External vs Internal Recruitment

Internal vs External Recruitment

Hiring managers usually have two options when filling positions in a company. They can recruit internally – from the existing workforce – or they can recruit externally – from a new candidate pool. Each option has its own advantages and disadvantages, and it is important that a hiring manager knows which recruiting method would be best. This is especially true for executive job vacancies.

What is External Recruitment?

An external candidate is sourced from outside of the business – they do not already work for the company. With external recruitment methods; job boards and other advertising methods attract candidates from outside the company. For executive-level positions, many companies engage with specialized recruitment agencies rather than undertaking an executive search themselves.

What are the Advantages of External Recruitment?

External recruitment often saves time, and results in less of a training requirement because external candidates are more likely to already know how to do the job. New talent can also bring new energy and experience to the company culture. This has the potential of increasing problem-solving. Furthermore, external recruitment strategies mean a larger candidate pool to choose from and increase the likelihood that a hiring manager will encounter high-quality candidates.

What are the Disadvantages of External Recruitment?

While external recruiting brings in fresh new talent, it must be acknowledged that external employees take more time to adjust to their new roles. The process can also take a bit longer because the hiring team might want to know the potential candidates before making a final decision. The new employees would also need to familiarize themselves with the new job (if they are not already accustomed to the position) and the team they will be working with. The right candidate will be worth the effort, though.

Some other disadvantages of external recruitment may include:

Existing employees may resist the change

Adjusting to a new leader or coworker can be daunting for some people and might cause some resistance to the appointment of an external candidate.

Higher hiring costs

Internal recruitment tends to be less costly than external recruitment because hiring managers do not know external candidates. However, because specialized candidates can be sourced more easily from an external recruitment method, you might save training costs while spending a little more on the hiring process.

Adjustment Period for New Employees

In addition to hiring costs, there is also an adjustment period to consider. In the short term, an internal candidate tends to outperform an external candidate simply because they know the company and systems better. After the initial adjustment period, the external candidates will again begin to outperform internal employees.

External Recruitment Sources

There are several external recruitment methods recruiters can use to source talent. Many companies prefer to engage with a recruitment agency. This opens up an internal human resources department to use their resources more efficiently for daily tasks, while a specialized agency can ensure that only the best candidates will be presented for the job opportunity. External companies will also have access to a wider talent pool.

Here are some examples of external recruiting sources:

Passive Candidates

In many cases, the best candidates do not fall within the job seekers group and require head hunters or executive recruiters to seek out. Many such agencies already have passive candidates in their database that are ready for recruitment.

Referrals

References are also a great way to source trusted new talent. These recommendations can come from current employees or from other candidates that have recently been placed in similar positions.

Social Media

Word-of-mouth does not need to be the only social option through which to source candidates. Large groups of widely talented candidates can be contacted via social media. Specifically, sites like LinkedIn or specialized professional social networks allow companies to post jobs. It is also a great option for networking and outreach to potential candidates. Many company websites are even linked to LinkedIn profiles.

Job Boards

In addition to social media, a job website can be one of the best ways for a job seeker to access new positions. Most of these sites are free and allow for direct posting, including things like salary information and a detailed job description. Prospective candidates are often able to apply to positions directly on these sites, and a company website can also be linked.

What is Internal Recruitment?

At times it might make more sense to look for skilled candidates among the pool of current employees within the company. Such a candidate would already have relevant local experience and fit in with the company culture. The hiring team is able to save time because they are already familiar with the candidates.

What are the Advantages of Internal Recruitment

Choosing to recruit internally can have benefits beyond saving time.

Familiarity within the Company

An internal candidate is often already familiar with the existing workforce, and business environment, and the hiring manager is also familiar with the candidate. It is not uncommon for corporations to employ a number of young talent among their ranks, and hiring internally from that young candidate pool can raise employee morale.

Already fit into the Employer Brand and Culture

On the other hand, hiring someone from a job board can be risky simply because they might not fit into the existing culture of the workforce. A large candidate pool is good in certain aspects but can be a source of instability. There are usually a number of interested candidates within an existing workforce already.

It saves the Hiring Team time

In addition, not having to advertise job openings on job portals or engaging with external companies for assistance with the recruitment process can save both time and money. It is also likely that an internal candidate already has a good working relationship with the company as well.

What are the Disadvantages of Internal Recruitment?

When companies recruit externally, the party that is bought into the company is often relatively neutral, but with internal recruitment, it can be challenging for the hiring team to find qualified candidates, which can place pressure on the entire office. Steps also need to be taken to avoid upsetting other job candidates within the office. Other possible challenges may include:

Consider Company Policy

Some companies might have policies in place that negate managers’ opportunity to approach internal candidates about a job opening directly.

Disruptions in Office Politics

Furthermore, in many cases, office politics can have a major impact on decisions made with both internal and external recruitment. Unqualified candidates could receive recommendations from internal sources because of personal relationships. Hiring managers might also feel like they are taking a great employee from an existing posting and just moving them around.

Jealousy Among Existing Employees

This is especially true when several internal employees are candidates for the same promotion. Some can feel as if they were passed over, and this can cause a drop in morale.

Smaller Candidate Pool

Also, when a company looks for diverse skills, an external recruitment process might be better suited as internal pools can be quite small. In some cases, the limits can be good, but in most cases, there is a preference for a larger candidate pool.

Filling one Position opens up Another

Additionally, hiring someone internally means that the position they are hired from needs to go through the hiring process as well.

Internal Recruitment Methods

As discussed earlier, it takes much more time to recruit external candidates than recruiting internally. Using a job board or job portals is common with external recruitment; depending on the job description and the scale of recruitment required, external recruitment methods can go as far as attending job fairs to attract candidates. But the same options are not available for internal recruitment.

Approaching a Retiree for a Contract

Many corporations approach some former employees who have retired, to take on contract work. Experience remains with the company and can be utilized for smaller commitments.

Temp to Hire

Alternatively, hiring a candidate as a temporary employee allows a company to test out th candidate before appointing them permanently.

Internal Job Posting

When it comes to job posting, external recruiting takes place on a larger scale, but internal job postings can take much the same form on a smaller scale within the company. Even if an internal job posting platform is not available, a bulletin board will also do.

Promotion

Internal candidates are also most often sourced via promotions so that they may take the next step in their careers and advance within the company, so the company retains their skills. Many candidates will only join companies where promotion opportunities are strong.

Which Option is Best between External and Internal Recruitment?

The answer most often depends on the specific role for which a company needs to recruit. It is, therefore, essential to consider all advantages and disadvantages when deciding which route to choose in the hiring process.

Situations where it might be better to internally recruit candidates:

• The desired skills are already available within the company.
• There is an abundance of talent that wants to climb within the company.
• When company knowledge and cultural fit are more important than skills.

Situations where external recruitment might be better include:

• When new expertise and experience are needed.
• When a new direction for the team is beneficial.
• When a new perspective and creativity can be beneficial.
• When the business needs to grow.