4.6 Internal vs External Recruiting

Recruitment Plan

When devising a recruiting plan, an essential element is whether the pool of candidates will be internal, external, or both. Both options have pluses and minuses. Hiring internally sends a positive signal to employees that they can move up in the company—a vital motivation tool and a reward for good performance. In addition, because an internal candidate is a known quantity, it’s easier to predict his or her success in a new position. On the other hand, you’ll probably have to fill the promoted employee’s position. Going outside allows you to bring fresh ideas and skills into the company. In any case, it’s often the only alternative, especially if no- one inside the company has the right combination of skills and experiences. Entry-level jobs are usually filled from the outside.

Internal Recruitment

Assuming the job analysis and job description are ready, an organization may look at internal candidates’ qualifications first. Internal candidates are people who are already working for the company. If an internal candidate meets the qualifications, this person might be encouraged to apply, and the job opening may not be published. Internal recruitment is often the most cost-effective method of recruiting potential employees, as it uses existing company resources and talent pool to fill needs and, therefore, may not incur any extra costs.

External Recruitment

External recruitment focuses on searching outside the organization for potential candidates and expanding the available talent pool. The primary goal of external recruitment is to create diversity and expand the candidate pool. Although external recruitment methods can be costly to managers in dollars, adding a new perspective within the organization can bring many benefits that outweigh the costs. When recruiting externally, an understanding of the labour market is essential. External recruitment can be done in various ways, which we will discuss later in this chapter.

Advantages and Disadvantages of Each Approach

In summary, both approaches to recruitment are valid, each providing distinct advantages to the organization. The selection of one or both approaches depends on the situation (e.g., labour market, availability of internal talent, budget, etc.) and the company’s objectives.

Here is a summary of the advantages and disadvantages of each approach.

“5.2 Recruitment Plan – Internal and External” from Human Resources Management – 3rd Edition by Debra Patterson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.—Modifications: Edited; Added additional HR content.