbacks to working with a team of in-house recruiters for sourcing and recruiting remote talent, namely:
Fast-growing companies want to scale fast, but building up an entire talent acquisition function is time-consuming, taking anywhere between six months to a year. Waiting for that long is usually not an option, especially if you have short-term headcount goals you need to hit.
And then there is the cost component. A team of in-house recruiters is a fixed cost that, once utilized, yields fantastic returns. But if you don't have the long-term headcount goals required to maintain a full-fledged talent function, you'll have expensive fixed costs that are nowhere near utilization. And the best recruiters expect high salaries with benefits and stock options.
Experienced recruiters are in high demand, and finding an experienced industry expert in your field is no simple task. What’s more, a recruiter can only perform a specific set of tasks that is less extensive than the tasks covered by a proper talent function.
Can a recruiter screen candidates, facilitate an end-to-end hiring process, and implement your new ATS? Absolutely. Can they source the best candidates and ensure a steady stream of great talent knocking at your door? Absolutely not.
This lack of advanced knowledge of sourcing and recruiting becomes a big reason why in-house recruiters often can’t deliver—or deliver less than if they had sourcing support.
Pros of in-house recruiters
Cons of in-house recruiters
Recruiting agencies operate similarly to the BPO industry. You outsource your hiring to them, and they do all the sourcing and recruiting for you. Here are the advantages of opting for a recruiting agency:
Sourcing and hiring the best candidates requires a high level of skills. In such a demanding function, entry-level professionals can’t deliver. But hiring experienced recruiters is neither cheap nor easy. Most are already working for the big players in the tech sector or other industries, making it difficult to bring quality recruiters into your team.
Recruiting agencies have several years of experience under their belt and have had time to develop their skills over the years. Experienced external recruiters can therefore add enormous value to your hiring process.
From the moment you plan to advertise a position, it typically takes ten or more weeks to fill it. For technical or professional roles, it can even take up to six months. Especially for fast-growing businesses, waiting for six months is not feasible. Recruiting agencies can significantly speed up the entire hiring and recruiting process.
Even though there are also some drawbacks to working with recruiting agencies, the speed with which they hire talent can be impressive.
There is no upfront investment when working with recruiting agencies—unless you put them on retainer. Many businesses see this as a lower financial risk, which makes it one of the primary drivers for choosing to work with an agency.
Despite their expertise and the fact that they can often find and hire talent a lot quicker, there are also some downsides to using a recruiting agency.
Recruiting agencies charge a hefty 20% fee on the salary of every new hire, which is both unpredictable and unjustifiable. Accurately predicting costs and managing the business’s cash flow then becomes a lot more difficult. Also, if the candidate decides to quit soon after starting the position, the money paid for the agency services goes to waste.
While you might be able to negotiate a sliding scale or even a 3-month refund agreement on a placement, this won’t make much difference if the candidate leaves soon after. And, while tempting, negotiating a lower fee could result in less effort being put into filling your positions. After all, the more you are willing to pay, the higher the priority for the recruiters to find you a suitable candidate.
Recruiting agencies do not tell their clients which process/tools they use to source and recruit talent. You agree on a specific timeframe for sourcing and recruiting, and their job is to get it done as soon as possible. This results in a lack of control and transparency.
You don’t know if the same candidates have been sent to other clients before, and since you don’t have access to the full list of candidates that applied, you don’t have a back-up option to fall back on if a candidate quits within two months of joining. Transparency and control are crucial to successful hiring. Unfortunately, you lose both when working with recruiting agencies.
Finding the right candidate is not just about assessing whether he or she has the necessary skills, but it’s also about ensuring cultural fit. The alignment of values and culture between the candidate and the company is essential for healthy growth.
If you hire someone for your company who is not a fit, it will be impossible to collaborate effectively and find a way to make it work. The risk of that happening is high when working with a recruiting agency. After all, it’s pretty much impossible to properly assess a company’s culture over a 30-minute hybrid sales/qualification call.
Pros of recruiting agencies
Cons of recruiting agencies
Embedded talent teams are a hybrid approach to hiring and recruiting, a cross between recruiting agencies and in-house recruiters. As the name suggests, they are embedded into a company’s internal talent function and combine the best aspects of both an internal and an external recruiting and hiring function. Here is an overview of the advantages they offer.
One of the most prominent advantages of opting for an embedded talent team is their pricing. Unlike internal recruiters, they do not receive a salary, benefits and equity, thus saving you a significant amount of money. Nor do they charge a hefty service fee. Instead, they have fixed fees for their services.
Not only does this make it easier to control your cash flow, but it also allows you to consolidate your hiring expenses. That’s because the service fees levied by embedded talent teams include costs for tools and registration fees for different job boards.
Candidates prefer companies that have a good reputation. According to a recent study, 50% of candidates say they won’t work for a company with a bad reputation. Creating a strong employer branding has therefore become a real necessity.
Embedded talent teams use different communication channels - everything from company emails to slack channels - to increase the visibility of your employer brand, so you don’t have to worry about it. And if your employer branding needs to be refreshed, they will work on that too.
Having control over the hiring and recruiting process is crucial for a high quality of hire. Also, you need to know what tools, methods and platforms are being used in the process. Embedded talent teams provide you with maximum transparency and control.
Since they use your communication channels and are essentially part of your talent function, you can keep track of the complete sourcing and recruiting process. Some embedded talent teams will also provide training to your existing talent function. And, in many cases, they find their own replacement by hiring internal recruiters, thus helping you build the long-term talent function you might need.
Hiring and recruiting is always also about presenting your company and employer brand to the world. Even the smallest mistake could have severe repercussions on your company’s overall reputation.
With their experience and expertise, embedded talent teams ensure that your company is always shown in a good light. They are a part of your team through and through.
There is only one drawback to working with embedded talent teams:
Since embedded talent partners are a fixed-price investment, many companies perceive this as a higher financial risk. However, in many cases, this is only a ‘perceived’ risk, and not a real risk.
Committing to a 3-month agreement with an embedded talent partner that involves a fixed cost for this time might seem a bit daunting at first when comparing it to working with on-demand recruiters. However, as soon as the number of hires reaches a certain level, you will start making significant returns.
Pros of embedded talent teams
Cons of embedded talent teams
If you would like to find out more about working with Embedded Talent Teams, Provider, please BOOK A CONSULTATION with our partner Kandidate. Complete the short form, and a member of the Kandidate team will be in touch.
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The Lano Academy is for informational purposes only and should not be construed as legal advice. Lano Software GmbH disclaims any liability for any actions you take or refrain from taking based on the content contained in this article.
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