Recruiting new employees is one of, if not the, biggest challenges you’ll face when scaling your business. It’s time-consuming and expensive. And that’s precisely why more companies are choosing to outsource recruiting entirely.
In this post, we’ll break down exactly what that means, the reasons many choose it in the first place, and the different models you can choose. We’ll also cover the step-by-step outsourcing process, the key benefits, and how to choose the right partner to ensure the best fit for your business.
Take The Complexity Out of Recruiting
Let 1840 & Company help you attract the right people, strengthen your team, and achieve lasting business success. Schedule your consultation today!
What Does It Mean to Outsource Your Recruiting?
Outsourcing your recruiting efforts means collaborating with an external firm that handles some or all aspects of the recruitment process.
This can include sourcing candidates, screening, interviewing, placements, and even handling contracts or payroll. Many of our clients also outsource recruitment to gain recruiting expertise, access broader talent pools, and reduce costs, all while focusing on their core business functions.
Keep in mind, though, that outsourcing does not mean handing over complete control.
Recruitment Process Outsourcing (RPO), for example, is designed to form partnerships with recruitment firms, so you remain closely involved in the decision-making process. The goal is not to replace in-house teams but to enhance the process and improve results.
Why Companies Outsource Their Recruiting
More than 65% of enterprises worldwide outsource some or all of their recruitment process, and report up to a 50% reduction in hiring time. Given that companies outsource recruitment for a variety of reasons, below are some of the most popular:
- Cost Efficiency and Savings: Outsourced recruitment reduces costs associated with job postings, background checks, and in-house recruiting staff.
- Faster Time-to-hire: Recruitment firms bring proven methods to attract top talent and improve employer branding.
- Access to Global Talent Pools: Recruiting agencies connect with both active and passive candidates, expanding reach beyond what in-house teams can manage.
- Focus on Business Growth: Outsourcing recruiting frees leadership and HR to concentrate on strategy, culture, and operations, rather than administrative tasks.
- Scalable Recruiting Solutions: Smaller companies use outsourced recruitment to compete for skilled employees against larger competitors.
How Outsourced Recruiting Works in Practice
While models differ, most follow a similar structure. Here’s a snapshot of what you can expect, but for a more detailed breakdown, read our full guide on RPO.
- Discovery: The provider learns about the business, its workforce challenges, and cultural expectations.
- Sourcing: Candidates are identified using advanced technology and recruiter networks.
- Screening: Firms assess skills, communication, and cultural fit to enhance the quality of their hires.
- Shortlisting: Only the most qualified candidates are selected to proceed to client interviews.
- Hiring & Onboarding: Some providers also manage contracts, payroll, and training, especially for international placements.
What Are The Different Ways Companies Can Outsource Recruiting?
There are several models of outsourced recruiting, each offering several benefits. Evaluate these against your needs to find the best fit:
Recruitment Process Outsourcing (RPO)
RPO is a long-term partnership where a recruiting firm manages part or all of the recruitment process. This is all about building relationships with a trusted partner who can deliver consistent results.
RPO can be as small as helping with a single position or as large as managing an ongoing stream of new hires. Most businesses use RPO to improve hiring quality, reduce costs, and make their recruiting process more scalable.
Direct Hire & Executive Search
For specialized roles or leadership positions, many companies turn to direct hire or executive search. In this model, a recruitment firm leverages its network and recruiting expertise to identify top talent that may not be actively applying for jobs.
This is particularly valuable when seeking the right individuals for senior positions, where cultural fit and discretion are crucial.
Staffing Agencies & Temp Placement
Staffing agencies are often utilized when companies require temporary workers, seasonal assistance, or contract employees. These firms handle not only sourcing but also employment administration, reducing the burden on in-house teams.
Smaller companies especially benefit from staffing agencies when they face sudden spikes in recruiting needs but don’t want to take on long-term hiring costs.
Offshore & Nearshore Recruiting
Many companies outsource recruitment internationally to access qualified talent at lower costs. Offshore recruiting often focuses on roles in IT, finance, or customer service, while nearshore recruiting provides a closer time zone match.
This model helps organizations compete with larger firms by giving them access to wider candidate pools while maintaining cost efficiency.
Employer of Record (EOR) Services
An EOR is an outside firm that legally employs candidates on your behalf in other countries. They handle payroll, compliance, and onboarding, so your organization doesn’t have to establish local entities.
This model is ideal for companies seeking to expand globally without incurring the legal and administrative complexities associated with international operations.
Hybrid Models
Hybrid approaches combine in-house recruiting with outsourced support. A company may outsource candidate sourcing and background checks while keeping interviews and final hiring decisions in-house.
Hybrid models offer flexibility, enabling businesses to maintain control over key aspects of recruitment while leveraging external resources.
Matching Outsourcing Models to Business Situations
Once you’ve decided which recruitment model you’re ready to move ahead with, let’s break down the model-by-business application:
- Startups & Scaleups (10–500 employees): Often lack resources or a full HR team. Outsourcing recruiting helps them compete for top talent without overspending.
- Mid-market Companies (200–1,000+ employees): Already have HR but may need an RPO partner to handle overflow during periods of growth or high turnover.
- Enterprises (1,000+ employees): Typically use full RPO and EOR for consistent global recruitment and workforce compliance.
- Specialized or Executive Roles: Executive search is best when an organization needs the right people for high-impact positions.
- High-volume Hiring: RPO and staffing agencies are effective when seeking large numbers of new hires quickly.
How to Choose the Right Outsourcing Partner
Finding the right recruitment partner is about building long-term relationships that will strengthen your workforce. Here’s a step-by-step way to decide:
- Clarify your recruiting needs: Determine whether you require assistance with specialized roles, high-volume hiring, or ongoing recruitment process management.
- Evaluate recruiting expertise: Look for recruitment firms with proven experience in your industry and a strong track record of attracting top talent. Ask how they source candidates, handle new hires, and improve employer branding.
- Assess cultural alignment: A good fit goes beyond skills. The firm should understand your company culture so that the candidates they bring are not only qualified but also the right people for your team.
- Understand their process and technology: The best providers utilize structured processes, advanced tools, and data-driven insights to enhance their results. Ask how they screen candidates, manage costs, and adapt to future recruiting needs.
- Check communication and relationships: Outsourcing recruiting requires collaboration. Make sure your partner prioritizes clear communication and treats the engagement as a partnership with shared goals, not just a transaction.
FAQs About Recruitment Outsourcing
Before we finish this quick dive into outsourcing your recruitment operations, let’s take a few minutes to answer some popular questions about the topic.
What HR Activities Are Often Outsourced?
Commonly outsourced HR activities include recruiting, payroll, employee training, compliance management, benefits administration, onboarding, and performance management, allowing companies to reduce costs and focus on core business functions.
Who Is an Outsourcing Company?
An outsourcing company is a firm that provides specialized services, such as recruiting, payroll, or customer support, so businesses can reduce costs and focus on core operations.
What Does KPO Stand for?
KPO stands for Knowledge Process Outsourcing, a form of outsourcing where businesses delegate high-value, knowledge-based tasks such as research, data analysis, financial services, and strategic consulting to external experts or specialized firms.
Final Thoughts
Recruiting new employees is both vital and challenging.
High turnover, limited resources, and the constant demand for candidates make it difficult to keep up. Outsourced recruiting offers a solution: a way to access expertise, attract top talent, and build stronger teams while containing costs.
Whether you are a startup seeking rapid growth, a mid-market organization managing seasonal spikes, or an enterprise expanding globally, outsourcing recruitment provides flexibility, quality, and long-term benefits.
By selecting the right partner and fostering relationships that align with their company culture, businesses can attract the right talent, enhance their workforce, and position themselves for long-term success.
Ready to explore outsourcing recruitment for your organization? Contact 1840 & Company today to learn how we can connect you with top talent worldwide and streamline your recruitment process. Schedule your consultation here.