Is In-House Recruiting bringing value to your company?
Recruiting costs are usually unclear and underestimated. It is seen as an inefficient department, but it doesn’t have to be.
This In-House Recruiting Costs Calculator will help to help you understand the spending in your recruitment department. It sums the salary costs of your recruitment department plus the cost of the tools used to source candidates, creating an overall estimate of your spending.
Note: This calculator and its automated numbers are related to the German market.
In-House Recruiting vs. External Recruiting
The optimal choice between in-house recruiting and recruitment agencies depends from company to company.
One of the biggest factors over this choice is cost. While at first glance it might look like external recruiting is more expensive than in-house recruiting, it isn’t necessarily true in some cases. An inefficient in-house recruiting team can cost more in the long term than the usual 20-30% over the annual salary of the candidate that recruitment agencies charge.
Recruitment agencies offer a faster time-to-hire than in-house recruiting, which can save money by reducing the number of vacancy days. This is due to the fact that agencies have a bigger and better talent pool than most companies, allowing them to match better candidates faster.
Still, employer branding is an important matter nowadays. Your in-house recruiting team will provide you with a stronger employer branding that can help you attract more talent in the long run. They also understand your company’s culture better than agencies, leading to hires that are more aligned with your culture.
Another advantage that agencies have is flexibility. Building a team or department incurs large costs but also creates responsibilities over those employees. If you don’t need constant recruiting, agencies have the leverage here.
Costs of In-House Recruiting
In-house recruiting is a frequently ineffective, long and costly process that is often necessary. It incurs costs that go beyond the salaries of the respective employees, as multiple tools are needed to make the process more efficient. The cost structure of internal recruiting is usually as follows:
- Salaries + Overhead
- Job Ads
- Active Sourcing Tools
- Application Tracking Systems
- Other expenses (e.g. Event planning)
Since companies are not always growing or looking for replacements, an in-house recruiting department isn’t a necessity for every company. Due to its integration into the Human Resources department, this activity can be carried by employees that weren’t hired specifically for recruiting. Even if so, in-house recruiters can most of the time perform other HR-related tasks, amplifying their value.