No one wants to waste money, which is why keeping recruitment in-house seems like a sensible option, at least at face value. However, in-house recruitment is not without its share of pitfalls. At Southside Staffing, we see many small businesses encounter unexpected snares and expenses when they begin hiring internally. With business performance relying heavily on having the right people, it’s essential to strike the right balance between managing costs and doing what it takes to get a good outcome.

We want you to have all the facts when deciding between an in-house recruitment process or working with a recruitment agency, which is why we’ve put together some of the biggest hidden costs of hiring directly to keep in mind.

The Buried Consequences of Internal Recruitment

In addition to the obvious expenses involved in recruitment such as advertising on a job board, there are several other costs a business may have to deal with.

The Strain on Administration

One of the disadvantages of recruiting directly is the unforeseen toll this will take on your administration. In the world of recruitment, posting the job advert is just the beginning. Businesses recruiting in-house take on a huge number of tasks, such as writing the job description, sourcing job boards, screening resumes, shortlisting applicants, conducting interviews, checking references, communicating with candidates, making offers, handling negotiations and drawing up employment contracts.

All of these tasks will be a big strain on the person or people responsible, taking up a lot of their time and preventing them from doing the work they should be focussed on, which may result in lower productivity overall. However, with a recruitment agency, we take on the load and save businesses a significant amount of time and hassle, allowing their people to concentrate on what is really important.

A Limited Talent Pool

Unless they have a candidate referred to them, most businesses have to work with the applicants that come through the job board. Unfortunately, sourcing candidates this way doesn’t always result in the broadest or highest quality talent pool to choose from. One of the benefits of using a recruitment agency is that they have a large network of contacts in the industry and a database of qualified talent, enabling them to access a better and more varied range of candidates.

The Impact of Company Reputation

For better or for worse, in today’s world everyone is connected, so every interaction has the potential to significantly impact a company’s reputation. The recruitment process is no exception – the way a company deals with candidates has major ramifications for their brand. We often see small businesses struggle to manage the flow of applicants, and as a result are slow to communicate and move through the recruitment stages. A poor candidate experience can negatively affect the way people perceive the organisation, and with a combination of word-of-mouth and websites such as Glassdoor, this could potentially damage your hard-won company brand.

When using a recruitment specialist, the agency is able to shield your brand from candidates by acting as the middle man. They will serve as the point of contact for all candidate questions and concerns throughout the process, and are dedicated to ensuring a positive experience.

The Pitfalls of Salary Negotiations

Whilst salary isn’t everything for many candidates, it’s still important to get it right when making a job offer. If businesses offer too high a salary, there is a good chance they’ll stretch their budget too thin. On the other hand, going too low could result in missing out on top candidates. An easy way to avoid this recruitment pitfall is to have an expert on hand. It’s part of a recruiter’s job to keep tabs on market rates and find the right balance for a company’s needs, whilst managing negotiations with candidates.

Faulty Decision Making

One of the biggest disadvantages of recruiting internally is the chance that the successful candidate ends up being the wrong fit for the business. More often than not, this risk is increased when companies feel pressure to fill the role quickly, leading to a rushed decision. Whether it’s supporting a new employee, or looking into ways to turn performance around, it can be frustrating when you can’t see progress being made. However, the easiest way to avoid this is to seek help from a specialist recruiter to increase the chances of hiring the right person from the get-go.

Is a Recruitment Agency a Good Investment?

Although building a team that will help your business thrive may seem daunting, the good news is that you don’t have to go it alone. Working with a recruitment agency can not only save money, but will likely result in a better hire and, ultimately, greater results for the business overall.

Recruiters bring many key advantages to the table. They have a keen knowledge of the market and keep up-to-date with the latest industry trends and developments, allowing them to provide insight into skill shortages, market salary rates and so much more. As we mentioned before, recruitment agencies already have a talent pipeline filled with both active and passive candidates, which enables them to give companies a better selection of people, including those who may not be actively looking. Finally, recruiters are focussed on building long-term relationships with their clients, and this helps make future hires smoother and more efficient as they will have a better understanding of your needs and culture.


Using a recruitment agency may not be for everyone, but it’s important to consider the bigger picture when it comes to in-house recruitment costs. Remember, it’s not just the job advert that companies will be paying for – there a number of other costs that cause issues when hiring directly. The good news is that by seeking help from experts such as Southside Staffing , you can avoid any unfortunate surprises, know exactly what expenses to expect and even get better outcomes from the hiring process.

To learn more about how we can help you with your recruitment needs, get in touch today.