In-house Staffing vs. Managed Staffing – The Pros and Cons

Hiring the best suitable candidate or outsourcing a talent is an age-old debate for enterprises and staffing decision-makers. In an aggressive business environment where accelerating revenues, minimizing cost, and streamlining operations are critical, decision-makers are usually challenged with a vital question — managed staffing or in-house hiring, which is better? While both scenarios offer a list of positives and negatives, it is better to completely understand the pros and cons to choose an apt solution.

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In this article – 

1.   What is In-House Recruiting?
   •    Advantages of In-House Recruitment
   •    Disadvantages of In-House Recruitment
2.    What is Managed Staffing?
   •    Advantages of Managed Staffing
   •   Disadvantages of Managed Staffing
3.   Hiring In-House or Outsourcing: Which is right for you?

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Let’s look at the pros and cons of having an in-house team vs. outsourcing talent.

What is In-House Recruiting?

In-house hiring refers to recruiting candidates for the company internally with a dedicated hiring team instead of relying on outsourcing to external recruitment firms.

The Pros and Cons of Hiring In-House

Advantages of In-House Recruitment

• In-house staff is exclusive to the company. This allows quick response, onsite availability, and a systematic approach to problems or solutions. Face-to-face interaction offers better engagement between employees and employers. These personalized conversations lead to better execution and implementation of solutions.
• It also offers absolute control to organizations over staffing and critical HR issues. A constant salary and room for growth directly impact the attainability of in-house members, and such members are associated for a longer duration with the organization.
• Maintaining confidentiality concerning intellectual property becomes easy. A legal non-compete contract prevents the leakage of any confidential information.
• Technical issues are resolved quickly as the talent is available onsite and is responsible for the smooth functioning of the organization.
• Creates trust in the market as potential investors, customers, or revenue generators show more interest in in-house teams and technology. This boosts overall company valuation.

Disadvantages of In-House Recruitment

• Scouting for the best suitable talent can be tough, especially in smaller cities.
• Cost per talent is high as suitable candidates expect more salary and additional benefits.
• Searching, interviewing, and onboarding a talent takes time & resources, and so does overlooking them.
• The in-house team also needs management, resulting in higher overheads and additional costs.
• The cost of maintaining an employee during business downtime also adds up to the overall budget.

What is Managed Staffing?

In simple words, Managed Staffing refers to recruiting candidates for the company externally by relying on outsourcing / external recruitment firms.

The Pros and Cons of Managed Staffing

Advantages of Managed Staffing

• With Managed staffing, the cost is predictable and budget-friendly. No additional price, such as medical benefits or bonuses, is attached to managed staffing. The company only needs to pay for selected services while onboarding a managed service provider.
• Managed service providers are experts at recognizing business requirements and providing a staffing package that best suits the company’s business needs. These services are offered under a serviced agreement, thus, ensuring zero burdens to the company.
• Managed staffing offers unmatched subject-matter expertise and market experience. With great exposure to different domains, outsourcing service providers can provide the best solution and approach to an issue.

Disadvantages of Managed Staffing

• The risk of losing intellectual property is always there.
• Unavailability of staff at the company’s location can be challenging in some situations.
• The communication gap can cause a serious crisis if not resolved quickly.
• Managed staffing with the best solution can be expensive.
• Timely delivery of solutions or work can be an issue in some situations.

Hiring In-House or Outsourcing: Which is right for you?

Three vital factors determine a company’s hiring approach to in-house onboarding or managed staffing:

1. Cost
2. Expertise
3. Flexibility

Having a blended approach is the best solution for hiring talent. While in-house onboarding may not be the best solution for small businesses or startups, it is the right solution for companies looking to have a team. It is important to understand that in-house hiring and managed staffing’ are not exclusive solutions. Businesses need to use them simultaneously to attain maximum benefit and goal attainability.

Furthermore, scenarios like COVID have compelled human resources to think differently when onboarding a talent. When the world is going remote, and office spaces are sparsely open, having a hybrid approach is essential for the future.