top of page

In Sourcing vs. Outsourcing: What is the Difference?

Many companies are looking for alternative solutions to getting work done for less money. When I first read the book “The World is Flat”, I was freaked out to say the least. If Thomas Friedman is accurate, I thought, the business that provided me a healthy income for almost 23 years would soon become a thing of the past. I needed to shift my focus and I needed to do it before the change was upon me. Since 2005, when my book group of recruiters and technology professionals gathered to discuss the potentials impacts that the world being flat on the recruiting and staffing industry much has changed. Between Off Shoring, Outsourcing and Technology, companies have plenty of options and resources to increase their output while being much more operationally efficient and profitable.

Why Outsourcing?

Hundreds of name brand corporations that I know of have set up offices off shore in Costa Rica, Thailand, India and the Philippines. Other companies are taking advantage of outsourcing and utilizing lower cost resource centers in the U.S. such as El Paso and Detroit; as well as several cities in Utah, Iowa and Nebraska. Progressive and responsive companies are outsourcing everything from general accounting functions, interpreting & analyzing reports, data management, routine call center & data processing operations, architectural design, elements of software support and development as well as elements of the recruitment process. Furthermore, there are entire businesses (BPO) set up to completely outsource non core business functions such as recruiting, data processing, software development, network administration and accounting. The theory is, when a company capitalizes on their core functions and stays focused on delivering excellence in their area of specialty they dominate the competition.

In the recruitment industry one of the big industry game changers is RPO, Recruitment Process Outsourcing. This type business process outsourcing completely removes the recruitment function from the corporation and gives 100% of the accountability to an outside resource. Companies are offered better, faster and less expensive recruiting on a mass scale. While old school staffers say this is not working, the black box report on RPO informs us that 90% of all companies using the services of an RPO are very happy to extremely happy. The deal with RPO is for it to be cost effective and efficient there needs to be a certain amount of openings and the company must be committed to outsourcing and to let the RPO lead the way in best practices.

Technology progress has brought many savings that we experience daily to state organizations, banking, the entertainment industry, and in my world recruitment. It started with ATMs, Tollbooths and Movie theaters and then before I knew what was happening there the progress was in my front yard, impacting my industry and my business. Some people complain about technology stealing jobs and replacing humans, as a business owner, and a 25-year veteran in the recruitment industry I say hurrah! If technology can replace menial tasks, can make our teams more productive and aid us to deliver service better, faster and cheaper then bring it on.

In my business, my team used to scour the internet looking for resumes, hour upon hours of time, high value time, searching for qualified resumes; now I can chose to utilize a technology or off shore resource to accomplish this and when I am working with the right recruitment professional, they relish in the opportunity to spend their time on higher level impact recruitment functions.

So what about In Sourcing?

Many companies have established recruitment as a strategic function and a core component of their business strategy. They have fundamentally linked the quality and effectiveness of their talent pool to their ability to progress faster than the competition and deliver a higher level of service to their valuable customer base. In these cases these companies do not believe that outsourcing such a crucial function is a sensible way to achieve their goals. They prefer to bring best practices and leading experts in the recruitment and talent management field into their company on an as needed basis. They utilize these experts to train, coach and direct their internal human capital efforts when they need and how they need it. In my experience companies that have hired KeenAlignment as their (RPI) Recruitment Process In Sourcing and Talent Management In Sourcing (TMPI) provider choose us because we bring the expertise in the areas recruitment technology and assessment selection, candidate sourcing and recruitment functions as well as programming and resources for employee retention and next level & emerging leader development.

The type of companies most likely to utilize recruitment in sourcing are companies that are on their way up; they could be in an emerging market, a start up or a company whose corporate headquarters are located in another country. One thing these companies have in common is they have specific growth plans and are committed to building their organization with the best talent they can secure.

Let’s face it, whether you are a commercial staffing or recruitment firm, a single recruitment provider or a recruitment department it makes sense to outsource, off shore or bring systems and technology to specific aspects of your recruitment process as anything you can do to maximize your efficiency and profitability is a mandatory business requirement. Similarly a business leader of a company on your way up, the right answer for you might be to bring the best possible resources inside on an as-needed basis and only pay for what you need, when you need it.


bottom of page