Most growing companies should not own their recruitment function

Your in-house recruitment function is costing you more than the agency fees you set it up to avoid. For most companies between 100 and 500 people, the honest answer is to stop owning it.

That sounds like heresy to a founder. Who you let in decides what the place becomes.

Keep the decision. Stop running the machine.

Recruitment is the function founders keep because it feels like control

Nobody insists on hosting their own email any more. Recruitment survives as an in-house fiefdom because it feels personal and because a recruiter's salary looks cheap next to a stack of agency invoices.

So you hire one recruiter, give them a job board login and declare the problem solved. Eighteen months later they are drowning, the hiring managers are back on the phone to agencies and nobody can tell you what a hire actually costs.

What owning it actually costs a 200-person business

The CIPD's Resourcing and Talent Planning Report 2026, a survey of more than 1,000 HR professionals, found that 46% of organisations still recruit on an ad hoc basis and only 19% measure the return on their recruitment at all. Among private sector SMEs that figure falls to 9%.

Read that again. Nine in ten mid-sized private firms run one of their largest discretionary cost lines with no idea what it returns.

The same report puts the median cost of recruiting a senior manager in the private sector at £5,000, up from £2,000 two years ago. That is the visible number, the one that goes in the budget. The REC has estimated that a single failed mid-manager hire costs more than £132,000 once lost productivity and management time are counted. One bad senior hire a year wipes out whatever your in-house set-up saved you in fees.

The maths nobody does on the empty desk

Ask your finance director what a vacant sales role costs per week. Not the recruiter's time, which is the only cost most firms count. The revenue that seat would have booked, the customers the rest of the team dropped to cover it, the manager's Fridays spent sifting 200 CVs that all read the same because the applicants used the same AI tool.

The CIPD found 58% of employers now see more unsuitable applicants than a year ago. Only 33% see more suitable ones. Volume went up and signal went down. Your one recruiter absorbs the difference.

If the vacancy costs more than the recruiter, you do not have a recruitment function. You have a bottleneck with a salary.

The partner model: your brand, their process

The alternative is not going back to agencies. It is a partner who runs recruitment as a process, under your name, with your hiring managers making the decisions. The model has a dull name, recruitment process outsourcing, but it comes in several shapes. Omni RMS RPO services range from a full takeover of permanent hiring to a dedicated team for a single contract or site opening.

VINCI Facilities had a chronic problem with candidates accepting a verbal offer and never turning up. A published case study on the partnership reports a 30% drop in candidate dropouts, time to hire down 51% and 1,707 roles filled, with the fix coming from the boring bits: contracts issued in 48 hours instead of five days, a candidate care team ringing people before they started and hiring managers trained to stay in touch.

None of that needs a founder's genius. It needs a process, run by people whose whole job is the process.

When you should keep it in-house

Keep recruitment in-house if you hire fewer than a dozen people a year and the founder still interviews every one. Keep it if your roles are so specialised that the knowledge of who is good lives in two heads and nowhere else. Keep it if you have already built a team with proper data, a measured cost per hire and a view of how new starters perform at six months. Only 19% of organisations have that and they should carry on.

Everyone else is paying for control they do not actually have.

One thing to do this quarter

Work out what one empty seat cost you last year, in revenue and management time. Put it next to your recruitment budget. If the first number is bigger, the question is no longer whether you can afford to hand over the process. It is how much longer you can afford not to.

‍