Internal vs. Agency Recruiters: Why the Debate Misses the Point

A recent LinkedIn post by an agency recruiter reignited the long-standing debate between internal recruiters and external agencies. The post accused companies of refusing to work with agencies—until desperation sets in and they need help filling critical roles.

This frustration highlights a deeper issue: the outdated, commission-based agency recruitment model. It’s not just inefficient; it actively creates friction between internal teams and external partners. The problem isn’t about whether agencies or internal recruiters are “better.” It’s about fixing a broken system.

The Challenges of the Traditional Agency Model

The commission-based model, which has been the industry standard for decades, creates significant problems for organizations:

1. Misaligned Incentives

Agencies working on commission are incentivized to fill roles quickly and secure their payout. This often results in candidates being pushed through the process, even if they’re not the best long-term fit for the organization.

2. Excessive Costs

The fees associated with the traditional model are staggering. Agencies typically charge 20% to 30% of a candidate’s first-year salary. Filling a $100,000 role could cost an organization $20,000 or more—for just one hire. This high price tag often forces businesses to make trade-offs elsewhere.

3. A Transactional Relationship

Instead of fostering collaboration, the commission model promotes a “churn and burn” mentality. Agencies focus on placements, not partnerships, leading to short-term wins but long-term dissatisfaction.

4. Internal-Agency Friction

Internal recruiters often feel overshadowed by agencies that take credit for successful placements, creating an “us vs. them” dynamic. This adversarial relationship prevents the alignment needed to achieve hiring goals.

The Divide Between Internal and Agency Recruiters

Internal recruiters are uniquely positioned to understand their company’s culture, goals, and long-term needs. Agencies, however, are often viewed as outsiders who swoop in, take credit, and leave internal teams scrambling to manage the aftermath if a hire doesn’t work out.

This divide is exacerbated by the traditional model, which pits agencies against internal teams instead of aligning them. But it doesn’t have to be this way.

A New Model: Making Internal Teams the Heroes

The best recruitment partners understand that their role is to support and empower internal recruiting teams—not to take the spotlight. When agencies shift their focus to making internal teams the heroes, everyone wins.

1. The Agency as a Partner, Not a Competitor

Instead of competing with internal teams, a modern agency model should position itself as a partner. This means working alongside internal recruiters to enhance their processes, share expertise, and provide the support they need to succeed.

2. The Goal: Elevate, Not Overshadow

The true measure of an agency’s success should be how well it helps internal teams shine. When internal recruiters are empowered to achieve their hiring goals efficiently and effectively, the credit rightly belongs to them.

3. Tailored Support for Unique Needs

No two organizations are the same. A great recruitment partner takes the time to understand what level of support each client needs, whether it’s sourcing candidates, refining processes, or providing strategic guidance.

4. Cost-Effective, Hourly Pricing

Commission-based fees create unnecessary financial strain and misaligned priorities. Agencies that charge hourly rates eliminate this pressure, focusing instead on delivering value. This approach ensures organizations only pay for the support they need, without inflated costs.

The Future of Recruitment: Collaboration, Not Competition

The global recruitment market is expected to grow from $757 billion in 2024 to over $2 trillion by 2032, reflecting a compound annual growth rate of 13.1%. (Business Research Insights)

With this growth comes an opportunity to rethink outdated practices. Organizations must prioritize collaborative recruitment models that align internal and external efforts.

What to Look for in a Recruitment Partner

To break free from the traditional model, organizations should seek partners who:

• Charge hourly rates, not commissions. This ensures costs are aligned with the value delivered, not driven by arbitrary placement fees.
• Tailor their approach. A good partner adapts to your unique needs, offering the right level of support to complement your internal team.
• Empower your internal recruiters. The goal is to make your internal team look good by providing resources, expertise, and strategic guidance.
• Focus on long-term fit. Quality placements aligned with company culture and goals should always take precedence over quick fixes.

The Shift We Need

The outdated agency model isn’t just a relic of the past - it’s an obstacle to progress. By focusing on collaboration, transparency, and empowerment, recruitment partners can help organizations build stronger teams and eliminate the unnecessary friction that has plagued the industry for decades.

The right partner doesn’t compete with your internal team - they elevate it. The future of recruitment is about making the internal team the hero of the story, ensuring they have the tools, resources, and support to succeed. It’s time to leave behind outdated practices and embrace a new way forward.