Are external recruitment agencies still relevant in today’s market?

HRM 25 Jan 2013

As social media such as Linkedin, Facebook and Twitter become more prevalent in today’s market, the question is whether external recruitment agencies are still relevant in today’s market. The recruitment landscape for external agencies is made even more difficult as large international companies beef up their internal resourcing team to source for candidates, with the objective of being less reliant on external recruiters.

While there are certain merits in building up an internal resourcing capability, the main reason for a company pursuing this exercise is cost containment. However, employers with ambitions to hire the best talents in the market should contemplate if cost should be their main consideration. The quality of a workforce almost always dictates the company’s future performance.

Large international companies that build up a big internal resourcing team often hire a large part of this group on contract; this is due to uncertain cyclical nature of recruitment. This limits the pool of recruiters that are available in the market and also the ability of a company to hire the best in-house recruiters. It may also provide uncertainty to candidates who are on contracts, as to whether the company is able to provide a career opportunity or simply offering a job. Additionally, in-house recruiters have other HR duties to perform as they don’t dedicate 100% of their time on knowing candidates from the market. On the other hand, external recruiters spend almost all their time and effort to build these valuable relationships with candidates and as such, know a much wider pool of candidates. In today’s time and age, where the workforce is more transient, keeping up to date with the change of talent pool is a critical component to recruitment.

Often, the most outstanding candidates are not those that are on the market, but rather those that are in the market. Internal resourcing teams in companies often only have access to the best talent which is on the market i.e. candidates which are actively looking to switch roles. External recruiters, however, make it a point to know candidates from the industry and as such, are able to source actively for the best talent from a much larger candidate pool. External recruiters also understand the competitive landscape and are in the best position to represent companies to advise candidates on a career move.

Good, experienced external recruiters would thoroughly appreciate the industry and the needs of their clients, often before a JD is even provided to the recruiter. A candidate with a specialised technical skill or with an excellent sales track record can prove to be a key component to the success of a company.  So the question employers need to ask themselves is not “how best to keep a lid on recruitment cost”, but rather “how much a key talent could bring in terms of tangible benefits to the company relative to the financial cost it pays to the recruitment firm”.


Contributed by:

Gary Lai

Managing Director – SEA

Charterhouse Partnership

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