Skip to Content Skip to Main Navigation

The ROI On Using an Outside Recruiter

by Meredith McGhan

Return on investment, or ROI, compares the benefits of an investment to the costs of making that investment. Successful businesses must look at ROI before making any decision that involves an outlay of expense. When it comes to using an outside recruiter to find candidates to fill crucial positions in the company, calculating ROI is easier said than done. Because it’s so difficult to put a monetary value on hiring the right versus the wrong person, many organizational decision-makers simply assume that it’s more cost-effective to use in-house resources for recruiting. However, hidden costs in direct recruiting endeavors add up. The ROI on using an outside recruiter is actually substantially higher.

If your regular staff is taking time away from their normal duties to focus on recruiting, the cost in lost productivity is adding up. It can consume weeks to read through resumes, especially in today’s economy where there are astronomical numbers of job-seekers. Interviewing candidates can require as much as two hours per person. Adding such activities to routine job duties can make the candidate search stretch out for months. Meanwhile, your company is not only losing the hours your regular staff would ordinarily work, but suffering from the lack of someone in the position for which your candidate is interviewing.

When you hire a professional recruiter, you invest a small amount of time interfacing with the recruiter about your needs and the nature of the position you’re hiring for. The recruiter will fill the position much faster than you and your staff could if left to your own devices, because the recruiter has knowledge, networks leading to talented people, and the time to focus on your case.

In the economic downturn, the employees who remain employed are the A-listers – high achievers who bring profitability and savings to the organizations for which they work. This is not to say that the pool of job seekers has no A-list candidates. Today’s job market is full of gifted people looking for work. However, you can be sure that if someone is still employed, there is a reason. And it is the pool of employed, productive people that a good recruiter will investigate first in order to weed out the B-listers and below.

It’s easier for a recruiter to find these top people than it is for you to find them. Top recruiters have established relationships within their professional networks. They know people at all levels in your industry. By the time you’re done meeting with your recruiter for the first time, they may already have one, if not several, potential high-match candidates in mind for you.

These employed A-listers are often courted for their talents, so even if they’re considering leaving their current job, they may not have a resume in circulation. More likely, they’re entertaining several competing offers. With an outside recruiter’s objectivity and scope of knowledge of your industry, it’s easier for them to discuss your company with regard to your competitors than it would be for a direct representative of your company. Recruiters can spend time with candidates, too – enough to tell if the candidate is excellent or merely adequate.

Overall, even if an outside recruiter’s fee seems high, the speed with which they can find a candidate, and the fact that they can find A-listers, makes it much more cost-effective to hire them. Your company is much more likely to receive a high ROI than if in-house resources are stretched to include recruiting.

More articles from Meredith McGhan

Why Hire an Outside Recruiter?
The Cost of Hiring the Wrong Employee
How To Pick the Right Recruiter