Pros and Cons: Difference between Internal and External Recruitment

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Pros and Cons: Difference between Internal and External Recruitment

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Employees are the core of any business and aiming to bring on high-quality talent will push your business in the right direction. 

To bring on this kind of talent, you need to implement a proper hiring strategy. A new hire doesn’t always have to be outsourced in. Sometimes some of the best employees are found internally. 

It’s important to understand the difference between internal and external recruitment to decide which strategy would work best to ensure you retain your employees.

This article will go over the pros and cons of internal and external recruitment that will help you make the smartest hiring decisions.


Internal Recruitment

Internal recruitment happens when you hire from within. This could mean promoting a current employee to a new position or accepting referrals from other employees.

When looking to fill a higher position, you may find it more valuable to promote an existing employee rather than onboarding a new one. It makes more sense to promote internally because you already have a sense of the employee and their individual strengths and attributes that would make them qualified for the position. 

On the other hand, when you look to promote an open position internally, existing employees can refer qualified candidates. This option is a popular strategy when you are in a time crunch. Typically, companies may offer a referral bonus if you referred an employee and they stay with the company for a certain duration of time.


Benefits of Internal Recruitment

Here are some of the reasons why you would lean towards recruiting internally vs externally:

  • Less money spent on training costs - When you leverage your current employees, you can save a significant amount of money. Though there may be specific training for the new position, you will still end up saving by not having to onboard and train a new employee.
  • Promotes employee morale - When individuals know there is opportunity for advancement, it will help boost employee’s motivation and passion to grow professionally. Employees are more likely to look elsewhere if they feel stuck in a position and there is no room for growth.
  • Less money spent on job posting and recruiting - Recruiting from within means cutting costs spent on advertising for open positions.
  • Impacts employee retention - Employee turnover is bound to happen at some point, but it’s important to make sure your company is doing what they can to keep turnover rates low and retain high-quality employees like what is discussed on this website. With internal recruiting, employees will be more inclined to stay long-term because they feel valued and want to create a professional path within your company.


External Recruitment

External recruitment is the process of recruiting and onboarding qualified candidates that are not currently employed at your company. This is typically the most used form of recruitment. 

You can recruit new candidates to your company by posting on job boards, creating an open position page on your website, promoting via social media, or hiring a recruiting manager to do outreach and find qualified candidates. 

The external recruiting process requires more time and money spent but can be extremely rewarding. 


Benefits of External Recruitment

Though internal recruiting has a lot of great benefits, external recruiting can be equally as beneficial. Here’s why:

  • Larger candidate pool - External recruiting gives you a wider candidate pool than filling a new position with an existing employee. You’ll have more potential candidates to choose from when it comes time to fill an open position. It’s also helpful to keep a database of all qualified candidates you have communicated with. If a candidate stood out but didn’t end up getting the position, you can keep them in your database and reach out when another position opens. 
  • Brings fresh and new minds to your company - Every employee you hire will bring their unique perspective to your business, which is one of the main benefits of external recruiting. These kinds of employees will be essential in the development of your company. 
  • Business growth - Of course, bringing on external employees is going to grow your business. As your business continues to grow, you can start to use this as leverage to establish your company as a positive and reputable place to work, which in turn will continue to attract high-quality candidates.


In Summary

Using internal and external recruiting strategies to onboard employees each have their advantages. Depending on your company’s needs and specific circumstances, you can decide which option works best for you.

Updated 12:33 PM UTC+8, 15 Dec 2019
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Samantha Rupp
Samantha Rupp
Contributor
 
Samantha Rupp holds a BS in Business Administration and is the HR Editor for 365BusinessTips.com. She lives in San Diego, California and enjoys traveling, spending time on the beach and reading up on business industry trends.
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