Outsourcing: definition and how to improve external recruitment processes

Outsourcing recruitment processes can offer great benefits if risks that could jeopardize your project are properly managed. To make recruitment...
15 February 2024

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Outsourcing: definition and how to improve external recruitment processes

Outsourcing recruitment processes can offer great benefits if risks that could jeopardize your project are properly managed.

To make recruitment outsourcing a success, it is necessary to take an active role, from managing the legal aspects of the collaboration to defining and communicating clear and precise objectives to stakeholders. 

In this article, we will provide you with a definition of outsourcing, as well as some strategies to improve the process and reduce risk.

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Outsourcing definition

Outsourcing is the externalization of one or more services by a company that hires an outside firm to provide its tools, resources and equipment, perform certain tasks or produce necessary goods for the contracting organization.

In general, outsourced products and services meet some of the characteristics listed below:

  • They generate strategic value, but the company does not have the resources to produce them. 
  • They correspond to occasional or one-time requests, so it is not profitable to invest in tools and fixed resources. 
  • They result from a lack of skills, competencies or experience required to successfully complete the project.

One of the most common outsourcing contracts concerns the recruitment process, especially for the most qualified profiles. 

This can be done through agencies specializing in personnel selection, which take over the management and responsibilities of the human resources department. 

Another outsourcing option for personnel recruitment is the use of headhunters or talent hunters.

Types of Human Resources Outsourcing

You can choose from 3 types of outsourcing to externalize your recruitment processes according to your strategy:

  1. Onshore outsourcing. These are external suppliers located in the same region or country. In fact, they may perform their work within the same company. This allows for a more direct exchange between the contracting and contracted companies, as well as greater control.  
  2. Offshore outsourcing. In this case, you hire suppliers located internationally, in countries that do not share the same culture or language as the company. You may need to use them to obtain profiles with specific skills for your project. 
  3. Nearshore outsourcing. This is when services are outsourced to international companies, but near the country where the requesting company is located. This allows them to reduce the costs of relocation if they need to be produced.

Benefits of outsourcing

The benefits of outsourcing are strategic for a company, both economically, logistically and in terms of development. 

This type of collaboration gives you access to the following benefits:

  • Improved risk analysis by comparing your own forecasts with those of a specialized company.
  • Access to knowledge transfer from the outsourcer to the contractor, which improves the training of internal human resources teams.
  • Savings in operating costs, as opposed to transaction costs, for example, which increase when services are outsourced. 
  • Increased efficiency thanks to a specialized methodology and the use of monitoring tools such as recruitment KPIs.
  • Reduce recruitment deadlines. 
  • Free up internal resources for talent assessment and retention.
  • Access a pool of highly qualified candidates with hard-to-find skills and competencies. 
  • Enjoy greater flexibility to adapt to the fluctuating demands of today’s markets. 

In short, outsourcing helps improve the continuity of your business, provided you meet the challenges it presents. 

Challenges of Outsourcing Recruitment

There are some risks to outsourcing recruitment that you should be aware of in order to improve your external recruitment processes. 

Here are some of the most common: 

  • The risk of revealing secrets that could jeopardize your continuity if publicized. 
  • Exposure to potential hidden costs due to lack of clarity in the contract. 
  • Loss of time if the outsourced company is not properly selected. 
  • Lack of real-time monitoring systems, creating uncertainty for the customer and loss of control over the process. 

Faced with these potential risks, you can take a number of actions to avoid them.

How can you improve the results of HR outsourcing?

Outsourcing should never be synonymous with disengagement. On the contrary, to improve the results of the outsourced process, it is crucial that you implement a series of actions that we have summarized in 5 points.

Choosing the right recruitment company

It is essential that the company to which you entrust the selection of candidates, knows your sector in order to attract the talent that best suits your needs. 

In the same way, you should invest the necessary time in informing the contracted company about your activities and objectives, as this will help them to define the right profiles. 

In addition, before hiring a third party, make sure that the company has the necessary financial solvency. Otherwise, the result may be negative if, for example, it does not dedicate the necessary resources. 

Definition of clear, precise and realistic goals

To achieve the best results in an outsourcing project, it is vital to have clear objectives and communicate them to stakeholders.

These objectives must meet the definition of SMART goals, i.e. they must be Specific, Measurable, Achievable, Realistic, Time-bound. 

Setting the span of control

Since you are going to transfer part of the Human Resources management to external professionals, it is necessary to detail as much as possible the characteristics of the service, as well as the degree of participation and supervision of your company in the collaboration.

Definition of the legal terms of the partnership 

Take care to detail the legal aspect of the collaboration so that it offers you the security that your project needs, as well as to avoid unpleasant surprises during the time of joint work. 

In line with the above, establishing a relationship of trust is essential. For this, it is of utmost importance to detail all the services to be provided and the legal obligations to be assumed by each of the parties.

You also need to take steps to protect your confidential data and documents. The goal is to avoid information leaks that could jeopardize the continuity of your project or even put your employees at risk. 

Design an inclusive strategy

The success of any project also lies in the involvement of all parties from the outset, with effective two-way communication

As far as your company is concerned, your internal HR and management teams need to value collaboration and understand the need to engage the service, the implications of not doing so, etc. 

In the same way, they need to be aware of the details of the operation as well as its evolution.

At Smowltech we propose a series of proctoring plans to improve any type of recruitment thanks to the automation, security and privacy of innovative remote monitoring. 

Ask for your free demo, so we can explain the solutions we have to offer that you may not be aware of.

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