Hiring can make or break your business; therefore, it only makes sense that your choice of outsourced hiring vendor can, too. However, with so many options, choosing the right partner can be time-consuming for even the most organized employer. HR companies, staffing agencies, headhunters — each type of organization takes a starkly different approach to recruiting and hiring qualified candidates. So, if you’re shopping for hiring vendors, which should you choose? This article presents a high-level overview of each type of hiring vendor, presenting advantages, disadvantages, and overall goals.
Full-Service HR Firms
Full-service outsourced HR firms like myHR Partner handle all aspects of human resources, viewing the hiring process as an integral part of a cohesive HR strategy.. These firms think holistically, shirking “placement” mindsets in favor of careful recruiting and hiring that’s in step with your company’s culture and goals.
Staffing Firms
Staffing agencies interview and catalog mass quantities of applicants so they’re poised to place candidates at a moment’s notice — often recruiting employees for urgent short-term contract positions or seasonal work. Speed and volume are staffing services’ calling cards.
Corporate Recruiting Firms/Headhunters
Recruiters, also called headhunters, generally fill permanent roles. Most recruiting firms focus on specific industries or seek out high-level talent for executive positions. Some headhunters are affiliated with larger recruiting organizations, while others operate as independent contractors without the support of a recruitment firm.
Pricing Model
Full-Service HR Firms
Full-service outsourced firms like myHR Partner charge based on the time required to fill roles, not by placement fees or salary-based commissions. Being paid for effort rather than placement lets us devote the utmost care to searching for and evaluating candidates. Notably, we often come in at a fraction of the cost of staffing agencies and recruiters, especially for higher-level roles. The fact that our clients don’t pay per hire also means they can hire as many of the applicants we bring them as they want. When this happens (and if often does), the calculated cost per hire is dramatically less than what you’d pay a staffing agency or recruiter. Plus, many companies find that the employees we hire have significantly higher retention rates and ROI than those sourced by talent acquisition or staffing agencies!
Staffing Firms
Staffing firms make only a small markup on each hire, so their success depends on quantity. Since they are not paid until they make job placements, the typical staffing agency will charge temp-to-hire hourly rates for providing temporary employees, or receive set rates for each placement in the case of permanent staff. This incentivizes them to hire people to fill positions quickly — a threat to the quality and fit of the hire, often landing many of their client companies back at square one.
Recruiters
Recruitment firms and independent headhunters also get paid when they make a placement — the average third-party recruiter earns set rates based on the position’s salary. Therefore, these recruiting and hiring processes create risks similar to those experienced at a staffing agency. When the goal is to hire workers as quickly as possible, exceptional candidates may be missed.
Hiring Strategy
Full-Service HR Firms
At myHR Partner, our proprietary, powerful Hiring Services framework starts with a carefully crafted hiring strategy custom-built for your company's culture, organizational aims, skill needs, diversity goals, and other hiring needs. From there, our highly knowledgeable Hiring Management team does it all for you: creating impeccable job postings, recruiting top talent, screening resumes, conducting interviews, executing background and reference checks, and many other tasks. Because our HR experts are well-versed in hiring efforts across many industries (our team receives up to 20 hours of formal training each year), we have a deep understanding of how to find the best candidates, keeping your company one step ahead in the hiring game.
Staffing Firms
Staffing agencies specialize in plug-and-play hiring based on a high-level understanding of the job need and the current job market — but without a meaningful understanding of your company as a whole. This is why they are often chosen by companies who need short-term workers rather than those recruiting for long-term positions.
Recruiters
A truly effective recruiter will consider your company culture and other nuances of your business to match candidates with open positions. However, when deciding on an HR firm vs. recruiters, remember that recruiting firms are always biased in favor of making a placement.
Applicant Tracking Systems (ATS)
Full-Service HR Firms
Applicant Tracking System (ATS) software electronically houses, tracks, and organizes all facets of the hiring process, including applicant details. Clients who hire myHR Partner for HR services have their choice: they can use our in-house industry-leading ATS, or we can collaborate using their own ATS system.
Staffing Firms
The software used by the average staffing agency is not the same as the technology used by full-service HR firms. In fact, this is one of the key differences between these two options. The in-house technology used by temporary staffing agencies is industry-specific and segments thousands of suitable candidates so that when a job comes in, anyone who is actively seeking work is easily searchable. This makes for a speedier recruitment process; however, the agency’s client company will not have access to ATS software.
Recruiters
Similarly to temporary staffing agencies, recruitment firms use their own proprietary software for searching and recruiting.
Recruitment Style
Full-Service HR Firms
Fully outsourced HR firms like myHR Partner are focused on recruiting talent specifically for each position that needs to be filled at your organization. No databases — no exceptions!
Staffing Firms
Many companies that fall under the “staffing agency” umbrella source candidates through databases designed for volume and speed. This works for some scenarios, but keep in mind that individuals in these databases have not been vetted for — nor have they shown interest in — a position at your specific company. They are merely part of a larger pool of passive candidates who are actively seeking a new job. It is also noteworthy that some great candidates may not apply to or work with a staffing agency for any number of reasons, including negative experiences, fees, or perceived incompatibility with the caliber of roles that the company offers.
Recruiters
Recruiters tend to be industry-focused and role-specific. They usually have a strong understanding of the aims and goals of your company, as well as the nuances needed to perform a designated role and maintain a database of relevant talent (whether through job boards or other methods). However, two points of caution apply when it comes to the third-party recruitment process. First, a recruitment agency or individual headhunter will sometimes pass along a candidate’s resume to a potential employer before they’ve even spoken with the candidate to gauge interest or availability. Secondly, remember that many candidates prefer not to work with recruiting firms.
Interviewing
Full-Service HR Firms
myHR Partner works with your business to customize interview questions for each role. From there, we work together to advance leading candidates. Interviews are often multi-tiered and last as long as needed to properly engage and vet candidates (especially strong candidates) When applicable, we also utilize our proprietary Customized Fullview Phone Interview Questionnaire — a key component of our hiring legacy.
Staffing Firms
Because high-volume placement is the goal, staffing firms rarely spend significant time interviewing each candidate (typically 10 minutes or less). Some even depend exclusively on online applications and don’t meet or interview candidates at all before recruiting them for positions.
Recruiters
There are many highly qualified recruiters out there, but also some who pull resumes from the internet and send them to clients without ever talking to the candidate! Others will take an applicant’s resume and create an “enhanced” version that makes them look more skilled than they actually are.
Candidate Coaching
Full-Service HR Firms
We present potential employees to our business clients as-is — we don’t tweak resumes, coach interviews, or give them tips on how to seem like a good candidate. The reasoning is simple: we want to help your company land the best hires for all positions. Covering candidates’ flaws would fly in the face of that goal!
Staffing Firms
Staffing firms rarely coach candidates (a win!). However, they may not be telling potential candidates enough, either! Communication is often so minimal that the employees they are recruiting learn little to nothing about the company they’ll be working for — or the new position they’ve been hired to fill.
Recruiters
Because they’re paid based on hiring success, a recruitment agency may edit resumes or engage in candidate coaching to make their client look better in the eyes of a potential employer or hiring manager.
Employee Onboarding
Full-Service HR Firms
Onboarding is one area in particular where the question of “HR firm vs. staffing services provider” is a no-brainer. Because we’re full-service experts and know your business inside and out, we specialize in onboarding services — critical to positioning that sought-after new hire for success.
Staffing Firms
Staffing agencies do not offer employee onboarding services.
Recruiters
Corporate recruiting companies do not offer employee onboarding services.
Make the Right Choice for Your Company's Future
Choosing whether to go with an HR firm vs. staffing services vs. recruiters is a decision that depends on the needs and goals of each employer. Regardless of the type of hiring vendor your company chooses, we have one final word of advice: vet them like your business depends on it, because it does! A reputable hiring vendor will be forthcoming about everything from their confidentiality policy to their team’s experience and will express interest in your company’s future.
Want to bypass the downsides of your local staffing agency or recruitment firm and go with a time-proven hiring partner? myHR Partner has what you’re looking for and more. Contact us for a free consultation to learn more about our hiring services, onboarding offerings, compliance management, and other specialties!
(Please note: While intended as educational, this article should not replace your own due diligence as you decide who to trust with your business’s hiring.)
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