Look how many new great technical solutions and products were created for recruitment departments in the past 5 years. We have access to as much as 90% of professionals via Linkedin, Xing, and other social networks. A job application is done with a single click. Modern applicant tracking systems allow all communications, tracking and reporting to be done automatically.
But has recruitment become any easier?
In many ways it did, but the new era brought new challenges, as well. I will mention only a few of them that in my opinion require the most of the recruitment manager’s resources: overload of unqualified applicants and the need for active engagement with candidates (OR active search). On top of that come topics like employee brand management, employee retention and PR. Companies that are competing for scarce talent in the digital industry are the most affected by these challenges across all modern and emerging economies.
All that leads to the growing need for trained recruiters and sourcers (for those new to the topic, a sourcer is responsible for finding and contacting people on social media).
There are three main approaches to the organization of recruitment:
- Keep a small team of internal recruiters and work heavily with recruitment agencies that do most of the active sourcing. The problem with relying too much on external agencies, that work to a large extent on a success fee basis, is that the fee should be high enough to justify the risk that agencies take of not making a placement. Filling all the vacancies with agencies may become costly for some companies.
- Hire an internal recruitment team that will not only work with incoming candidates but also will do active sourcing. The average salary of an in-house recruiter in Germany is between 40.000 and 65.000 EUR, so if you are a company owner it will be 50.000–77.000 EUR with the taxes. Not all companies can afford to have a team of internal recruiters. Additionally, you need to keep in mind that it is hard to find a good recruiter and many good recruiters prefer to work in an agency or as a freelancer, because their compensation is not capped and in a good month they can double or triple their salaries. You can read a good summary in the article Internal Recruitment vs. Working with an agency by my colleague Natalya Yarkova.
- Outsource your recruitment to a 3d party. The standard term for this is RPO (Recruitment Process Outsourcing). This option is often used by big industrial companies and is not cheap, due to the 20–30% markup the company would have to pay to the RPO providers on top of the fixed salary of the recruiters.
- New Option!!! Hire a remote recruitment team which is basically working with people that are physically located in countries with more favorable salary rates. This model is not new but we notice that it doesn’t have the attention it deserves. Therefore, below I put some of my thoughts on remote recruitment.
Photo by Marvin Meyer
Why consider having a remote recruitment team at all?
- Significant savings and flexibility
The average salary of a recruiter in emerging markets lays between 900–2000 EUR per month depending on experience, language skills and abilities. Since most of the remote employees are working as freelancers, you will have a B2B contract that gives you certain flexibility compared to hiring a person as an employee.
- Abundance of qualified recruiters
Many developing countries have very strong IT markets with plenty of companies developing their own product, as well as providing development outsourcing and outstaffing services (e.g. Ukraine, Russia, Romania, Brazil, Argentina, Nigeria). Competition for tech talent in those markets creates a good environment for growing recruiters who understand tech and have experience in actual hard-core headhunting. Many products for technical recruitment such as Amazing Hiring, different Linkedin Plugins are coming, for example, from Ukraine and Russia.
- Language barriers are falling
The new generation speaks good English and often a second foreign language such as German and French. Even if the recruiter does not speak the local language of your country, e.g. German, the technology and automatically translated internet pages make the work of a recruiter much easier.
Where to start?
Since it is common nowadays to give ready to use instructions, I laid out a short plan:
- Understand your needs and tasks that can be allocated to the remote recruiter:
– Taking care of job posts and incoming applications
– Do active sourcing and headhunting
– Conduct market and competitor research through recruitment angle
- Understand your budget. I would definitely allocate some part of it to the performance-based bonuses.
- Communication is the key. Create an onboarding for your remote recruiters. Remember that the more information about your internal kitchen you share the easier it will be for a recruiter to find the best matching candidate not only in terms of skills but also in terms of personality.
- Understand the terms. Even if you will be working with someone under the B2B agreement it does not mean that the remote employee will not feel herself being a part of your team. Finalize all the commitments of parties in advance and keep in mind that the terms will influence how comfortable and dedicated the remote employee will work for you.
- Don’t forget that the remote employee may have good and bad days and human interaction is even more important for someone working from home. So a virtual coffee break now and then to talk about life is always a good thing!
Hiring directly or via an agency*?
*Via an agency would mean that an agency takes care of all the pain around building a remote team such as hiring, managing, training, motivating, laying off.
- More control over your hires. Thanks to the dedicated platforms such as Upwork, Linkedin or local job boards you can easily let the world know that you are looking for a remote employee
- You can give the remote employee the perks that your in-house employees usually get
- No agency fees
- The hiring process can be tedious
For example, we received 300 applications within 3 days after posting our remote job opening in Brazil, only about 30 applicants were anyhow connected to the HR industry
- Managing an employee would require the manager’s time
Working with an agency
- Specialization of an agency saves your time
- Agency takes care of hiring, managing, training and everything else
For example, a recruiter suddenly falls sick in the middle of an important project or you are not happy with the recruiter’s performance, the agency will take care of a replacement
- Flexibility. Your recruitment is on hold, you don’t have to worry about leaving a team member without a job, the agency will find for her/him a new project
- Straight forward legal relationships where you pay the agency and the agency takes care of how the recruiter is paid and under what contract she works
- Alignment of interests. The agency is interested in long-term cooperation with their clients, therefore, a good agency will make sure the level of service and quality of work of the remote team stays on a good level
- Agency will charge fees, although they may be offset by the time you saved not doing all the admin work. Don’t forget the cost of an hour of your work
If you have never considered having an external remote team, I would recommend you take a piece of paper or open an Excel table and write all pros and cons for your organization, run some numbers, it should make the whole picture a bit more clear. In the end, the question of in-house versus outsourced is as old as the business world and valid also in 2020. With half of the world working remotely during past months, the business owners and managers had a good chance to taste the flavor of things being done from home.
Cost comparison of recruitment services in Germany