Internal vs External Recruitment

 

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Finding the right Candidate is essential to ensuring the success of an organisation. Effective hiring practices can save your organisation’s time, money and other resources. 

In order to find out the effective recruitment method it is required to analyse between two main Recruitment strategies;

            

           Internal recruitment

           External recruitment

Both of these types have benefits and drawbacks in terms of recruitment. Ultimate objective should be finding the best applicant for the position

What is Internal Recruitment?

Internal recruitment is the process of filling open positions of an organisation  from its existing employees. 

Methods of Internal recruitment

• Promotions
• Transfers
• Recruiting Former Employees
• Internal Advertisements (websites, , newsletters, email notifications)
• Turning part-time or contract-based employees into full-time and permanent employees

 

What Are the Advantages of Internal Recruitment?

Saving Time - Can save time spend on  identifying, attracting and engaging candidates. Since applicant’s already works for the organization, have to complete few steps.

Shortens the Induction Process – since Internal hires are already acquainted with the culture, procedures, and personnel of the organization no requirement to have regular induction . Only the knowledge about their new role and responsibilities would sufficient.

Cost-effective – The expenses has to be incurred during external recruitment such as payments for recruiting agencies, paying for ads, cost to buy recruiting software, etc.. can be eliminated.

Improve Employee Morale – giving more opportunities for career advancement will motivate the employees and boost their moral. It will lower your turnover rates and encourage staff to work harder in the hopes of getting promoted. It will eventually contribute to the development of strong connection among staff members, which will be advantageous for the company in the long run.

(Barcelos, 2019)

Drawbacks of Internal Recruitment

Gap in workforce – when fill one vacancy internally, another vacancy will be created. Thereby have to fill multiple vacancies.

Lack of skills – Exiting staff of the organization may not be the ideal fit for a vacant position. Therefore would require person with new ideas and skills.

Stagnancy - Instead of rethinking things and utilising new approaches, existing employees are more likely to stick with the same methods and approaches. They may not able to identify operational inefficiencies and find it difficult to innovate.

Increased Training Costs – In external Recruiting, organization can hire a candidate with all the necessary abilities, qualities, and experience but for current staff training needs to be provided.

(Barcelos, 2019)

What is External Recruitment?

External recruitment is when an organisation seeks candidates from outside the firm to fill open positions.

Methods of External recruitment

• Advertise vacancies on online job boards
• Use of recruiting soft-wares
• Employee referrals
• Company website
• Recruitment agencies
• Attending Networking events in the industry
• Social Media

What Are the Advantages of External Recruitment?

Selecting from more candidates - Can find larger pool of potential candidates for the vacancies Outside the company, c. Therefore have the opportunity to go through large number of resumes and find qualified and successful applicant easily.

Adding fresh perspectives - Recommendations and opportunities for improvement can be found with the aid of a fresh perspective. Since new employees approach the company differently than existing employees ,this might result in good improvements in their department and the organization.

Enhancing Diversity - Incorporating different views can lead to innovation and better practices. 

Specialized candidates – Outside the organisation , can find candidates with more relevant training and experience for the position need to fill. If organisation solely use internal applicants it will limit the options available to select skilled individuals who are expertise in particular area, which may result in higher training costs. When search externally, will able to find applicants who already have the specialized training and experience requires.

Ideas from other organisations – Candidates recruited externally can contribute ideas, techniques from their prior expertise and also insights from other companies or industries that can apply to improve the organisation. 

(Indeed Editorial Team, 2023)

Drawbacks of External Recruitment

Higher cost  - Usually Cost on External Recruitment is higher than  Internal Recruitment. Organisation may have to pay for Advertising, membership fee for job searching sites, Recruiting service. Also for the HR team who spend more time for recruitment process.

Cost / time for Training – Organisation has to incur additional time and cost for Induction and procedure related trainings. Also during the training period the productivity of the employee will be at lower level.

Adds Transition period – It can take few weeks for a new employee and to other in the department to adjust for each other and also for new employee to learn organization practices. This can lead to a reduction in productivity during the period.

Affects to the employee morale-  When existing employees awaiting to get promotion and if the organisation recruited an external candidates for the position, then the existing staff may become frustrated, which could harm morale and loyalty.

(Indeed Editorial Team, 2023)

Conclusion

Both internal promotion and external hiring have significant advantages and disadvantages.Therefore it is important to assess position objectives: What kind of influence do you want this person to have on your business?

It is the responsibility of HR team to select between internal or external methods of recruitment, according to the organisation's requirements.

References

Barcelos, K. (2019) Internal vs External Recruitment: Weighing the Pros and Cons. [online] Jobsoid. Available from: https://www.jobsoid.com/internal-vs-external-recruitment/ [Accessed 20 April 2023].

Indeed Editorial Team (2023) The Advantages and Disadvantages of External Recruitment. [online] indeed. Available from: https://www.indeed.com/career-advice/career-development/advantages-external-recruitment [Accessed 20 April 2023].