What To Know About Outsourcing Talent Acquisition

An organization’s talent acquisition strategy and process can have a significant impact on the company’s ability to attract and engage qualified talent. In today’s evolving and competitive job market, more organizations are seeking added support and improving their talent acquisition efforts by outsourcing talent acquisition.

Outsourcing talent acquisition is an alternative staffing solution that typically involves engaging an external expert, agency, platform, or other third party to complete certain tasks or oversee the entire talent acquisition process. Understanding key benefits, challenges, legal and ethical considerations, and best practices to choose the right partner can help you determine whether outsourcing talent acquisition may be the right solution for your organization.

If your team is already in the process of exploring options to outsource talent acquisition, skilled independent talent acquisition professionals are available on Upwork. Experienced professionals can help write job descriptions, source qualified candidates, conduct effective job interviews, and support other talent acquisition needs.

Benefits of outsourcing talent acquisition

According to a survey of more than 500 business and technology leaders conducted by Deloitte, 50% of respondents identify talent acquisition as a top internal challenge in meeting their organizations’ strategic priorities. Outsourcing talent acquisition to an experienced independent professional or agency can help organizations build impactful teams and increase the likelihood of achieving critical business objectives.

Some of the benefits of outsourcing talent acquisition include:

• An expanded talent pool. External talent acquisition partners often have extensive networks of top talent and use advanced talent sourcing tools to identify and attract candidates from across various channels.
• Access to specialized skills. Some talent acquisition consultants or agencies specialize in a specific industry or skill set and can help organizations engage talent with niche or in-demand skills. For example, an agency may focus specifically on developer and related technology roles or target senior leaders for executive roles.  
• Fresh insights and perspectives. If your organization is falling short of your talent acquisition goals, partnering with an external resource can bring new ideas and perspectives to your team. For instance, a consultant may have sourcing channels, talent assessment tools, or candidate engagement best practices in mind that your team may not have previously considered.
• Decreased costs. Outsourcing talent acquisition can decrease hiring costs in a few ways. Engaging an independent professional on a project basis can be more cost-effective than hiring a full-time talent acquisition manager. And an external partner may also identify ways to streamline your overall hiring time or optimize your talent sourcing budget to drive cost savings.
• More efficient hiring. Similar to decreasing costs, outsourcing talent acquisition can also help your team follow a more efficient hiring process. An external partner can free up your recruiting team’s time and ensure the best talent quickly moves forward with the hiring process. The right partner may also have experience in agile recruiting or a similar approach to help your organization drive hiring efficiencies.

When to outsource talent acquisition

Organizations may outsource talent acquisition for a number of reasons. Specific uses depend on overall talent acquisition needs and business objectives.

Instances in which an organization may outsource talent acquisition include:  

• Engaging a talent acquisition expert, platform, or agency when the organization doesn’t have a dedicated internal talent acquisition resource
• Supplementing the internal HR and talent acquisition department when the team has limited bandwidth, to help the organization scale
• Navigating strategic workforce changes, such as mergers, acquisitions, and restructuring
• Identifying ways to improve the talent acquisition process and candidate experience by partnering with a dedicated expert
• Reaching an expanded talent pool or accessing specialized talent from the outsourcing partner’s network, such as leadership candidates through an executive search firm
• Addressing challenges related to a lack of applicants or qualified candidates for a specific role
• Supporting high-volume hiring needs, such as seasonal hiring or staffing a new office
• Engaging talent for short-term or project-based work
• Focusing internal resources and hiring managers’ time on prescreened and qualified talent, rather than sourcing and reviewing all prospective workers

Choosing the right outsourcing partner

Selecting a proven, experienced outsourcing partner can help your organization achieve talent acquisition goals and engage quality candidates to support broader business objectives. Effectively vetting talent acquisition outsourcing partners requires thoughtful consideration.  

Consider the following questions as you evaluate potential outsourcing partners:

• What is the talent acquisition expert or agency’s focus area?
• Which specific services does the potential outsourcing partner offer?
• How skilled and diverse is the available talent pool?
• How much experience does the prospective agency have with filling roles in your industry or aligned with your skill requirements?
• What is the independent professional or agency’s pricing structures and how well do the costs align with your budget?
• Can the potential outsourcing partner tailor service offerings or pricing based on your organization’s business requirements?
• What is the estimated or promised timeline for filling open roles or projects?
• Based on client and talent reviews, does the individual or agency have a positive reputation?
• How will partnering with this outsourcing resource improve or add value to your current talent acquisition process?
• How does the potential partner maintain compliance with employment law and ethical standards?

Overcoming common challenges in outsourcing

While outsourcing recruitment and talent acquisition offers several benefits, any talent acquisition solution also presents some challenges. Understanding key challenges before initiating an outsourcing partnership can help you be better prepared to proactively address any potential roadblocks.

Steeper learning curve

Any partner outside your internal talent acquisition team will require adequate ramp-up time. Because they’re outside your organization, getting up to speed on your company background information, employer brand, and internal processes may take longer than in-house recruitment team members.

To address this challenge, share an overview of your organization’s mission, values, and vision, and ensure specific talent acquisition goals are clearly defined from the start. Provide a specific internal point of contact to respond to any background questions that arise.

Communication barriers

Effective communication can ensure you receive timely updates from external talent acquisition partners and stay on track with hiring goals. However, if an external partner isn’t aware of your preferred communication methods, this can slow down your talent acquisition process.

Consider outlining and sharing virtual communication best practices with any external partners. This may include the cadence at which you’d like to receive updates, a list of your team’s communication tools, and which tools should be used for certain updates. For example, you may schedule meetings each time you initiate the talent acquisition process for a new role, while a direct message may be more efficient for quick questions and updates.

Less control over the process

When an independent talent acquisition professional or agency sources and screens candidates on behalf of your organization, your team isn’t as involved in the decision-making process at each step.

Even if you’ve thoroughly vetted a talent acquisition partner, have a member of your internal team conduct a final interview and make a hiring decision. This approach can save time on initial hiring steps while ensuring your team selects the most qualified individual for each open position or project before making commitments.

Intellectual property and security concerns

Enlisting the support of an external agency or talent acquisition expert poses a risk of your intellectual property or trade secrets being exposed outside your organization — including to competitors. You may also share passwords or grant access to email, talent acquisition software, and shared drives with outsourced help.

When you initiate contracts with outsourced talent, consider requiring partners to sign a nondisclosure agreement and other security-related paperwork before they have access to your system and begin projects.

Increased costs

Some outsourcing options, such as engaging an independent professional, can be more cost-effective than adding a full-time internal talent acquisition worker to your team. However, others, such as partnering with a recruitment agency for recruitment process outsourcing (RPO), may be costly. Pricing models vary by recruitment agency, but typically include a finder’s fee and a certain percentage of each worker’s pay rate for a stated period.

When evaluating different outsourcing solutions, take overall costs and potential return on investment (ROI) for each into consideration.

Legal and ethical considerations

Whether you’re partnering with an independent talent acquisition expert or outsourcing your talent acquisition efforts to an agency or other third party, each time you engage a new worker for your organization, complying with employment laws and maintaining ethical standards is critical.

Here are some legal and ethical considerations to keep in mind when outsourcing talent acquisition:

• Compliance with labor laws. Specific labor laws vary by jurisdiction. In the United States, organizations are required to comply with the Fair Labor Standards Act (FLSA) defining minimum wage and overtime standards, Equal Employment Opportunity Commission (EEOC) anti-discrimination laws, and Occupational Safety and Health Administration (OSHA) workplace safety laws. When evaluating different talent acquisition partners, ask what their process is for tracking the latest legal updates and maintaining compliance.
• Worker classification. Whether you’re partnering with an independent talent acquisition specialist or engaging an agency to help you fill open positions, proper worker classification is essential to avoiding penalties and other legal issues. For example, if your organization or outsourcing partner misclassifies an in-house worker as an independent contractor, the individual may be entitled to back pay and benefits. Each time you open a new role or project, make sure your external talent acquisition partner is aware of how the individual will be classified.
• Defined contract terms. Each time you engage a new worker for your team, contract terms between your company and the worker should be clearly spelled out in writing and address all relevant legal issues. Contract terms may include but aren’t limited to the scope of work, working hours, compensation timing and structure (such as salaried, hourly, or project-based), benefits, confidentiality and noncompete clauses, and termination and notice periods.

Measuring the success of outsourcing efforts

Measuring the effectiveness of recruitment and talent acquisition efforts is essential to supporting an engaging candidate experience, building a team of high-performing workers, optimizing recruitment costs, and identifying ongoing improvements.

If your organization outsources talent acquisition, proactively tracking metrics can also help your team compare different outsourcing solutions and your internal talent acquisition efforts. Use the data to determine what’s working and what’s not. Leveraging this information, you can make data-driven decisions about investing more in outsourcing solutions that drive impactful results and eliminate solutions that lead to few qualified applicants or hires.

Many technology solutions can help your organization track critical recruitment and talent acquisition metrics and identify insights and trends over time. Available options include applicant tracking systems, AI-powered recruitment tools, talent management software, and human resources information systems.

Important metrics to track include:

• Total number of applicants
• Percentage of qualified applicants
• Cost per qualified applicant
• Time spent in each hiring step
• Time to hire
• Cost per hire
• Sourcing tool and channel performance
• Candidate drop-off rate
• Offer acceptance rate
• Candidate satisfaction rating
• Worker retention rate
• Worker engagement rate
• Quality of hires

Access talent on Upwork

Business needs and in-demand skills frequently shift; meanwhile the job market remains competitive. An effective talent acquisition and recruitment strategy can help your organization engage workers with the skills you need to better adapt to change. Outsourcing talent acquisition to an independent professional or agency can help your team maximize the impact of your talent acquisition efforts while freeing up time for your internal team.

Experienced independent talent acquisition professionals are available to help your team meet talent acquisition goals. Through Project Catalog™, search one-on-one consultations and fixed-price projects based on your specific talent acquisition needs and get started right away. Browse available talent acquisition and recruiting projects now.

To more efficiently fill skill gaps, scale your team up and down as needed and meet strategic talent acquisition objectives, consider engaging independent talent from Upwork. Through Talent Marketplace™, access highly skilled, diverse independent professionals. Find qualified talent with more than 10,000 skills across artificial intelligence, technology, design, marketing, administrative support, accounting, and many more specialties.

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This article is intended for educational purposes and should not be viewed as legal or tax advice. Please consult a professional to find the solution that best fits your situation.