Build, Buy, or Borrow: How to Structure Your Talent Team
When should you build your own in-house talent acquisition team, buy recruitment services from an agency, or borrow a team of recruiters via an embedded recruitment model?
We all know that hiring top talent is essential for any company's success, and having the right talent team behind you is a must to put the wheels in motion.
Today, companies are spoiled for choice when deciding what kind of recruitment team is the best solution for their hiring needs, and this decision can be a tough one to make.
Do you build your own in-house talent acquisition team, buy recruitment services from an agency, or borrow a team of recruiters via an embedded recruitment model?
Build, buy, or borrow?
It's not an easy question to answer, and many factors are at play when making the right choice for your organization. So, stick around to find out what factors you should consider and how to apply this information to decide whether you build, buy, or borrow your talent acquisition team.
Build an In-house Team
One of the most obvious ways to bring on recruitment competence is to hire your own talent acquisition in-house.
Going this route guarantees you'll have people fully integrated into your company's culture and processes, which means they'll better understand the kind of talent you're looking for. Building an in-house recruitment team can be a good option for companies that have a reasonable hiring volume and would like to have more control over their recruitment process and candidate communication.
- Control. Let's start with the obvious - control. When you build your team, you decide your hiring priorities, who is on that team, and how processes are run. Essentially, you have complete control over your recruitment function. But with so much control comes a lot of responsibility, which could be a con for some (more on that in the cons list).
- Consistent brand communication. Having your own team means you have full insight into and control over candidate communication. Your team should be well-versed in your mission, vision, values, and tone of voice, and together you can craft messaging that resonates with who you are and what candidates are looking for. A complete understanding of your brand also means you and your team can quickly turn around employer branding material like landing pages, blogs, and ads to boost hiring efforts.
- Niche into core competencies. Every organization is unique. You may be in a unique industry, work with niche technologies, or even operate in highly specific markets. Regardless, over time your internal talent team will become best-in-class at meeting the needs of your niche as they build up competency and confidence over time.
- Expensive. Between salaries and social costs, running an entire department is costly - not to mention the actual recruitment costs that come with building a full team. And these costs don't disappear after hires are made - they are recurring so long as they are with your company. For some, this might be worth it, but adding headcount isn't always so realistic for smaller teams.
- Time-consuming. It takes time to build a winning internal talent team, and training and getting them up to speed can take considerable time. This is one of the major drawbacks of choosing the "build" route. Because even though managers are knocking at your door with urgent requests, building up your team takes time, which means you need to be ready to accrue opportunity costs along the way.
- Volatile. When you hire a time, you're responsible for the well-being and success of your team members, which means that you need to set aside managerial time to onboard them, develop them, and watch them grow into new roles - even if it's not at your company. It's this volatility that's another con for building your in-house team. The investment you put into the team could be taken away in a flash should they decide to move on. Additionally, if hiring freezes, investments stop, or sales slow, you might need to make a difficult choice to lay your team off, which is a life disruptor for them and a brain drain for you.
Buy Recruitment Services from an Agency
Recruitment agencies are helpful when you're looking to fill a few roles or want veteran recruiters with a lot of experience. They specialize in finding and placing candidates into job openings on a project-by-project basis, so if you have a challenging role on your hands, or a low hiring volume (>5 hires), this might be the best option for you.
One of the main benefits of recruitment agencies is that they typically already have a pool of candidates they can draw from, and they tend to have expertise in specific industries or job functions. Therefore, they can often quickly bring in candidates to the process, which positively impacts their time-to-hire.
If your in-house team doesn't have much time to dedicate to recruitment, they will handle a lot of the operational work for you, which can be a lifesaver for companies who need to fill roles fast but don't have the time or resources to do it.
- Quick access to candidates. Most traditional recruitment agencies have an extensive network and candidate pool at their fingertips. This equips them to turn around a shortlist of candidates reasonably quickly. However, the relevancy of these candidates is still up for debate since traditional agencies have limited insight into your company culture or even the role at hand.
- Niche domain knowledge. Agencies often specialize in a domain, market, or even seniority. So, if you don't have this competence in-house, it's a great idea to work with an agency to fill the knowledge gaps you have in your team temporarily. For example, when making the first hire for a new department or entering a new market.
- Transactional and low commitment. Another upside of working with an agency is that they require little investment from your team. Often, you engage an agency to help you fill one or two roles, which means that once those are filled, your collaboration with the agency comes to a close. This is a great option for teams who don't have the time or budget to scale up their internal team or don't need to work with a partner at a more strategic level.
- No control over process or communication. Since recruitment agencies work with you on a transactional basis, they work outside your team, which means they likely have their way of speaking with candidates, giving feedback, conducting screenings, etc., and this may not necessarily align with how you would like to conduct candidate communication or the process as a whole. Additionally, since recruitment agencies are paid when the job is done, they may be apt to take process shortcuts that could be detrimental to the quality of your process.
- Expensive when recruiting at volume. Speaking of payment, agencies are paid through a commission model. They typically take 20-25% of the new hire's salary. A percentage of this size might be within budget for a role here or there, but if you're recruiting at scale (>10 roles annually), agency fees pile up quickly. This commission model also means that recruiters are indirectly incentivized to negotiate a higher salary for their hire since a higher salary means a higher commission. This isn't always the case, but it's something to keep in mind when picking out a recruiter.
- Disconnected from your team. Last but not least, one of the major drawbacks of working with an agency is that they sit outside your team. The pitfalls of this disconnect can manifest in several ways, but it mostly boils down to this: they don't understand your process, how to work with your hiring managers, what your culture is like, or why one candidate is a better fit over another for your specific needs.
Borrow Recruiters through Embedded
Embedded recruitment providers are a type of recruitment service that involves outsourcing all or part of a company's recruitment process to an external provider.
The difference between an embedded recruitment team and a traditional recruitment agency is that an embedded recruitment team dives deep within the company, meaning they work closely with the in-house team to source, screen, and hire candidates from A-Z.
The embedded team comprises experienced recruiters who are well-versed in your company's culture, values, and recruitment needs. This means they can provide a more tailored and integrated recruitment service than an external agency.
Going embedded can be a good option for companies that want to outsource their recruitment needs but still want to maintain control over the process and have a dedicated team working with them.
When you borrow recruiters from an embedded recruitment company, you're essentially getting the best of both worlds - you have the expertise and resources of an external provider. Still, you also have a fully integrated team into your company's culture and processes. Therefore, this can be a good option for companies that want to scale their recruitment efforts quickly without sacrificing the quality of hires or the candidate experience.
- Integrated team, shared goals. Unlike traditional agencies that operate outside your organization, an embedded delivery team fully integrates into your current setup within a matter of days. That means they share your systems, goals, processes, and culture, so it feels like they are a part of your in-house setup. Embedded teams also charge a flat monthly fee rather than following a traditional pay-per-hire commission structure, which disincentivizes opportunistic behavior and reinforces that you are a shared team with a shared goal: hire the best person for the role.
- Control. Just like with an in-house team, embedded gives you complete control over your narrative, process, systems, and candidate experience. Not only does this help to develop your employer brand further and attracts candidates who align with your company's values and mission, leading to higher quality hires and better retention rates.
- Flexible. While embedded may have the look and feel of an in-house team, it also adds a layer of flexibility that in-house teams don't have. Embedded lets you plug skilled recruiters into your team when you need it, for as long as you need it. So, if hiring freezes, investments stop, or sales slow, you can downscale your team. And if hiring picks up, new investments come in, or sales spike, you can scale your team up to meet hiring needs.
- Expensive if you have a low hiring volume. Embedded isn't for everyone, and while the flat monthly fee structure can be a lifesaver for some, it can be costly for others.
- High commitment. You typically engage an embedded recruitment partner like Amby for several months. While this isn't as big of a commitment as bringing on a full-time team member, it's worth considering before engaging in a longer-term contract.
When to build
First of all, let's recap the factors that influence your decision.
- Hiring volume
- Role type
- Hiring urgency
Building your in-house team might be the best option if you have a long-term hiring roadmap, strong in-house competencies, and a low hiring urgency. Although it takes time to build and train your internal team, it may be worth it in the long run if you can manage the in-house hiring you have today. However, remember that this likely means that other roles may need to take a backseat while you spend time and budget investing in building a solid talent function.
When to buy
Engaging a traditional recruitment agency makes the most sense when you have a low hiring volume (<10 roles annually) but urgent or niche hiring needs. For example, if you need to make a C-level hire or fill a particular role within the next month, you don't have time to do it in-house. However, this option doesn't scale very well. So if you have a high hiring volume, this option will quickly become expensive and disconnected from your core team.
When to borrow
The option to "borrow" an in-house team via an embedded recruitment model is best when you have a moderate-to-hight hiring volume but lack the capacity or knowledge to fill all the roles in-house. Bringing on an embedded partner can provide you with expert advice, help you build talent infrastructure, and give you all of the tools (and people) you need to develop your own in-house team down the line. It's also a recession-proof way to get the benefits of an in-house team but with the added flexibility of an external partner.
Build, buy, or borrow; the choice is yours. Whatever you decide, we wish you the best of luck on your talent journey, and we're always here if you need us!
Growth Marketing Manager at Amby, who loves writing about the tech, venture capital, and people space.LinkedIn