It's December 2025, and companies are still having the same argument they've been having since recruiting became a profession: should we build an internal talent acquisition team or just throw money at agencies? Spoiler alert—there's no right answer, and everyone's still mad about it.

The Eternal Question

Every CFO wants to know why they're paying 20-25% fees to recruiters when they could just hire someone in-house. Every overwhelmed internal recruiter wants to know why leadership won't approve agency help when they're drowning in reqs. It's a tale as old as time, and SHRM research shows that 68% of companies use a "hybrid" model—which is basically code for "we haven't figured it out either."

Bullhorn's 2025 Recruitment Report found that companies spent an average of $385K on agency fees this year, while maintaining internal TA teams averaging 4.2 recruiters. That's a lot of money going in multiple directions, and executives are starting to ask uncomfortable questions about ROI.

When In-House Makes Sense (Maybe)

Internal TA teams shine when you've got steady, predictable hiring needs and roles that require deep company knowledge. If you're hiring 50+ people a year in similar functions, the math on building an internal team starts to work. LinkedIn Talent Solutions data shows that internal recruiters average 32 hires per year at a cost-per-hire around $4,200—significantly cheaper than agency fees.

Plus, internal recruiters understand your culture, your dysfunction, and which hiring managers are impossible to work with. They can spot red flags in candidates that agencies might miss because they're incentivized to close the deal. And they stick around to see if their hires actually work out, which creates accountability.

But here's the catch: internal teams get maxed out fast. HR Dive reports that the average corporate recruiter is managing 35-40 open reqs at once. At that point, they're not recruiting—they're drowning. And when they're drowning, roles stay open for months, hiring managers get frustrated, and suddenly agencies look pretty appealing again.

When Agencies Make Sense (Also Maybe)

Agencies are expensive, but they're expensive for a reason. They've got networks, they move fast, and they'll work nights and weekends to close a search because their commission depends on it. For specialized roles, executive searches, or sudden hiring surges, agencies are often the only viable option.

Staffing Industry Analysts found that agencies fill roles an average of 18 days faster than internal teams, particularly for senior and specialized positions. When time-to-fill directly impacts revenue, that speed is worth the premium.

The downside? Agencies don't always care if the hire works out long-term. They care if the hire gets past the guarantee period (usually 90 days). Quality can be inconsistent, and you're paying for speed and access, not necessarily cultural fit or retention. Some agencies are phenomenal partners; others are resume-blasters hoping something sticks.

The Hybrid Chaos Most Companies Actually Live In

The reality for most companies is messy: internal teams handle high-volume and core roles, agencies handle specialized positions and overflow, and everyone's slightly annoyed about the arrangement. Aptitude Research found that 71% of companies describe their recruiting strategy as "evolving," which is corporate speak for "we're making this up as we go."

Leadership wants the cost savings of internal teams with the speed and specialization of agencies. Recruiters want realistic req loads and the flexibility to use agencies when needed. Agencies want consistent partnership instead of being treated like a last resort. Nobody's getting exactly what they want.

The 2025 Reality Check

As the year ends, here's what's clear: the agency vs. in-house debate persists because there's no universal solution. Company size, industry, hiring volume, budget, and growth stage all factor in. A 50-person startup has completely different needs than a 5,000-person enterprise.

The companies winning at recruiting in 2025 aren't the ones who chose one model or the other—they're the ones who figured out their specific needs and built a strategy around that reality. Maybe that's a strong internal team with agency support for specialized roles. Maybe that's agencies for everything because the company's growing too fast to build TA infrastructure. Maybe it's something else entirely.

What definitely doesn't work? Doing the same thing you did in 2015 and wondering why it's not working anymore. The recruiting landscape has changed. Your strategy should too.

The debate will rage on into 2026, because that's what we do in this industry. But at least now you know why nobody can agree on the answer—because there isn't one.