Outsourcing vs Recruitment: Which is Better

When you start a project, you are going to be faced with the question of selecting staff to implement it. To do this you can either contact a recruitment agency to find specialists for your team or consider hiring an outsourcing company. Below we discuss the key differences between these two different approaches, their pros, and cons, all so you can make the choice that is most beneficial for you. Stay tuned and enjoy reading!

Outsourcing and Recruitment: Definition

There are several methods of recruitment if you want to start your project. One is outsourcing and the other is recruiting. These two methods are very different, but despite this they share the same goal: to provide you with reliable professionals for your business. In this article we want to go through the advantages and disadvantages of these methods so that you don’t make the wrong choice, but first we need to define them

What is Outsourcing

Outsourcing simply means employing a third party on a temporary or continuous basis to perform services or carry out job duties. A company function may be moved to a far-off country or a business process may be transferred to a close-by country as part of outsourcing, which also encompasses domestic and international contracting.

What is Recruiting

Recruitment is the search for and selection of professionals for a particular vacancy. 

The steps in the recruitment process can be as follows:

– The search for a suitable candidate according to specific requirements

– recruiting

– telephone and technical interview

– selection 

– candidate recruitment

– on-boarding

Pros and cons of Outsourcing

It is a common practice around the world to outsource some business processes, i.e. to third party suppliers.  

Outsourcing services can bring many advantages, especially in the IT industry. For example, reducing the cost of employee equipment and improving operational efficiency and competitive advantage through increased development speed.

In spite of its significant advantages, outsourcing has its disadvantages, such as the possibility of losing control over the operations being carried out. 

Therefore, before making a decision to outsource any tasks, it is necessary to consider all the advantages and disadvantages, as well as to choose the right outsourcing company.

Read about how to choose the right outsourcing company in our article: “Pros of Choosing an IT Company to Start a Project“.

Pros of Outsourcing

How do you know which solution is right for your project? Only by knowing exactly what the advantages and disadvantages of a solution are. The success of your project will directly depend on your choice. Therefore, in order to help you decide, here are some of the advantages of outsourcing, so that you can understand what benefits you and your project can get in the long run:

1. A wider choice of professionals

When hiring a candidate for a job, you may find that the local people you need are not enough for the needs of your project. In turn, outsourcing opens up access to talented workers from all over the world. This can help you find exactly those specialists who will be the best fit with their skills for the tasks of your startup.

2. Increased efficiency

You may get a more effective, efficient, and frequently higher-quality service by working with an outsourcing business that specializes in the process or service you want them to perform for you.

3. A staffed team 

By working with an outsourcing company you don’t need to hire additional employees, which means you can save on project budget and lower costs on training of new team members, purchase of necessary equipment and other costs related to hiring

4. Your competitive advantage will increase

Outsourcing offers you more information, services and talent. In addition, outsourcing will allow your project to be more flexible and better able to respond to difficulties and rapidly changing conditions, while saving you costs and providing a higher level of service

5. Focusing on business processes

By outsourcing, you can focus on the business process, freeing up staff to work on their core responsibilities.

Cons of Outsourcing

Consider the advantages of outsourcing, but don’t forget the disadvantages in order to understand exactly what you need.

1. Control may be lost

You can provide requirements on what should be done and how it should be done, but outsourcing implies a certain loss of control. This is because you have a contractor working for you, not an employee. It may be difficult to maintain the control you want when the person is not working on site

2. Reduced quality control

The work you requested may be done quickly, but it will require a higher standard and quality than what customers have come to expect from your services. 

3. Security risks

Our world strives for data security and you must be careful when dealing with your customers’ data. Let’s say you want to enter into a contract for a task that requires personal information. By disclosing this information you could jeopardise the security of your company or the privacy of others.

4. Unforeseen expenses

Read the agreements you sign carefully. It’s not uncommon for small business owners to sign lengthy commercial agreements that can have a lot of subtle wording. Beware of pitfalls and read documents carefully as you may incur unexpected and hidden costs

5. Communication problems

One of the possible drawbacks. Project manager – can be the only communication channel between the team and the customer, which can lead to project delays and misunderstandings

Pros and Cons of Recruitment

Recruiting can help you find the right candidates or hurt your business. Here are some arguments about the pros and cons of recruiting for your business.

Pros of Recruiting

Consider the following benefits when engaging recruiters to find the candidates you need

1. You can get good candidates

When delegating a search to a recruiter, keep in mind that they are familiar with the latest recruiting trends and know exactly what candidates various search platforms offer. Also, recruiters are more impartial towards candidates as they are less biased than you may have.

2. Increased control

You will be able to set your own quality standards and requirements, as the employee will be working specifically in your business. Also, you won’t have to compete with other clients for their time

3. Quick recruitment of new specialists

The time you could spend poaching candidates and sorting out applications and resumes will be reduced if you use the services of a recruiter. That is, the time to close the vacancy will decrease

4. Adaptability of resources

Businesses, of course, have difficult periods in hiring new employees, such as team growth or layoffs. Good recruiters can anticipate and adapt to change and respond in time to ensure your requirements are met.

5. Personnel reserve

You can create your own talent pool through recruiting. Those whom you may not have previously selected may be able to work with you in the future or on other vacancies. This way you can ensure fast hiring in case of urgent need.

Cons of Recruiting

A staff that is already familiar with your work standards and your corporate values is good. But in this case, there are also disadvantages.

Here are a few downsides to recruiting:

1. Few new ideas

Internal employees and recruiters may have few fresh ideas, as they have long been working with the culture of only your company. To solve this, you may have to attract new candidates who can bring new ideas to your project.

2. Time to get to know and adapt

If your project timeline is tight, you need to take into account the fact that a new employee needs time to adapt, get to know the team and the project. All of this can take time which may not be available

3. Employee onboarding can be expensive

In addition to the fact that adaptation and familiarity takes time, hiring a new employee can also entail costs. After all, new employees need to provide an efficient and functional place of work. This may require the purchase of new equipment, office supplies, etc.

4. Limited talent pool

When your talent pool is depleted, you need to go beyond recommendations to ensure that the most suitable candidates work on your project. This needs to be done as quickly as possible in order to keep up with the development and the set plans. Internal resources rarely have the wide networks and connections that external employees have

5. Difference in cultural traditions

Delays and misunderstandings can result if the candidate the recruiter provides may not fit your company’s values and culture

When to Choose to Outsource

Outsourcing can give you a number of advantages to your project if you are pressed for time and budget. For example:

• Proven staff: You can be sure that the specialist has had experience of working on projects and can work cohesively as part of a team. And, just as importantly, can work and communicate with specialists in other positions and other technical expertise
• Technically proven candidates: Specialists are already matched by experience and literacy
• Well-established communication: if your deadline is limited, the process of establishing communication between unfamiliar candidates from the recruitment agency may take time. In an outsourcing company with a well-established team, it’s easier and quicker for specialists who have already worked with each other on several occasions to find common ground and solve any problems that may arise on a project.
• More company resources: you can be provided with different candidates and the latest expertise
• Quicker replacement of the developer than a recruiting agency: if you need to replace a specialist, you can save time on searching for him/her, as he/she can be replaced by another member of the team, whereas if you turn to a recruiting agency, you will have to start the whole process over again, from the beginning of the search, interviews and signing contracts. In other words, the outsourcing company can work on your project without any downtime for the search candidate
•  Already set up the equipment: The specialist workplace is already set up and you don’t have to worry about the equipment being in good working order 
• A more comprehensive approach: you can get different services, especially in the long term if additional development is needed, e.g. design or any updates

Conclusion

When deciding on one solution, outsourcing or recruitment, weigh up all the conditions of your project carefully. Namely, the budget, time, project goals. Recruiting can be of significant benefit to your project. But unfortunately there are also times when your resources cannot allow you to control the hiring process. In that case, outsourcing can be a profitable solution for you. We have seen in this article that outsourcing and recruitment have their pros and cons. The best option will depend on the needs and resources of your project at the time.

For more information on how to choose an outsourcing company, see our article “Pros of Choosing an IT Company to Start a Project” or ask our OSSystem specialists for help. Our team will be happy to help; advise you on your project and help you with its design. You can fill in the feedback form on our website and our team will get back to you as soon as possible.