Internal vs External Recruitment: Which One Is Better?

July 13, 202112:04 pm1257 views
Internal vs External Recruitment: Which One Is Better?
image source: rodnae via pexel

Every recruiter goes to work in the morning with a mission: provide the best recruiting experience and source top talents. When it comes to filling out vacant positions, ideal candidates can come from anywhere. It could be someone applying for the job ads, a man you just met on the elevator, or even that new hire from a different department. In other words, you can choose between internal and external sources for recruitment. 

But what exactly are the differences between these two? And which one is more suitable for you, as a recruiter, to source employees? 

Internal Recruitment

As the name suggests, internal recruitment relies on filling vacant positions from the existing workforce. In most cases, recruiters conduct internal hiring for positions that require an insider’s view or knowledge. This type of recruitment also encourages loyalty and a sense of progress for employees. Several methods that can be used when hiring internally are as follows:

  • Transfer

Transfer is a method of internal recruitment involving an employee to shift from their current role to a vacant position. Transferring individuals from one position to another does not involve any change in rank, responsibility or prestige. Some companies favor this method as it leverages an employee’s experience in a different department. It also minimizes employee turnover, as the number of employees remains the same.

  • Promotion

Promotion is shifting particular employees to a higher position within an organization with better prestige, more responsibilities and higher salary. Similar to transfer, promotion does not increase the number of headcount. Promotion recognizes and promotes employee performance and motivation, which makes it a viable internal recruitment method for many. Moreover, promoting current employees to a higher position saves up much time, as they are already familiar with the company’s culture and environment.

  • Employee Referral

Employee referral is a method where recruiters leverage existing employees to find qualified candidates. Unlike the previous practices, employee referrals add the number of employees in the company. Recruiters often rely on this method as current employees can at least vouch for the candidates they refer. In some cases, rewards may also be given to current employees if the referred candidates are hired by the company.

Advantages of Internal Recruitment

Hiring from internal sources means the company gets little to zero new team players, making collaboration more efficient. Other than that, here are other benefits of internal recruitment.

  • Cost and time-effective

By recruiting from within, your company can save much time spent for training. Current employees that get transferred or promoted have already known the operating procedures and policies of the company. Unlike new recruits that need to go through a training and onboarding process, existing employees only need to be trained for hard skills for their new positions. On top of time efficiency, internal recruitment can save up the budget that may be spent if you opt for external recruitment to advertise job vacancies and hire headhunters. 

  • Promoting loyalty

Internal recruitment helps increase morale among employees. Staying within one company for a long time will be less mundane and more challenging if employees know that they can grow their career. By offering an open career development, it cultivates employee loyalty as they are  given room for both improvement and promotion. 

Read Also: How Internal Talent Mobility Can Help Retain Talent and Attract Great Hires?

External Recruitment

When hiring managers bring in completely new talents outside the company, it means they are practicing external recruitment. This type of recruitment can be done if the company has the capacity of adding the number of employees, or they favor new additions in terms of talents and insights. There are many sources of external recruitment, but the major three are as follows:

  • Advertisement

Advertisement is the most popular method of external recruitment. Traditionally, job opportunities are advertised in conventional media like newspapers or pamphlets. But in today’s era of the Internet, more employers are posting their vacant roles on job sites and social media. This method is often used to recruit skilled workers because advertisements can attract applicants in a large number of highly variable quality. Thus, hiring managers can have a wide range of selections, although sorting out these applications may take time.

  • Recruitment agencies

When a company demands precision, then recruitment agencies are the go-to choice for external recruitment. Hiring an agency to recruit candidates can save you the hassle of filtering hundreds or even thousands of job applications. If you require specific services, you can go to head-hunting management consulting. This type of agency specializes in middle-level and top-level executive placements. Agencies deliver thorough investigations in the hiring process by canvassing their contacts and doing preliminary screening. This is done to ensure that your company gets the best candidates.

  • Institutions

Educational institutions such as universities have gained prominence in becoming a quality talent pool for recruitment. Campus hiring enables recruiters to select candidates from specific fields of expertise that are usually in line with their education background. Management trainee program, in collaboration with universities, can also be an option for recruiters to obtain candidates for junior level executives or managerial trainees.

Advantages of External Recruitment

Recruiting from external sources may cost you more than internal recruitment in terms of time and budget. However, there are some benefits of external recruitment which will make all the time and money spent worth it.

  • Precise match for your criteria

External sources offer a wide choice of selection that your company may have never seen in current employees. Having more candidates means that you get more possibilities in finding the one that fits your criteria perfectly. Instead of training your current employees who have little to no expertise in their new assigned role, you can directly place an expert in that field. 

  • Attracting new talents and insights

Expect new skills and new ideas that new team players bring to your business. External recruitment attracts a variety of applications from candidates with varying work experiences. Some of them may be fresh graduates with little experience, but they offer big ideas. The others may have prior work experience in your competitor’s company, thus giving you a wider view point.

So, which one is better: internal recruitment or external recruitment? Correct answer is that neither is better or worse than the other. Recruitment method depends on what your company needs and how much it is willing to spend in terms of time and budget. Finding a suitable candidate for a vacant position begins with knowing what sources are available within and outside of your company. Now that you already know about these sources of recruitment, you have the liberty to wisely decide which one you will go for!

Read Also: 10 Ways to Attract & Retain Top Talents