The Rise of Outsourced Recruiting and Why Small Businesses Are Turning to External Partners

Eric Mochnacz
April 26, 2024

In an ever-shifting and unpredictable job market, small businesses are starting to discover the value of outsourcing recruiting to experienced external partners.  There are a number of benefits to choosing to work with an external recruiting partner rather than keeping it in house.  Working with companies who specialize in recruitment process outsourcing (RPO) gives you direct access to professionals who can devote their entire attention to finding top talent for your business.  Let’s look at the shift companies are taking to move outside their internal workforce to elevate their recruiting efforts and build their teams.  

How Fluctuations in Staffing Harm Small Businesses

Predictability in your business contributes to productivity and workflow efficiency.  Fluctuations in your staffing needs and your inability to close open roles adversely impacts that productivity and efficiency.  If you have a sudden departure, current employees need to take on additional job responsibilities, inhibiting their ability to complete their standard day to day responsibilities.  Increased workload leads to burnout, employee dissatisfaction and disengagement, and turnover.  

Consistent turnover erodes employee morale and company culture.  It also impacts your employer brand, as the perception you can’t retain employees impacts how job seekers and your industry perceive your company.  People don’t want to work for a company that fails to engage and keep its employees.  Regular turnover leads to instability within a small business.  

Instability in your workforce makes strategic, intentional workforce planning challenging.  Small businesses often have limited resources and any sudden changes in their workforce may not be as simple as hiring a backfill, especially if it’s an unanticipated cost.  Hiring and onboarding new employees, when you hadn’t planned on having to spend the time and money to do so, is costly for a small business.  

It is evident that staff fluctuations and unpredictability have a far-reaching impact on every aspect of your business.  Small business owners are focused on growing their business, and it can be challenging for them if they keep getting pulled into recruiting and workforce planning activities.  That’s why partnering with an outsourced recruiting resource is the way to go.  

The Benefits of Outsourced Recruiting

The primary benefit of outsourcing your recruitment function is direct access to recruiting professionals and their expertise.  You have the benefit of working with skilled recruitment professionals who can devote their whole time and attention to evaluating and revising your recruitment process to attract more qualified candidates.  They also execute on your improved process to get candidates across the line.  

There is a cost benefit to working with a recruiting process outsourcing firm.  Basically, you aren’t paying any payroll or benefits costs for an external recruiting partner.  You can also flex the agreement based on recruiting need, whereas a full-time internal recruiter is on your payroll, at their full salary,  whether you have one role to fill or fifteen.  

Finally, there is a time savings.  As the small business owner, you’re no longer the one responsible for revising job descriptions, posting jobs and scheduling interviews.  Your outsourced recruiting team will do that all for you, including you only in the process if an absolute necessity.  They also manage the rest of the workforce and ensure a time efficient interview process, giving direction to internal team members who are responsible for interviewing and making hiring decisions.  

Experience in Finding Qualified Candidates

HR firms who specialize in recruitment process outsourcing have direct, practical experience in finding the right candidates for your open roles.  They bring their “back end” experience in job description development and interview process creation but also leverage their knowledge to manage candidate relationships effectively.  HR professionals who specialize in RPO stay up to date on current hiring trends and job market conditions.  They establish HR best practices in your organization so you can move quickly to hire, but with the data-driven decision making to give you the confidence you are making the correct hire the first time.  

Additionally, outsourced HR firms who specialize in recruitment often have access to tools that you may not be able to afford as a small business, with that cost baked into the engagement cost.  For example, at Red Clover, our clients have access to our LinkedIn Recruiter account as well as SparkHire, a video interviewing tool.  We also train all hiring managers in behavioral interviewing techniques.  All of these tools only enhance our RPO service offering to our small business clients and give us the edge in sourcing and finding qualified candidates.  

Ability to Compete in a Crowded Landscape

As a business owner sucked into recruiting because you don’t have anyone else to do it, can you really remain competitive?  How can you focus on finding the best talent while you’re also being pulled in one hundred other directions in order to grow your business.  You can’t.  Having a devoted resource whose job is to find talent for your business gives you a competitive edge.  In engaging with an RPO partner, their sole purpose is to manage your recruiting process and execute on your hiring needs.  Since that’s their only responsibility, they have the time, energy and resources to focus completely on competing with other employers in a crowded job market to come out and top and hire skilled job seekers for your open roles.  

An outsourced recruiting firm, especially one with expertise in HR consulting, provides strategic guidance and recommends changes to your business practices to enhance employer brand and attract better talent.  For example, if you are not able to provide higher base salary for candidates, a skilled HR partner should have the skills to help you develop an incentive compensation program (that doesn’t break the bank or you salary structures) to get talent across the line.  The right recruiting partner looks at your employee experience holistically, and knows what to tweak or change in order to compete with the “big guys” in the talent market.  

Flexibility and Efficiency

Most retained agreements with outsourced recruiting and HR partners offer flexibility as your recruiting needs ebb and flow.  You may start working with an outsourced partner when you are in hyper growth mode and have ten roles you need to fill immediately.  Once they’ve filled those roles, you may need to fill one or two roles.  Generally, your partner can flex the arrangement and hours spent on your recruiting needs, so the anticipated cost fluctuates appropriately as your needs change.  And, an outsourced partner is able to pivot pretty quickly if you have an unexpected vacancy that’s critical to fill.  Or, if you move into a new vertical or need to hire individuals with new skills you haven’t hire for before, your outsourced recruiting team can devote their time, energy and resources efficiently to move quickly through establishing and executing on your new recruitment strategy and process. 

Outsourced Recruiting May Serve Your Small Business

Red Clover has practical experience in helping small businesses overcome recruitment challenges through our RPO offering.  We own your recruiting and manage the hiring lifecycle from start to finish, integrating your managers into our proven process.  We review job descriptions, develop entire question sets for roles, train managers in interview best practices, and navigate candidate relationships – all in service of finding the best candidate for your company.  And we do it all as part of your retained agreement with us.  We do not charge an additional markup based on base salary for every candidate we hire for you.  Our motivation is helping you find the right people to scale your business, not a commission.  And, as an HR consulting firm, we ensure a smooth transition from hiring to onboarding, because we have the knowledge, skills and expertise to build out your entire employee lifecycle and develop all your HR processes.  If you’re ready to see the benefits of partnering with HR experts in outsourced recruiting, reach out today.

Photo Credit – Photo by Christina @ on Unsplash

Related Articles

Above Footer Form

Fill out the form and one of our representatives will contact you within one business day.

  • This field is for validation purposes and should be left unchanged.

For News and Events

Sign Up For News and Insights on HR, Change Management and Strategies.

  • This field is for validation purposes and should be left unchanged.
Skip to content