Outsource Hiring Vs Recruit In-House

For decades, hiring has been Achilles’ heel of digital product outsourcing. Before everything else comes team building. To build a team you need a steady supply of professionals. Finding the right people to join your team is a challenge that a lot of teams struggle with. The following is the story of our hiring, our bumps and bruises with recruitment, and how we’ve come to a full-blown HR department in a company that is all standing up for outsourcing.

What makes IT hiring special?

Digital production is a unicorn. You can outsource the shit out of it and have outstanding products built for you for just a fraction of the budget you would’ve spent on an in-house team. However, if you don’t hit home right away, you risk flushing down all your money working with the wrong people on the products that won’t matter.  You can’t swap tech teams either.

Building a coherent development squad is a task for years, a trail of trial and error …and a broken heart more times than not.

It takes a lot of effort from a specialist to become one so it’s no surprise they are not willing to sell themselves cheap. Now imagine having a full team of these around. Yet a company is its people. People make this business exciting.

We are aspiring innovators, dreamers, opinionated geeks, technical geniuses, creative visionaries, and just regular folks with unusual skills. We tend to gravitate towards one another but we always keep our distance. We live online and we build the online. We get along with huge communities and yet, we can be the most socially awkward person you’ve ever met. We stand behind our skills and we are always hungry for new ones. We are programmers, developers, engineers, coders, scripters, UI developers, creative coders, and computer scientists. Thought these are all the same? Take a look.

There is no bread pen for a good developer, thus there’s no formal criteria for how to determine a good developer internationally.

This doesn’t mean you can’t hunt and recruit a brilliant software engineer remotely, instead, it gives you a perspective on how subtle this art is.

Our Wild West hiring story

For over 10 years we’ve practiced intuitive hiring. We did it willy-nilly, occasionally stumbling upon great people, having creative minds come to us on their own, and basically did not pay much attention to human resources. Why would you if your CEO is a great leader and takes care of all the employee stuff personally?

Do you find yourself hiring people because they seemed cool or because they are too good to let go off? Or maybe you hire a person you can’t really afford? Rejoice, you’re Wild West hiring.

The state of chaotic hiring means you have a sufficient team to support the business and progress further but you are always open for better team members because maybe your front-end team could have a little assistance or your design team could use a designer for your website that needs a tweak but there are no spare people, etc. This makes you feel like you are doing okay but at the same time, there is this low-level personnel search going on, squeezing you dry one drop at a time.

Hiring randomly is cheap. You don’t need to support a department. You can delegate some task to a freelancer or a contractor. Those, however, can’t be important tasks as you don’t get exclusiveness when working in a project-based framework. There might be some fluctuations with terms and deadlines, but hey nothing big because important tasks are on the core team. Doesn’t sound that bad, right?

Eventually, this approach (or the lack of one) came to hit us on the head big time. We scored a number of huge projects in FinTech, CG art, eSport, commerce, and a bunch of mobile app projects.

The team’s workload quickly overwhelmed their ability to switch to new projects. And new projects kept coming.

Accepting them would’ve meant diluting the quality of the current products and not performing to the best of our abilities in the new projects. And when we tried to quickly fill the employment gaps, we failed. The no-HR policy had to end and that got to the main question: do we hire an in-house recruiter or outsource it?

Recruitment process outsourcing (RPO)

“RPO is a form of business process outsourcing where an employer transfers all or part of its recruitment processes to an external provider. Recruitment Project and Process Outsourcing providers can manage the entire recruiting/hiring process, or can manage one or two aspects of the process, essentially serving as an extension of the company’s human resources department.”

Outsourcing recruitment came as an alternative solution for the companies with a large volume of employees and the revolving door problem. Indeed, the outsourced HRs know what they are doing in terms of where to find candidates, how to screen them, which questions to ask. All of these based off of the hiring science and psychology.

The results of the RPO strategy are likely to beat occasional and sporadic hiring. In a lot of cases due to one of the following characteristics of RPO:

  • Cost saving. No need to extrapolate. Like any other outsourcing, RPO reduces costs.
  • No distraction. Often times, team leads and even higher executives have to find time in their schedule to either interview or approve a potential employee. RPO helps avoid this simply by putting a candidate through the whole procedure without drawing external team members.
  • Scalability. Whether you are looking for a backend RoR developer or trying to pack an entirely new department, RPO can provide candidates for anything because of their methodic scaling capabilities.
  • Time limits. Having a specialist working on your hiring 40 hours a week can improve the speed of your hiring, which means your projects will be done on time.
  • Analytics. Screening a large number of candidates can be beneficial if you are trying to analyze how attractive your company is for the potential employees, compare your rates with other’s metrics and perhaps, fix something. RPO offers professionals in that realm.

In-house recruiters

As mentioned above, IT hiring is special. When I first applied for a tech writer position at an international software development company, it took me about a month and 4 interviews (3 personal and 1 conference call) to finally get approved for a probationary period. I passed the trial and got accepted and promoted in the next two years. I’m convinced it was the company’s recruitment policy that managed to significantly cut the attrition rate.

Could this have been achieved via RPO? Probably, if the outsourced HR had the experience and a lot of general knowledge about the specific niche they’ve been hired to hire for. But even in the digital product development, there are levels and modalities that only reveal themselves within the industry. Particularly, you’d have to work on real projects with other people to know how things are. RPO serves a wide variety of businesses and industries. Outsourced hiring companies are like Swiss army knives, fit for a lot of things, but nothing in particular for the most part. This discrepancy shines best in our business which is web & mobile design and development. This sets a specific task for hiring which RPO agencies might not be realizing.

We are sort of in the twilight zone between technicality and aesthetics. We serve businesses while at the same time, appealing to the customer.

Why we set up our own HR

Given the specific timeframes and budgets, it’s our responsibility to deliver products at any cost. We cut the slack on every level of our business operation, yet we don’t pay enough attention to the workforce of our business – the people.

This results in hiring come-and-go people and wasting time on incompetent employees. We might believe that the problem is in the candidates when it’s the RPO service that gives us a bad rep by asking the wrong questions or screening the people they don’t recognize inappropriate right away. So, perhaps, it’s the outsourcing part that is compromised in our very case?

Are we losing money while also losing the opportunity to hire best talents because they don’t get recognized? How come all our best employees had been hunted by the CEO or CTO and not recruiters?

All those assumptions got us to the point where we decided it was the time for a bold move. We estimated the time and money we’d have to invest in RPO, the cost of projects we’d have to turn down, the cost of a good HR to join us, and the costs of building own HR team in house. We compared the speculative results and realized, it made much more sense to hire a team of junior recruiters and train them exclusively for our needs so that they won’t waste energy in the wrong directions and be business-specific rather than industry-familiar.

The nurturing process is quite a long one, but luckily there are numerous materials and strategies out there to help recruiters develop their skills. First off, we gave them extensive background knowledge of the business we are in and the company we’ve built. We had them study the methodologies we use, the projects, the backlogs of our development, had them communicate with the teams to get the feel of the collective.

Having the technical knowledge about everything we do is important, but feeling the vibe of the team, being a part of it is what has really allowed them to unfold and start bringing tangible results.

Within the next 6 months, we managed to fill the slots in our junior back-end team, front-end department, and QA team. We are still working to develop an approach to hiring UI/UX designers but we are getting there. So with all the above, our choice is in-house recruitment with deep customization of the HR team.

Outsource Hiring Vs Recruit In-House | Shakuro

From Shakuro