In-house vs agency recruitment: Which one should I choose?

Hiring the right talent is one of a business's most important decisions. However, when it comes to recruitment, one key question remains: Should I rely on my in-house recruitment team or work with a recruitment agency? 

At first glance, handling recruitment in-house may seem like the easier option - your HR team knows your company values, corporate culture, and hiring needs. For recurring roles or low hiring volumes, this approach can be highly effective.

But what about hard-to-fill roles, leadership positions, or urgent hiring needs? Internal teams often face limitations—whether it’s a lack of time, resources, or access to a broader talent pool. That’s where external recruiters step in, bringing deep industry expertise and a network of high-calibre candidates. 

So, which approach delivers the best results? And how do they compare in terms of cost, efficiency, and long-term hiring success? 

Let’s break it down. 

What's the difference between in-house recruitment and a recruitment agency?

Before deciding which recruitment method is right for your business, it’s important to understand the fundamental differences between in-house and agency recruitment. 

• In-house recruitment: This refers to filling roles using your company's own HR or talent acquisition team. It involves sourcing candidates through internal promotions, employee referrals, or direct applications from job postings. Internal teams are responsible for screening, interviewing, and selecting candidates, all while balancing other HR responsibilities.
• Agency recruitment: This involves partnering with a third-party recruitment agency to source, assess, and place candidates. External recruiters leverage their industry networks, headhunting strategies, and specialised research teams to find top talent, including passive candidates who aren’t actively job searching.
  

Cost comparison: which recruitment model is a better fit for your budget?

Cost is often a deciding factor when deciding between in-house recruitment and external recruiters, but the real question is: which option delivers the best return on investment? 

The cost of in-house recruitment

At first glance, in-house hiring may seem more cost-effective since it avoids agency fees. However, maintaining an in-house recruitment team comes with ongoing expenses, including: 

• Salaries and benefits for in-house recruitment teams and HR staff
• Job board subscriptions and recruitment software expenses
• Training and development for in-house hiring specialists
• Lost productivity when HR teams are stretched between recruitment and other responsibilities

For businesses with continuous hiring needs, in-house recruitment can be a cost-effective long-term strategy. However, for hard-to-fill roles, urgent hires, or industries with talent shortages, internal teams may struggle to attract top talent—leading to longer hiring times and higher costs in the long run. 

The cost of external recruitment

External recruiters typically charge a fee based on a percentage of the hired candidate’s salary. While this upfront cost may seem higher, it covers: 

• Specialised industry expertise and market insights
• Access to passive candidates and exclusive talent networks
• A faster, more efficient hiring process
• Reduced risk of a bad hire, saving long-term costs
  
  

Another key scenario where external recruitment agencies add value is during periods of high-volume hiring. When companies experience an unexpected surge in vacant positions, relying solely on their own talent acquisition team may not be the most efficient or cost-effective solution, especially if the increase in hiring demand is temporary.

Instead of bringing on additional staff for a short-term need, businesses can leverage external recruiting firms to scale efforts quickly, access a wider talent pool, and ensure a streamlined hiring process without long-term overhead costs.

For urgent, niche, or senior-level positions, external recruiters can justify their cost by delivering higher-quality candidates, reducing hiring time, and preventing costly turnover

Firaz Hameed - Recruitment Director at Airswift

Preventing turnover is one of the most critical factors in controlling hiring costs. A bad hire—especially in leadership roles—can be incredibly expensive, impacting finances and team productivity. Choosing the right internal or external hire from the start ensures better employee retention, lower hiring costs, and a more engaged workforce.

For roles that require specialised skill sets or leadership experience, making an informed hiring decision can be the difference between long-term success and ongoing disruptions. By focusing on career paths and selecting candidates who align with your corporate culture and long-term goals, businesses can set themselves up for long-term success. 

Can in-house teams and external recruiters work together?

The answer is a resounding yes—and in many cases, combining the strengths of your in-house recruiters and recruitment agency often delivers the best hiring results. 

Firaz Hameed, Recruiting Director at Airswift, strongly supports this hybrid approach: 

 “For me, an external recruiter supplements the internal team. We are there to add value and bring candidates not readily available through the normal channels. We aim to map out the market and find the best candidate to do the job.”  

By working together, internal and external recruitment efforts can tap into active and passive talent pools, resulting in a more comprehensive and strategic hiring process.  

• Internal teams ensure the cultural fit, values and long-term workforce planning. 

• External recruiters bring fresh market insights, access to niche talent and expertise in sourcing hard-to-find candidates. 

Which option is the right one for your business?

An in-house recruitment process can be a cost-effective and sustainable option for filling internal roles, building long-term talent pipelines, or reinforcing company values and corporate culture.

However, an external recruitment partner brings specialist expertise, broader talent access, and faster hiring solutions for hard-to-fill roles, senior leadership positions, or urgent hiring needs.

With their industry insights and deep networks, external recruiters can help secure top-tier talent, reducing time-to-hire and minimising costly turnover. 

Contact us to find the best talent solutions for your business.