Looking at the realities of globalisation and change as it pertains to today’s marketplace, companies would be forced to rethink the modalities of their traditional hiring process. From taking part in an in-house model of hiring, companies are fast becoming focused on new ways through which they can develop viable cost-effective operational efficiencies and reach global talent in other innovative forms of sourcing.
This blog will talk about the cost, benefits, and operational implications of both hiring models. Also, the contrast between in-house with external hiring models. This will also make you understand what the advantages of external recruitment are.
What are in-house hiring and remote hiring models?
In-house hiring: This is the oldest model; it means that employees come to the office of a company to do work. It will include infrastructure at the office, local recruitment processes, and benefits for all employees hired under it. In-house teams can have face-to-face collaboration as well as close alignment with company culture and goals.
Remote hiring: This is essentially when a company has outsourced or EoR an employee to work remotely from any location across the globe. Employees do not work from the physical office space of the company; instead, they remain connected and collaborate via technologies such as the internet. Some of the main advantages of this type of arrangement include flexibility, scalability and global talent sourcing. Read our blog on what is remote working and the benefits of remote working to learn more about it.
Both present unique opportunities and challenges. The key is to find the factors that lead to organiisation’s growth strategy, budget, and long-term goals. Let’s see what the advantages of external recruiting are compared to internal recruiting.
Advantages of in-house hiring
Control and oversight at their best
The greatest advantage of in-house hiring is the possible direct supervision of an employee by an employer at work to see and monitor exactly what is going on at work as regards how the company policies are adhered to, as well as fast feedback.
This also enhances on-site employees' interaction and collaboration, especially in the industries concerned with much creative work or high-touch aspects, which calls for a lot of interaction.
Team cohesion and company culture
Most of the time, teams that are working in-house are close to each other since they spend time seeing each other every day. This means there is improved communication, collaboration, and a sense of unity among the team members. Cohesive activities that take place in one locality further enhance the culture within the organisation, leading to higher morale among employees, and in turn to more cutting-edge retention strategies.
Immediate access to resources
In-house employees have direct physical access to organisational resources - technology, office space, and support services provided by the company. There exists no elaborate onboarding process entailing remote employees being given tools and training. In addition, co-location facilitates easy access to support from colleagues and other departments within the organisation.
Easier training and development
Managing employee training in-house is easier. For example, employees can attend live training sessions or in-person workshops and get direct support from their supervisors. Remote employees typically require more structured training with online modules or recorded videos, which may be less effective in some cases.
Enhanced security
In-house recruitment can enhance security for companies with sensitive information. It is easier to keep sensitive information and intellectual property safe in a controlled environment. Unlike in-house employment where an employee is assured of monitoring, at home, he faces more threats with remote work because employees' personal devices can easily be exposed to unprotected networks.
In-house recruitment challenges
Higher costs
Costlier as the organisation has to provide office space, utilities, equipment, and all other resources. The salary paid to the employees is less than the total cost incurred by the organisation; one has to pay for insurance, training, and benefits when employing people in-house.
Narrow talent pool
Suppose an organisation hires its employees from within and does not recruit from other areas; it will be confined to a certain geographical area. The available candidates are limited to people who are willing to move elsewhere or commute to the office daily. This holds true, especially for companies that are situated in smaller cities and areas with lower demographic density, for their talent pool is bound to be extremely low.
Learn more about HR outsourcing cost
Complacency potential
In-house employees, especially those who have long been in the company, can become complacent in their jobs. Familiarity breeds an office full of the same people, often suppressing innovation and creativity, thus bringing a near absence of new ideas into the business.
Employee turnover and absenteeism
Potential absenteeism or turnover can further affect in-house workers, thus potentially affecting continuity of work. Employees may just be present, and not engaged at work, thus leading to lower productivity, while a remote worker may be completely motivated by flexible working environments but face difficulties in adjusting to organisational culture or a distractive personal environment at home.
New approach of remote hiring
This type of hiring involves hiring people from beyond the locality, at times even international countries, who are going to work at their home or any other remote site. This is probably one model that has been gaining an edge over others in the past few years and found an irreplaceable place through digital communication media like Zoom, Slack, and Microsoft Teams, which would otherwise be impossible without such applications.
Remote work recruitment benefits organisations in multiple ways, let’s see why external sources of recruitment are important.
Benefits of remote recruitment
Exposure to a worldwide talent pool
Remote hiring opens the door to international talent. You aren't limited to hiring qualified individuals within the confines of a location. A company can hire people without having to worry about where they live, offering the possibility to hire someone with the best skills and experience. That means that the company can recruit from all over the world in many ways.
Cost-effective
Remote hiring can greatly cut costs for an organisation. There will be no office space, utilities, or equipment spent during the hiring process. In fact, most remote employees are expected to have their own home offices and equipment, which further cuts down the financial burden on the company. Some companies also have remote workers in low-cost living areas and thus are able to pay highly competitive salaries that would be lower than what could be expected in high-cost urban areas.
Checkout the latest offshoring trends 2024
More elasticity, more productivity
Remote work allows an employee to better balance personal life with work, which often brings with it increased productivity. As a result, remote workers are able to manage their day much more easily because they will not need to make a commute to work, thus reducing pressure and increasing output. Flexible hours are also a boon whereby companies can take different time zones, thus enabling better service through regions.
Fewer days off work
Absenteeism is less likely to occur among remote employees. This is because they work from home, away from office-related diseases and environmental factors that cause employees to take sick days. Quite conceivably, an employee working remotely may work through minor ailments in the comfort of his or her home instead of taking a full day off.
Improved retention rates
Being at home, a remote worker is likely to experience high job satisfaction since self-determining freedom comes with it. An employee would be trusted to manage his/her schedule because such would make an employee inclined to remain with the company in the long run. In addition to long-term retention benefits, flexible work hours allow companies to attract more high-quality talent whose priorities focus on work-life balance and flexibility.
Remote hiring challenges
Communication and collaboration
Although technology has made remote collaboration possible, it remains challenging for many teams to communicate remotely. Misunderstandings arise from a lack of face-to-face interaction, thus delaying or making functions erroneous. Investments in necessary equipment and practices by companies come in to smoothen the communications for virtual work.
Cultural and time zone dislocations
Hiring employees from different parts of the world often leads to time zone differences and cultural diversities. This makes it difficult to schedule meetings at relatively good times for all employees. Most remote workers suffer from complete disconnection from their colleagues, especially those sleeping at different times because of time differences.
Accountability and trust issues
Managing remote employees means there is an extra burden of trust from the managers. Since there are fewer opportunities to monitor the worker's tasks in person, the manager requires another way to judge performance and hold the employees accountable. This often includes setting clear expectations, tracking tools, and ensuring transparency in the reporting of progress.
Check out our blog on "HR Outsourcing Trends"
Technical problems and security problems
Another aspect of remote work is technical problems due to software failures, connectivity hiccups, and equipment malfunction. Security prevails over this because sensitive company data can be accessed in many locations and with different forms of security. Therefore, organisations must ensure strong cybersecurity protections against breaches because this condition exposes remote workers using personal and unsecured networks.
In-house vs. remote hiring
Hiring cost analysis with external talent acquisition and in-house
In-house costs
Office space and utilities: All the expense of office space, utilities, maintenance, and more is borne by companies that hire employees directly. If companies are in high-rent urban areas, this cost can add to the burden significantly.
Employee benefits: Most in-house employees would be entitled to such benefits as health insurance, retirement benefits, paid leaves, and the like. Therefore, these benefits add to the total salary package of the employee.
Equipment and resources: The space for offices includes desks, computers, telephones, and other office resources for in-house employees. These are used to contribute to employee work welfare packages of the employing organisation.
Training and development: Organisations must budget for employee training, whether through workshops, conferences, or formal education.
Remote costs
Technology infrastructure: Remote workers require tools that help them communicate and work together: video conferencing, project management software, and secure file-sharing. Subscription fees are often attached to these tools.
Employee benefits: Employees without a workplace will probably have less need for the benefits associated with a typical office workplace, but they will need health insurance, retirement plans, and many cases' paid time off.
Salaries: Hiring remotely tends to offer savings, especially when hires are being made in less costly regions. The company, however, should ensure that these salaries are competitive enough to draw the best talent-the ideal employee, so to speak.
Cybersecurity: Remote hiring demands spending on cybersecurity protocols to ensure secured data. These include virtual private networks (VPNs), encrypted communication tools, and secure access to company systems.
Factors to consider other than cost
Recruitment processes
In-house recruitment
Advantage
In-house recruitment is usually conducted through conventional recruitment mediums, such as job fairs, networking events or advertisements on local job boards. This makes it possible for a recruiter to interview candidates face-to-face, which allows for better interpersonal skills assessment in a more immediate and personal setting.
Apart from that, in-house recruitment enables employers to assess an applicant’s cultural fit within the team or organisation very quickly. Having candidates come into the office allows both the employer and the employee to gauge the working environment in person.
External recruitment has pros and cons as well but you need to understand the cost comparison of recruitment methods better to make a wise decision.
Challenges
In-house recruitment may have geographical limitations to the recruitment process. The company is confined to picking employees from a smaller market area or people who want to move into this region.
Moreover, in-house recruitment may also be time-consuming and expensive, especially when it comes to roles where a lot of in-person interviews are involved. Recruiting in-house talents from outside the company's network can also be intensive, from sourcing candidates to conducting interviews and background checks. Time taken to source, vet, and hire candidates can affect the staffing process, which is not favourable for businesses with urgent hiring needs.
Remote hiring
Advantages
Remote hiring leads to a widening talent pool by opening access to global and universal candidates without geographical bounds. In fact, it adds value in niche-focused or highly specialised companies where the employees required are few. There are plenty of online resources such as LinkedIn, Indeed, and many more, even specialised remote job boards like We Work Remotely or Remote OK.
The time taken for remote recruitment is less, as compared to internal recruitment for employees. The portals have a wider audience whom the users want to reach. The application process is simpler as well. Flexibility in remote recruitment permits the client to choose any time zone. It aids in speeding up the decision process for hiring. As a result, this reduces the recruitment cycle significantly. Thus, the business employs new talent even more rapidly.
Challenges
Recruitment in the absence of faces is quite hard for companies used to in-person and personal interaction. The definition of cultural fit, communication skills, and attitude of a candidate might require more thought regarding the assessment methods. Interviews held on a screen don't provide the same insight into candidates' body language or presentation.
This makes it more difficult to make decisions. To employ state-of-the-art technology tools to carry out interviews, assessments, and virtual onboarding, the remote recruitment process demands high-end HR infrastructure.
1. Work environment and engagement
In-house
Advantages
The most valuable element of in-house employment for most employees is the physical office. Employees can build peer-to-peer links, share impromptu brainstorming sessions, and receive live mentorship. For many employees, the office environment is more than just accountability and camaraderie, as it is difficult to replicate this feeling through remote offices. There’s also the added benefit of being able to see the leadership and peers face to face - this makes it easier to feel heard and valued by employees.
In-house employees typically have direct access to all company resource assets like their office supplies, technology, and internal support teams. This all means they could work with almost no delay or friction at their full level of productivity. Such employees might also have additional perks, e.g., free snacks, gym facilities, or team-building events, making the overall work experience even better.
There are multiple advantages of hiring internal vs. external candidates but external recruitment has benefits as well.
Challenges
The biggest problem with in-house employee experiences is that flexibility is lacking. An employee is expected to follow a specific, fixed schedule to get to the office every day, which becomes cumbersome and time-consuming, especially if they live far away from the office. In-house work is often too inflexible, leading to burnout or strains or, in more serious cases, dissatisfaction as employees feel they lack control over their personal time.
Being in-house sometimes has that feeling of team dynamics that develops among employees into cliques and office politics, which hampers collaboration. The in-house employee may also have difficulty maintaining a work-life balance since the physical office becomes somewhere the employee is supposed to be working excessively.
There are multiple advantages of hiring internal vs. external candidates, but external recruitment has benefits as well. Let’s see
Remote hiring
Advantages
Freedom and flexibility are the two main advantages of remote work. Employees control how they spend their working hours to a large extent, which results in higher job satisfaction and well-being because personal commitments and individual preferences can easily be harmonised with work. The absence of a commute is yet another major benefit as it frees several hours in a person's day which otherwise would have been lost in travel.
Remote employees often report higher productivity due to the elimination of most office distractions. Learning from this experience is that a remote setting would allow improving flexibility to have a personal setup that suits individual needs, and thus it can increase performance. Consequently, it gives a wide reach pool and allows people working from anywhere in the world to join the company; thereby increasing inclusion.
Challenges
The remote experience could sometimes be perceived as loneliness. Employees might feel lonely or cut off, as they do not have the activities associated with being in an office with other employees. Very often, remote employees also suffer in terms of identification with the company mission, goals, and culture due to poor remote collaboration tools or a deficient communication strategy inclusive of remote workforce.
Another could be compromised boundaries relating to work versus personal life. The absence of an office space causes confusion due to which remote employees experience difficulty in shutting “down” at the end of the day. Hence, it ultimately leads to burnout or makes one always feel "on". Companies should thus place more importance on mental health and well-being by creating a supportive remote work environment.
2. Team collaboration and communication
In-house
Advantages
In-house teams would be to get their heads together and start discussing matters face-to-face. Face-to-face meetings can make clearer communication and quicker resolution of issues. Lunch-time chats or spur-of-the-moment discussions in the hallway or the meeting room can come up with that all-important new idea and create team cohesion out of in-house members.
One brings all people together in one building, thus leaving no room for misunderstandings that can arise through virtual meetings. The in-house team can respond immediately to any concerns or questions, making the entire process of answer-making faster.
The project can also be worked upon by the tools of collaboration, like project management software, on top of the physical meetings between in-house members. Such meetings help enhance the overall efficiency of the project and alignment within teams.
Challenges
In-house collaboration is usually affected by office distractions. Open-plan office arrangements are known to be noise disruptions. Employees are interrupted because of colleagues talking over each other, or perhaps they will attend meetings every time there is a discussion. Managerial factors do not proactively promote communication and appreciation of the value of diverse voices within the team; hence, team collaboration may not profile well. Finally, as teams get bigger or with more appearance-specific members, such that they are dispersed in space even within the same building, communication silos form, thus reducing the overall collaboration and innovativeness of the team.
Remote hiring
Advantage
It's part of remote collaboration advantages that the tools and technologies available make it possible to boost communication, especially among distributed teams. With apps like Slack, Microsoft Teams, Zoom, and Google Meet, remote teams can virtually mingle, share real-time information, and develop collaborative documents. All these platforms help them collaborate as though they are in the same location.
There is another mode of collaboration in the form of communication, which allows team members to read or compose responses regarding a project or message at their convenience or at a time that suits them. This is especially useful for clubs with distant timekeepers, keeping feedback and contributions coming from opposite sides of the world. Besides this, it leaves time for employees to manage their task completion according to their convenience doing away with some pressure involved due to constant face time.
Challenges
Miscommunication actually results from the distances apart and the lack of proximity of employees. Messages may be misinterpreted because there are few visual cues and immediacy in face-to-face conversations. This calls for teams to become more intentional with the use of clear and concise communication since it might create delays or inefficiencies or require more time to complete the task. Frequent check-ins and virtual meetings during which things are discussed are necessary at some point but can get quite inconvenient and tiresome if not adequately planned out.
Sometimes, remote collaboration is also disintegrated by the absence of strong leadership of the team, as well as inadequate project management systems. Most informal communication can also be done away with altogether and ultimately becomes a hindrance to team development and the free flow of ideas that takes place naturally in an office setting.
Conclusion
There is no black-and-white solution to the controversy surrounding in-house versus remote hiring. Each model carries unique merits and demerits that must be counterweighted against the particular needs and goals of the business. While there are tangible benefits such as ''team cohesiveness," ''direct supervision,'' and ''using the company's resources,'' in-house hiring is expensive and has geographical constraints. On the other hand, remote hiring has the potential for cost-saving, wider global access to talent, and added flexibility but suffers from poor communication, collaboration, and building internal culture.
Optimising the workforce for the emerging business environment through the understanding of the nuances of each model and aligning hiring strategies with business long-term objectives gives companies a competitive edge. Either way, in-house or remote, the best part of all this is choosing which one to use that fits the culture of the company, its operation requirements, and ambitions for growth.
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