Internal vs external recruitment: what actually makes sense?

I was reading a post on LinkedIn the other day from a recruiter bemoaning a founder who had decided to take their recruitment from external to internal.

The reason? They were paying between $40,000–$60,000 per hire and had plans to hire at least 15 new roles in the near future. Instead of spending close to $700k on recruitment fees, they decided the better option was to hire an internal recruiter.

And honestly, it is.

What surprised me was the reaction from other recruiters in the comments. A lot of them were implying that unless the company found someone “very special”, they’d end up paying for recruitment twice over because there wouldn’t be the processes or infrastructure in place for an internal recruiter to succeed.

But the reality is, that’s just not true.

Recruiting isn’t rocket science (and no, I’m not talking down the profession - stick with me here). Building a solid recruitment process from scratch should absolutely be within the skillset of a senior recruiter, particularly someone with internal or start-up experience.

So why were agency recruiters so against the idea?

Well, because it’s bad for business to admit that someone else can probably do the same thing for a fraction of the cost.

If you’ve got a growing client regularly paying $40k–$60k placement fees, that’s the definition of a cash cow. Why would you want that gravy train to stop?

But the truth is that a good internal recruiter is almost always the better long-term option.

They know the business inside-out. They understand the culture, the personalities, the pace, the problems, and they can sell the opportunity to candidates far better than an external agency ever could.

And while specialist recruiters can absolutely add value on hard-to-fill roles, a strong internal recruiter can usually learn the market, build relationships, and create talent pipelines that are actually owned by the business, and not sitting in someone else’s database.

Also, let’s be honest: plenty of candidates are more likely to respond to a direct approach from a company than from a recruiter. There’s less suspicion, less back-and-forth, and no middleman.

So if recruitment is relatively straightforward and internal hiring is often the better option, why would a business ever use Hire Wisely?

Because most small businesses sit in an awkward middle ground.

They don’t hire enough to justify a full-time Talent Advisor, but they’re usually busy enough that expecting managers to handle recruitment properly becomes an administrative nightmare, and often leads to inconsistent hiring decisions.

Most are posting a job ad, replying to the first few decent applicants, and quietly ghosting everyone else. There’s no process, no talent pooling, no candidate care, and definitely no sourcing strategy.

And that’s not because they’re bad people. They’re just busy running a business.

That’s where external support still makes sense.

There’s a reason recruitment agencies exist, and they absolutely still have their place; particularly in volume hiring, temp recruitment, or genuinely niche markets.

But this idea that every good hire should come with a massive placement fee? That needs to die.

Especially in a market where unemployment is sitting above 5% and businesses are being forced to think more carefully about where they spend their money.

If you’re a small business owner who wants to think differently about recruitment, I’m here to help you hire wisely, and maybe kick a little agency dependency while we’re at it.