Does Hiring Within Your Network Save Money?

Written by Andy Strong, Oakstone Divisional Director.

In recruitment, there's a common belief that hiring within your network is a cost-effective strategy. This approach, however, often turns out to be an oxymoron, with hidden costs and challenges that could overshadow the initial savings. Understanding the impact of this strategy, especially in revenue-generating roles, and the alternative benefits of partnering with a professional recruiter is crucial for any business seeking long-term success. (Maybe I'm biased, but the results of the companies we're supplying with top global performers suggest otherwise).

The Allure of Network-Based Hiring

Hiring from within your network seems straightforward and cost-effective. It promises quick access to candidates and potentially reduces hiring expenses – it also means you're hiring "known quantities". However, this method is not without its pitfalls.

The Hidden Costs

Limited Candidate Pool and Potential Bias 

This approach can restrict you to a smaller pool of candidates, potentially leading to suboptimal hires. There's also a risk of unconscious bias, which certainly won't ensure you hire the best option available at any given time.

Neglecting Diverse Talent

It might sideline diverse talent, leading to a homogenous workforce and limiting innovation and growth.

Long-Term Cost of a Bad Hire

If the hire is not a good fit, the eventual costs can far exceed the initial savings, impacting productivity and team morale.

The Exponential Cost of Open Headcount in Revenue-Generating Roles

The cost of an open headcount is exponentially higher in commercial roles. It's not just about salary savings but the lost revenue potential. Vacancies in these roles directly impact the bottom line through lost sales opportunities, decreased team morale, and weakened market positions. (Not to mention the unmeasurable impact on your stress levels or kudos).

Download our guide, Cost of an Open Headcount. 

Balancing with Broader Recruitment Strategies

Balancing network-based hiring with more inclusive recruitment strategies is key. This includes using job boards, engaging with a proactive recruitment partner, and implementing structured interview processes for objective assessments – resulting in you covering all bases.

The Value of Partnering with a Trusted Recruiter

Engaging with a professional recruiter can be a game-changer – especially if you've not found one you can trust to hire across multiple departments and regions. A recruiter who offers a true partnership can significantly expedite the hiring process, ensuring access to a broader talent pool, including top global performers.

Risk Mitigation with Rebate Offers

A trusted recruiter can offer rebate schemes to mitigate the risks associated with a bad hire, safeguarding your investment.

Consistency in High-Quality Hires

A recruiter's expertise in sourcing top talent consistently can lead to significant revenue growth, success, and enhanced company reputation – including your own enhanced situation.

Long-Term Benefits

In the short, medium, and long run, partnering with a recruiter offers substantial benefits. It ensures cost savings and high-quality hires that contribute positively to your company's growth and market position.

"I recently worked on a role with a long-term client looking for a VP in EMEA. Prior to discussing the role with me, they had spent four months trying to find the right person through their existing network, as well as incorporating some cold outreach searches internally. They gained some great volume; however, they failed to source the right calibre of candidates. We fast-tracked three candidates to final stages within eight weeks, leading to one getting hired."

- Tristan Heywood, Divisional Director. 

Key Take Aways

While hiring within your network might seem initially cost-effective, the potential pitfalls and the hidden costs, especially in revenue-generating roles, can be detrimental. By partnering with a trusted recruitment firm, you not only mitigate these risks but also position your company for consistent, high-quality hires and long-term success. The right recruiter doesn't just fill vacancies; they work with your hiring managers, talent teams, and HR to empower your business with talent that drives revenue, innovation, and growth.

Written by Andy Strong, Oakstone Divisional Director.

Andy Strong joined Oakstone in 2007, having established and built Oakstone’s second UK office, based on the south coast of England. He’s built a team of highly skilled consultants that have demonstrated steadfast delivery capability in working with market-leading cloud-based, B2B enterprise application vendors across all of EMEA.