The dilemma of “building internal expertise vs. outsourcing the process” is familiar to every growing business. Traditionally, an in-house HR manager is seen as cheaper, more reliable, and “closer to the team.” However, when it comes to closing complex vacancies or rapid scaling, this approach often reveals cracks.
The reality is this: in-house HR is an excellent tool for maintaining team vitality, talent retention, and building corporate culture. However, for aggressive or targeted hiring, an external recruiter is often not only a faster but also a more financially viable solution.
Let’s figure out exactly when it’s time to turn to agencies or independent recruiters, and how “cheap” internal hiring might be eating into your budget.
5 triggers that show in-house is struggling
How do you know your internal department has reached its limit? Here are the five main signals.
1. Searching for niche or C-level specialists
Your HR is great at closing Sales or Mid-level Developer positions, but when you need to find a CTO, a Marketing Director, or a specialist with a rare tech stack, the process stalls. External recruiters (especially Executive Search) spend years cultivating networks of top managers who aren’t actively seeking work. In-house specialists simply don’t have access to this “hidden market.”
2. Sudden scaling (hiring spikes)
You’ve raised investment or are launching a new division, and you need to hire 15 people in a month. One in-house recruiter is physically capable of managing 5-8 complex vacancies simultaneously. Overloading leads to “hiring anyone” just to fill seats or missing project launch deadlines.
3. The HR department is drowning in operations
If your HR team conducts interviews while simultaneously organizing team-building, calculating vacation days, resolving conflicts, and handling onboarding, recruiting will always suffer. Focus blurs, and the quality of candidate funnels drops.
4. Entering new geographic markets
Opening an office in Poland, the UK, or the US? An internal recruiter doesn’t know the local legislation, candidate mentality, or local salary ranges. An external agency with expertise in the specific region will save you months of blind attempts.
5. The position has “hung” for over two months
If a vacancy remains open for a long time, it becomes “toxic” to the market (candidates assume something is wrong with the company). This is a classic trigger: your recruiter’s tools and database are exhausted; you need a fresh perspective and new search channels.
The hidden costs of “cheap” in-house hiring
“Why pay an agency 15-20% of a candidate’s annual salary if I have an HR manager for $1,000 a month?” This is the most common illusion among founders. Let’s calculate the hidden costs.
- Expensive toolkit: Professional recruiting requires paid subscriptions. LinkedIn Recruiter Corporate costs about $10,000 per year. Add to this an ATS (Applicant Tracking System), paid postings on niche job boards, or international platforms. Agencies have already covered these costs.
- Cost of vacancy: If a key developer or a strong Sales Manager cannot be found for 3 months, the company loses real money every day due to lost profit or delayed product releases.
- The price of a mistake: An internal HR manager under pressure from leadership may fill a vacancy with a “compromise candidate.” Statistically, a bad hire costs a company between 30% and 150% of that employee’s annual salary (costs of salary, onboarding, taxes, and subsequent termination).
- Maintenance of the in-house recruiter: Salary, taxes, workspace, vacations, sick leave. If you don’t have a constant flow of 10+ vacancies every month, your recruiter is simply “idling” part of the time on your dime.
Case Studies: When External Recruiting Is Cheaper
Case 1: Searching for a head of growth for a product startup
- In-house scenario: HR searches for a candidate for 4 months. HR salary costs during this time: $4,000. Premium account costs: $1,500. Lost profit due to lack of leadership in the department: tens of thousands of dollars. The candidate is still not found.
- External recruiter scenario: The agency brings a relevant candidate in 3 weeks because they have a warm database. The commission was $6,000.
- Conclusion: By paying the agency commission once, the company saved 3 months of time and started generating profit from the new top manager’s work sooner.
Case 2: ppening a new R&D center (hiring 10 developers)
- In-house scenario: The company hires two additional recruiters to strengthen the department. The adaptation process for new recruiters takes a month. The team meets the plan in 5 months. Afterward, the two recruiters become redundant, but firing them involves additional stress and reputational risks.
- External recruiter scenario: The company hires an RPO (Recruitment Process Outsourcing) partner for a fixed project. The professional team jumps into work on day one and closes the needs in 2 months. After the project, the cooperation ends painlessly.
- Conclusion: The flexibility of external teams allows for scaling without bloating the permanent staff.
Summary
Your own HR is the heart of the team, which must beat in the company’s rhythm, caring for culture, adaptation, and retention. You shouldn’t turn them into a machine for continuous sourcing.
An external recruiter is a surgeon’s scalpel: an expensive but maximally precise tool needed to perform specific or urgent operations. The secret to a successful business isn’t choosing one over the other, but knowing how to combine these tools depending on current business objectives.
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