Is Recruiting Software a More Cost-Effective Solution than Staffing Agencies

Is Recruiting Software a More Cost-Effective Solution than Staffing Agencies?

Kelly Barcelos on March 10, 2017 in Applicant Tracking System

Time and budget constraints are a common problem for many companies when they’re hiring candidates, so HR managers and recruiters often look for outside solutions. This could be in the form of an employment agency or an investment in recruiting software, but which one really offers the most benefit?

Let’s compare how cost-effective the two options are:

  • Hiring Timeframe

    Agencies can probably get you quick hires since they are encouraged to fill positions quickly. However, their own earnings depend on the pay rate for candidates they provide, so they will try to get the highest rate for each one. Even if they have low markups, this additional cost adds up.

    With cloud-based recruitment software, you can ensure that your team remains on track at every stage of the hiring process. It also allows anytime-anywhere access for recruiters, hiring managers and every other individual responsible for hiring or screening candidates.

    This speeds up recruitment and cuts down time-to-hire, allowing you to save money on agency hires. And when you need to fill a position fast without worrying about the cost, you can turn to outside recruiters.

    Verdict: In this regard, recruiting software comes out ahead.
  • Candidate Quality

    Most staffing agencies make an effort to deliver the best quality hires within the shortest timeframe, and often use resume sorting software to speed up the process as well. They may also have built relationships with active and passive candidates alike, to gain a competitive edge.

    Still, they will be in more of a hurry to move on to the next applicant or employer on their list, handing over as many resumes as possible for you to consider. There may not be much difference in candidate quality at the end of the day.

    The supply-demand balance is tilted in favor of employers today, with more people looking for jobs than positions available. With the right applicant tracking system, you could certainly find great talent and build a candidate pool for future hires.

    Verdict: Here, recruiting software and staffing agencies are at par.
  • Onboarding Candidates

    Even if you saved on hiring time by using an agency, it will take a while to collect the documents and data that you need from each candidate. If you’ve done the hiring yourself and used an applicant tracking system, everything is already recorded and ready to go.

    It’s also important to consider the extra time required for finalizing the contract with an employment agency. With a direct hire, you can get straight to onboarding your new employee after making an offer, without any delays in transacting with a third party.

    Mobile recruiting software also allows you to speed up onboarding since you can share company policies and other documents with candidates as soon as they accept your offer.

    Verdict: ATS software wins out over staffing agencies here.
  • Total Hiring Cost

    When you’re hiring candidates through an agency, you’re paying an extra percentage for their services. The more employees you hire through outside agencies, the more you’re spending overall. Over the long term, it’s far more affordable to invest in tools that allow you to maximize direct hiring.

    Today, Applicant Tracking System can automate a huge range of tasks, reducing the time, effort and money you spend on recruitment. Right from posting job advertisements and collecting resumes, to screening candidates based on filters you select, these innovative solutions can practically do it all.

    Your investment in even the most advanced software is one-time, but it leaves you free to work with a smaller HR team.


    Verdict: Applicant tracking systems are definitely more cost-effective.

An applicant tracking system like Jobsoid leaves the control in your hands. You can streamline your hiring processes and cut down costs, but still, use outside recruiters when you really need to. Sign up for a trial and see for yourself!

Kelly Barcelos

Kelly Barcelos is a progressive digital marketing manager specializing in HR and is responsible for leading Jobsoid’s content and social media team. When Kelly is not building campaigns, she is busy creating content and preparing PR topics. She started with Jobsoid as a social media strategist and eventually took over the entire digital marketing team with her innovative approach and technical expertise.