Is outsourcing external hiring a good idea?

For quite a number of years now, we have seen that organising the hiring of external personnel is increasingly being outsourced to external parties: Managed Service Providers (MSPs), Brokers and a range of variants of this service.

In this article, we will briefly discuss the most important factors that determine if it is a good idea for your organisation to use MSP and/or broker services.

Important factors for the added value of outsourcing
Both an MSP and a broker are extra links that are added to the hiring chain. But do these links actually add value? There is no simple answer to that question, because it depends on a number of factors:

1. Hiring
   a.  The volume and type of hiring by the organisation.
   b.  What developments are expected of that hiring in the next 5 years.
2. Organisation
   a.  Structure and responsibilities in the organisation.
   b.  In-house expertise the organisation has.
3. IT
   The possibilities that the existing IT offers for the use of supporting technology (Vendor Management Systems).

Volume and type of hiring, now and later
When external personnel only consists of temporary agency workers from a limited number of reputable agencies, the deployment of a broker is not necessary. If freelance workers and/or many small suppliers are also used, a broker can add value. To set up an MSP service well and affordably, some scale is needed. In addition, the organisation will have to consciously choose to follow the “rules of the game” with an MSP solution. This requires a well thought-out solution that meets the needs of the organisation. Not only the needs at that moment, but also those in the coming years. Apart from that, it requires a straight back from the responsible management to have the MSP actually implement the agreements that were made.

The internal organisation
The internal playing field in the organisation is a factor that should not be underestimated. How is external hiring organised? Is there a clear and feasible policy? Is hiring organised centralised or decentralised? Which stakeholder is assigned responsibility for what part in the hiring process? And also, is the hiring process guaranteed compliant (according to the rules)?
A theme that certainly plays a role in uncertain times, is the scalability of the internal organisation. In addition, it is important to have the required expertise available in all relevant areas. Think of market knowledge, but also, for example, knowledge and skills in supplier management.
Good insight into all these themes indicates which aspects could profit from outsourcing. It also makes clear if preconditions, such as sufficient commitment and mandate, are in place to outsource successfully.

IT support and integration in the IT landscape
In most cases, an MSP uses a Vendor Management System (VMS) to support the hiring process and to manage and optimise its services data-driven. Organisations also sometimes choose to use a VMS to support their own hiring process. In order for a VMS to function well, proper integration into the IT infrastructure of the organisation is necessary. Consider, for example, logging on (Single Sign On), exchanging the organisational structure (including the roles and rights of employees) and connecting to financial systems. Is the organisation ready for that? And is capacity available for any necessary interfaces and adjustments?

Safe data
Another point of attention in outsourcing may be the additional complexity of data processing and data privacy. There will be extra links in the chain and good agreements must be made with each link to guarantee data protection.

So, to outsource, or not?
We come back to the question: Is outsourcing external hiring to a broker, MSP or a variant of those a good idea?
As described above, this question can only be answered after carefully considering the objectives of the organisation, the nature and volume of the group of external employees to be hired and whether the organisation is sufficiently prepared to outsource these tasks and responsibilities.

A good choice requires attention, knowledge and time. It is important to involve all stakeholders in this process in a timely manner, both to be able to properly weigh all interests, but also to create sufficient support within the organisation from the start. Certainly for this subject, good preparation and a well-considered choice will pay for itself in time: Beforehand it must be clear what goals you want to achieve and what investments are required. This facilitates a good and efficient implementation of a solution that contributes to the ambition of the organisation in the long term.

If it is clear why outsourcing is not (yet) being chosen, the focus can go to optimising the internal solutions and, if applicable, taking the necessary steps to be able to outsource at a later stage.

A wrong choice, resulting in a failed implementation, is extremely costly for all involved and should be avoided at all times.