Choosing Your Recruiting Strategy: In-house, Agency, Freelancer, or RPO

Your business is growing and the future looks exciting. But growth comes with new challenges like defining your recruitment strategy. How do you find the right talent to fuel your company’s next chapter?

Like every good decision, it starts with understanding your options, and their pros and cons. 

I’ll break down the basics of in-house, agency, freelance recruitment, and RPO along with their pros and cons to help you decide which recruitment strategy fits your needs. 

Here’s what we’ll cover in this post:

• Comparing internal and external recruiting
• DIY recruiting
• In-house recruiting
• Recruitment agencies
• Freelance recruiters
• RPO
• Key takeaways (aka What to choose)

Internal vs external recruiting 

Recruitment strategies fall into two categories: internal (e.g. in-house teams or DIY recruiting) and external (e.g. agencies or freelance recruiters). Let's take look at their key differences before diving into each recruitment method.

Scope of responsibilities

• In-house recruiters handle the entire hiring process, from planning the positions with hiring managers to finalizing job offers.
• External recruiters can do full-cycle recruitment or focus on specific tasks, such as sourcing or shortlisting top candidates for a role.

Skills and expertise 

• In-house recruiters have wider recruitment knowledge so they can tackle various tasks and roles. They have a better understanding of the company’s hiring needs and culture fit.
• External recruiters specialize in different roles or industries, e.g. cybersecurity or sales roles. They have a deeper understanding of skills needed to succeed in a role they specialize in.

Speed vs precision

• In-house recruiters tend to be more thorough because they understand company culture and values. However, the hiring process can be much slower because in-house teams handle all kinds of recruitment-related tasks.
• External recruiters can often fill a role faster thanks to experience in a certain niche and their established network of candidates.

Costs

• In-house recruiters tend to have high costs when you take into account salaries, benefits and training. As a company grows and hiring needs become consistent, this option becomes more cost-effective.
• External recruiters are more flexible but can be pricey, especially with contingency fees. This guide will help you calculate and compare your recruitment costs.

Now that we’ve compared internal and external recruiting, let’s dive deeper into each option.

Do-It-Yourself (DIY) recruiting

Someone (CEO or manager) who is not a recruiter is responsible for recruiting, without the support of a recruiter or an HR person.

This is when team leaders or managers take charge of hiring without dedicated recruitment support. It’s common in startups and small businesses with tight budgets or occasional hiring needs. Hiring by yourself is possible if you don’t have many roles and you have a strong network of potential candidates.

Pros:

✔️ No need to pay external recruiters or agencies.
✔️ It can be a quick process for small-scale hiring needs.

Cons:

❌ Busy managers will have to spend a lot of time recruiting instead of focusing on their core function.
❌ You might lack expertise in sourcing and evaluating candidates.
❌ The talent pool is often limited, and the candidates might not be the best fit for the role or company.

In-house recruiting team

Recruiters who are full-time members of your team.

It could be a team, a single recruiter or an HR person who takes on recruiting tasks. In-house recruiters usually have general know-how for handling all kinds of vacant positions. As the company grows, you might see more specialization within your recruiting team. For example: recruiters who only do sourcing or recruiters who only hire engineers.

Pros

✔️ You have full control of your talent pool and employer brand.
✔️ In-house teams are adaptive to new projects and tasks as your company grows.
✔️ In-house recruiters have a deep understanding of your company’s culture and values.

Cons

❌ Hiring can be slower because teams have to work on multiple roles or projects at the same time.
❌ Keeping a team on payroll is costly, especially if your hiring needs aren’t consistent.
❌ If your in-house recruiters are generalists, they might struggle with niche roles or hiring in new locations.

Recruitment agencies

External recruiting teams that provide various recruitment services.

Recruitment agencies are external partners that help you find top candidates. They range from global firms like Addeco or Randstad to small boutique agencies focusing on specific industries or roles.  One of the most commonly used services is full-cycle recruiting per position, where the agency manages the entire recruitment process for a specific role. This includes sourcing, screening, and providing a shortlist of top candidates for the position.

Pros

✔️ Agencies have faster hiring times and a ready pool of diverse candidates.
✔️ They have expert know-how and a built network in their niche fields.
✔️ You can hire an agency on an ad hoc basis and scale as needed.

Cons

❌ Agencies can have high fees, especially with the contingency pricing model.
❌ You’ll have limited control over your employer brand.
❌ An agency recruiter might not understand your company culture as well as your employees do.

Freelance recruiters

Contract recruiters are professionals who focus on recruiting talent for specific projects or on a short-term basis.

Freelance recruiters work independently, blending the qualities of in-house recruiters and agencies. They often specialize in niches like tech, sales, or manufacturing. It's not easy to become an independent recruiter, so they typically have a lot of experience in a specific industry and established candidate networks.

If you find a great freelance recruiter, you'll get the best of both worlds: someone who’s dedicated to your team but offers flexibility and specialized skills.

Pros:

✔️ Freelance recruiters are flexible and can adapt to your hiring needs.
✔️ They have deep expertise and strong networks in specific fields, e.g., tech recruitment.
✔️ Freelance recruiters often work with a limited number of clients, allowing them to dedicate time to understanding your company and providing a more personalized approach.
✔️ Most of the time, freelancers are more cost-effective than agencies and in-house employees.

Cons:

❌ Recruiter rates vary widely depending on experience and location.
❌ It can be hard to find qualified recruiters for some countries and industries. (we can help with that 😉).

Recruitment process outsourcing (RPO)

RPO is a flexible recruitment solution where you outsource some or all of your hiring processes to an external partner.

Although it’s typically associated with agencies, RPO can also be handled by experienced freelance recruiters. The main difference between RPO and other external models is that RPO has a fixed monthly fee, making it more predictable and scalable.

Pros:

✔️ Fixed monthly fees make budgeting easier, making RPO more scalable than contingency fees, which increases the total cost with each new hire.
✔️ RPO recruiters are embedded into your team, using your tools and processes. This means you’ll offer consistent candidate experience and have control over your employer brand.
✔️ RPO allows you to scale recruitment efforts up or down based on your needs.

Cons:

❌ Most large RPO agencies use lock-in contracts, limiting flexibility and preventing early cancellation.
❌ Flexibility comes at a higher cost, making RPO more expensive than an in-house recruiter’s salary or a freelance recruiter’s project fee, especially for smaller-scale hiring.

Key takeaways

When to do it yourself (DIY)?

• You’re an early stage company with limited hiring needs.
  Usually, the first 2-20 team members are hired by the management using their own network or more affordable channels such as job boards, social media and job-matching apps.
• You have your own network of potential candidates.
  You have a network that you can easily reach. For example, you're an established marketing leader with a social network of fellow marketers.
• You have a tight budget.
  When you don't have the money to hire a recruiter (internal or external) you have no other option than to do it yourself.

When to hire an in-house recruiter?

• You have steady high-volume hiring needs.
  When you're constantly hiring and have stable recruitment plans, it’s time to hire in-house. In-house recruiters can fill around 2-3 complex roles or 10 mass roles per month.
• You need a recruiter full-time and long-term.
  You should hire someone who has wide knowledge to cover various arising tasks regarding recruitment.
• Culture-fit is a priority.
  In-house recruiters can make sure new employees fit company culture and values.
• You want full control over your employer brand.
  In-house recruiters tend to be the best representation of your employer brand.

When to hire an agency?

• You have urgent or highly specific hiring needs.
  If you've tried filling the role by yourself without success, it’s time to bring in extra help.
• No one on the team has recruiting expertise for certain roles or specific locations.
  When building a technical team in another country, it’s wise to consider hiring a local agency with expertise in that region.
• You don’t have enough resources.
  You need to fill a position quickly and don’t have time to source, screen and interview multiple candidates.
• You don’t have steady hiring needs.
  This could be the case if you have one-time or seasonal hiring needs.

When to hire a freelance recruiter?

Similar points apply for freelancers and agencies. The core reason is the same – you need an expert partner to temporarily help you with whatever challenges you face.

Consider these differences when choosing between agencies vs freelance recruiters:

• Freelance recruiters are something in-between an agency and in-house recruiter – you'll get the flexibility and specific expertise, but also more personal collaboration and a better understanding of your culture.
• Freelance recruiters are not cheaper by default, but they can be more flexible regarding pricing and work scope.
• Freelance recruiters can be even more specialized and niche-focused than agency recruiters.

When to choose RPO?

• You need to scale quickly and ramp up hiring during periods of rapid growth.
• You’re expanding to new markets and need local expertise to navigate unfamiliar job markets effectively.
• You want predictable costs with fixed monthly fees to make budgeting easier.
• You want a plug-in and plug-out solution to scale or lower hiring as needed.
• You want flexibility without long-term commitments.

I hope this article has made deciding on your recruiting strategy a bit less painful. Remember, there is no right or wrong choice. It’s all about aligning your pick with your hiring goals and business priorities.

If you're searching for external recruitment partners to support your hiring process, use our free search feature to explore and find the best fit for your hiring goals.

Happy hiring!  👋😊