The disadvantages of external recruitment

While external recruitment has become a default for HR teams, it's not without its inherent limitations. What alternative approaches should we consider?
What are the disadvantages of external recruitment?
Establish the "internal mobility" reflex before external recruitment
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One in four French people will have changed jobs by 2022, according to the Observatory of Professional Trajectories. On the scale of the 26 million working people, this represents more than 6 million job changes. It is difficult to evaluate the number of external recruitments, but Cadremploi speaks of 300,000 permanent and fixed-term recruitments, a figure that seems to be underestimated when 8 out of 10 resigners find a role within 6 months of their resignation. 

Controlling HR budgets is the order of the day in most sectors, so it is legitimate to question current methods and consider alternatives to improve the unflattering statistic of only 57% of mid-sized companies being satisfied with their external recruitment.

What are the disadvantages of external recruitment?

Hiring externally has its drawbacks: this option involves visible and often time-consuming additional costs for the various stakeholders. This hiring format can also be seen as a form of strategic refusal to rethink teamwork with existing resources. Finally, choosing this model does not contribute to constructive career management for the company's talent.

The visible costs of external recruitment

What could be more natural for a manager who has just learned of the departure of one of the essential elements of his human resources system than to seek the support of HR in order to find the same profile on the outside?

What are the visible costs of external recruitment?

Advertising and marketing expenses 

For 96% of companies, advertising to attract external candidates remains a must, according to Hellowork figures. Among the different sources of talent acquisition, advertisements cost, depending on the job board, between 200 and 1500€. These prices are rising as it is now imperative to stand out and make a full page presentation of the company and the position, including a video, testimonials, etc....10958,000 ads were posted in France in 2022.

Advertising also takes the form of programmatic recruitment. This aims to proactively address a target of candidates according to both personal and professional criteria. In this case, the costs will be calculated according to the visibility of your ads, which is called the "CPM", cost per thousand or "impressions". This calculation method is also used by Microsoft's Linkedin in its "Campaign Manager" suite.

In addition to the high cost of these solutions, it will take several weeks of training at skill to understand these tools and to manage the defined budgets effectively.

The costs of recruitment solutions

The cost of using the different software

Software for recruitment teams are Applicant Tracking Systems (ATS), Candidate Relationship Management (CRM) and the now indisputable tool, Linkedin Recruiter.

Today, it is not enough to simply reach potential candidates through social networks or email campaigns, but to convert the audience reached into real candidates, to follow the process in teams, to feed the pools of candidates and, finally, to measure their satisfaction. 

An ATS costs on average 5000€ per year, the Linkedin recruiter license is 700€ per month, these are costs that imply a strong involvement of the teams. 

User fees for external recruitment service providers

The fees of recruitment agencies vary according to their business model. A hunting firm costs on average 30 to 35% of the gross annual salary and requires a mandate with an initial advance of 30% of the total amount. A firm generally operates on a success fee basis (candidate start-up) for a fixed fee of between €6000 and 25% of the gross annual salary. 

The costs incurred by external recruitment

Processing external applications

Recruiters are accustomed to using activity "metrics" in order to ensure that they are achieving a satisfactory result for their internal client and driving their business. Here are some of these Key Performance Indicators: 

  • Reach an average of 15 candidates to get a response on Linkedin
  • To reach an average of 80 candidates per phone to get an interesting applicant.
  • Present 10 candidates to achieve a satisfactory recruitment

The amount of activity required to select the right talent varies depending on the position, the quality of the targeting, and the level of requirement of the recruiting manager. Despite this outpouring of energy, 87% of HR managers believe that they did not receive enough applications for their recruitments.

Lack of resources during the recruitment process

Beyond the cost spent by managers to filter and identify promising external candidates, the lack of resources is a burden on the rest of the team and the manager in particular. According to Digital Recruiters figures, a recruitment takes between 30 and 40 working days, during which time the risk of overwork is high and tasks need to be better distributed. Depending on budgets, organization and the ability to anticipate departures, the team can have a professional on a fixed-term contract (a work format that has increased from 8 to 12% of contracts in France in the space of 10 years) or a freelancer(4 out of 10 companies have increased the use of freelancers in 2022).

The necessary training time

Among the implicit costs to be sourced externally are the time allocated to training, and the integration of new employees. This is a key activity, since 17% of employees leave their role within the first 3 months (WTJ figures). Training is a time during which the employee is not yet 100% productive, and is often shared between the HR department, the manager and colleagues, who also lose productivity. According to a study by Monster, companies lose an average of 2 to 3 months' productivity for each new external employee. 

Business tools, collaboration methods, understanding the product or service, assimilating the company culture, are both stimulating challenges and sometimes obstacles to the long-term success of the integration.

Less retention

Employees coming from external environments tend to leave faster than those coming from internal mobility: this time it is the Linkedin Global Talent trends study that shows us the figure of 41% lower retention.

When one out of six hires fails, redoing the internal recruitment process brings a huge additional cost and has a negative impact on the team's morale.  

Alternatives to external recruitment

What are the alternatives to external recruitment?

Several modalities can be conducted instead of or in parallel with external recruitment:

  • Paying attention to the motivations of the candidates in addition to their aptitudes is essential today
  • Promoting a culture of internal mobility, whether for short projects or permanent positions, is requested by employees and must now be established in the internal logic.
  • Feed a pool of freelancers, one of whose assets is to infuse new knowledge into the organization.
  • Tool the new vision to arbitrate between different options.

Capitalize on candidates' skills

How do you define "professional appetence"?

Job aptitude can be defined as a natural predisposition or a particular interest for a specific type of work or field of activity. It is an important dimension to take into account in the recruitment and career management processes, as it helps to better identify the most suitable profiles for positions and to foster employee commitment and motivation. By using job skills as a recruitment criterion, companies can better target candidates who have the potential to succeed and thrive in their jobs.

How to capitalize on professional skills?

While there is no longer any doubt that the acceleration of technology and digital assistance is changing the jobs and skills needed, the soft skills dimension will take precedence over many of the purely technical skills. According to Accenture, these will be critical in exploiting innovations and changing work habits. 

It emerges thatassessing aspirations and interpersonal skills remains a headache for companies. The proof of this: even if personality tests are used by 76% of companies, 90% of them do not take the results into consideration when hiring or not. How can you get an idea of someone's personality in just three one-hour meetings? 

Companies such as Sthree, a leader in recruitment, and Critéo, offer candidates the opportunity to spend half a day with them, in a work situation, and then to join them in order to get a feel for the cultural and behavioral fit on both sides.

Promote a culture of internal mobility

Opening a position externally at the slightest departure from the team is a reflex, what proportion of Talent Acquisition Managers question it? 

However, other options can be considered successfully: 

Benefit from the expertise and flexibility of freelancers

Examine in the pool of freelancers previously constituted the appropriate resources. These resources are not only attached to the digital professions (copy writer, community manager, ...) of the IT but also gathers the qualifications of the support professions in an increasing way. 

Our Webinar with Pentalog discusses the range of options for managing these resources effectively.

Instill a policy of individualized career management

Proposing several career paths to all employees is the best way to get them to think about the one that best suits them. Of course, already defined patterns, such as succession plans, reassure managers and HR, but they also lead to a reproduction of roles and do not contribute to organizational innovation. On the contrary, we recommend a gradual transition to an organization where skills takes precedence over roles, which profoundly changes companies and allows individualized careers to be shaped

Here are our suggestions for articles:

Give managers and TA teams a global vision 

Of all the challenges managers face, acquiring the right skills remains the one for which collaboration with their HR team is most essential. Internal recruiting is a topic that HR has been addressing but has failed to embed in team leaders.

Here are our 4 tips to give an overview of resources:
  1. Mapping of know-how at the level of the organization's businesses.
  2. Decline the mapping of skills at the level of each team.
  3. Display the skills transverse to several trades.
  4. Integrate new internal positions into a talent marketplace to deduce the variety of skill sources sought.

We offer several pages to explore the alternatives to external recruitment: 

Conclude on the risks of external recruitment

External recruitment has its advantages, such as bringing in new ways of thinking or specific expertise that is not available within the company. Today, the challenge for companies is to move forward at the same pace as their businesses, a challenge that cannot be met by a single exogenous solution. To be carried out in an indelible way, current transitions must be rooted, as a priority, in the development of current resources.