Modern companies and businesses have a constant demand for high-quality employees, and only 36% of organizations rely on an internal hiring method. Is it less effective and what recruitment method should you choose to succeed in your hiring process?
It is not a secret that there are both internal and external sources of recruitment, and each of them has its advantages and possible drawbacks. Let’s find out what makes each recruiting method special and which one works the best to help businesses make the right choice!
What is Internal and External Recruitment?
The first thing to be clarified in this article is how to define external vs. internal recruitment, and what the main difference between them is.
Internal Recruitment is a procedure of filling vacant positions from within the company’s staff, and making these positions available only to current employees. It is mainly used by large, often global companies with a large number of employees.
External Recruitment is a process of filling vacancies with employees sought outside the company from the available pool of candidates globally. This method is suitable for businesses of any size, especially those that are Bandwidth Limited, where internal hiring is not an option.
So the main difference between these methods of recruiting is the source where a company seeks job candidates to fill their vacant positions. Naturally, each of them has some benefits and drawbacks. Let’s discover more about each of them and whether or not you can combine them to achieve your hiring goals.
The Main Nuances in the Recruiting Process
A full cycle of recruiting consists of 6 stages, no matter what method you choose.
- Preparation. Gathering information from a hiring manager, identifying the necessary skills and qualifications of the potential employee, and developing a job description.
- Sourcing. Choosing a sourcing channel (internal, external, or a combination of both).
- Screening. Includes 3 stages, including resume screening, phone or chatbot screening, as well as pre-selection.
- Selecting. Sending assignments, arranging interviews, and providing feedback on every candidate.
- Hiring. Doing a reference and sometimes a background check, and making a final hiring decision.
- Onboarding. A pre-boarding period may involve sending an employee handbook, inviting them to team activities, sharing information about the first working day, etc.
If you compare this procedure in internal and external recruiting, you can conclude that it’s faster and requires less effort to deal with people who are already working for the company, and external recruitment allows for finding more accurate and qualified matches for each position. However, these are only some of the advantages) you can spot using each recruitment method. Therefore, it’s time to dig deeper and discover other benefits and disadvantages, in order to see what works best for your business.
External Hiring: Definition, Advantages, and Disadvantages
External recruitment includes several effective methods of accessing a deeper talent pool and getting the best candidates. The most effective of these are described below.
Advertisements
A popular way to find lots of candidates is by placing ads on radio, TV or print media. Though it’s a little bit of an outdated method being used in the era of the Internet, they’re still used to attract applicants and showcase the company. Such adverts can be industry-targeted and get access to a wide local audience in a specific area. They contain a job description, employer identification, and the procedure for making applications for the position.
Employment Exchanges
Employment exchanges have been created according to the Employment Exchanges Act, 1959. All companies having 25 and more employees have to notify such exchanges before their vacancies are filled. This organization helps employers to get access to a larger pool of candidates and avoid preliminary screening, as this is already done for them.
Employment Agencies
Employment agencies,which are also known as staffing, recruiting, job or hiring services, perform one important function — they help to connect job seekers with hiring managers. They deal with an impressive number of recruiting tasks, making it easier to find a suitable employee and get qualified and skilled candidates in a specific discipline.
When it comes to IT and tech specialists, the best agency to turn to is called Staffing Partner. It has an extensive database of the best tech talent and provides a wide range of services for fast and effective global recruitment.
When it comes to IT and tech specialists, the best agency to turn to is called Staffing Partner. It has an extensive database of the best tech talent and provides a wide range of services for fast and effective global recruitment.
Campus Recruitment
Many companies prefer to seek young talent in the places where they get an education. Recruiters take advantage of the opportunity to visit popular colleges, institutes, and universities, since they have a large pool of potential candidates who would probably be interested in employment. Of course they’re usually good candidates for career internships and entry-level positions.
Contractors
Temporary workers are usually recruited by contractors. It’s a good choice for companies who don’t need to hire permanent workers, so such employees aren’t added to company records. Such contracts are signed for either a short or long-term period. One more thing to keep in mind is that these workers have some autonomy and flexibility, as well as being ineligible to receive benefits that other workers do.
E-Recruiting
Many modern industries benefit from tech advancements and AI, so external recruitment vs. internal promotion can take place, thanks to the use of online platforms. E-recruiting allows for the electronic screening of candidates, and directs them to a special site to have their skills assessed, have background checks conducted, be interviewed, and manage the whole hiring process.
Word-of-Mouth
Referrals have always been an effective way to find talent. People tend to recommend candidates they know, trust, and consider reliable workers, so they are hired more often than others and also have a better retention rate. It’s also a good way to limit the number of potential candidates to consider and significantly saves on the company’s advertising budget.
Advantages and Disadvantages of External Recruiting
If you compare internal vs. external recruitment, you can spot that the latter has many more advantages. Let’s see why so many businesses prefer the method of external recruitment.
A Large Number of Candidates
You can select from a larger pool of candidates and increase your chances of attracting more qualified and skilled applicants. When you can select from more prospects, you can be more selective and have a much higher chance of finding suitable talent.
View from a Different Angle
A new employee will bring new perspectives to your company. This person can suggest new ways of improvement and development, as well as offer you professional recommendations to make your business grow.
Increasing Diversity
Workplace diversity brought about by external recruitment can improve creativity, bring new ideas, enhance the overall culture, contribute to the company’s reputation, and improve the problem-solving skills of the team.
Suitable Experience
The chances that the existing employee has enough experience to take another position within the same company are minimal. However, this method allows for finding a person who has already dealt with similar responsibilities and can share this valuable knowledge with the rest of the staff.
Boosting Employee Loyalty Through Referral Programs
External recruitment allows for rewarding existing personnel if they help to find a necessary professional. Such referral programs build bonds between employees and helps them feel necessary and important.
High Level of Competitiveness
New people come with fresh ideas and strategies that can improve the existing practices in the company. They can provide insights from their previous experience and keep up with the latest trends, making the organization more competitive in the market.
Reducing Tension between Employees
Internal sources of recruitment may be a reason for tension among current employees, since several of them can compete for a vacant position. Fortunately, this challenge is excluded in the external hiring process.
Disadvantages of External Recruiting
Unfortunately, this recruitment method isn’t perfect, so organizations should be ready to cope with any possible challenges as defined by its potential drawbacks.
Increasing Costs
The cost of external recruitment is higher, since it is always connected with utilizing additional hiring and advertising services, as well as having more work to be completed. However, there are ways to lower its cost as well, by automating the recruiting process and so on.
More Time for Employee Adaptation
It is a common truth that new employees always have a transition period when they join a new company. It may take several weeks for a person to adjust to a new place of work, different requirements, and an unfamiliar team. He or she needs time to learn company practices and its existing strategies. Naturally, this may result in a productivity dip.
Talent Sourcer vs. Recruiter: What’s the Difference?
Internal Hiring: Definition, Advantages, and Disadvantages
Many companies consider internal sources of recruitment a symbol of success, but not all businesses can afford to lose an expert on one team in order to fill a vacancy on another. Is it a good idea to give growth opportunities to current employees and how does this usually happen? Discover now!
Present Employees
One of the most popular internal sources of recruitment is your current company personnel. It is not a secret that many employees look for promotion and new opportunities within the same organization, and there are several benefits from using this model. It improves internal public relations, encourages ambitious employees, offers the availability of this individual’s performance, cost-efficiency, and employee familiarity with the organization. It’s recommended that HR departments build personnel records to track people who have potential and to develop skill banks to see what skills are possessed by every employee.
Former Employees
It is a popular trend when retired employees decide to return to the company they used to work at but to another position. It can be a full or part-time job that allows former workers to get higher salaries, even if they left a company beforehand. The benefit of this method is that an employer knows how this person performs and what background he or she has.
Employee Referrals
Internal recruitment and external recruitment are combined in using an employee referral method. The existing workers recommend their family members or friends for vacant positions. They encourage the people that are close to them to apply for a job and they explain the benefits of working in the company as well. There is statistical data that confirm that referred employees are hired much more often and have a better retention rate as well.
Previous Applicants
Another method that seems to fit both internal and external recruitment is the hiring of previous applicants. Though you recruit people from outside the company, they are still considered internal applicants since their documents are already in the company files. They can be contacted by HR representatives to cover vacancies where they can be better fits than they previously were.
Benefits of Internal Recruiting
When it comes to internal recruitment sources, they also have their strengths and weaknesses. However, the range of negative features outnumbers potential advantages significantly. Let’s have a closer look at them!
Lower Costs
Internal recruiting costs are organizational and internal expenses spent on a referral program. Usually, they’re much lower costs since you don’t need to pay money for outside services such as job boards and agency fees, as well as costs associated with a background check service.
Complete Recruiting Control
When you promote a person you’ve already worked with, you know what kind of employee you’ll get. The recruitment team is familiar with this person’s work, and the administration of the process is simpler as well.
No Conflict of Interest with Candidates
The person you hire is already familiar with their team members, processes, and organizational behaviors. So there is a very small chance that any conflict or contentious competition will occur.
Disadvantages of Internal Recruiting
Despite the fact that an internal source of recruitment has some benefits, there are also some downsides associated with it. What are they you may wonder? Here are points to consider.
Creates an Unhealthy Atmosphere of Competition
Probably any employee has possibly faced a situation with jealousy and anger from candidates who are refused a promotion. This situation may lead to changes in treatment from coworkers and even lead to conflicts. In some cases, a new supervisor will face difficulty in earning respect from former equals, while managers can feel uncomfortable when they need to reject an applicant.
Leaves Gaps in the Workforce
By an employee from a specific position, you leave a hole in your team. It can cause disruption in business operations and a necessity to turn to external recruitment to fill the job.
A Limited Number of Candidates
When you decide to recruit internally, you should understand that your pool of candidates is rather limited, and you may miss out on a worthy candidate with the necessary set of skills and qualifications. Naturally, progress and innovation will be brought to a standstill if this happens!
Promoting an Inflexible Work Culture
Personnel may feel comfortable by continually using the existing practices and approaches that they are used to. This inevitably leads to routine and a lack of development and creativity.
Stopping Company Growth
By refusing to consider external candidates, a company also loses its chance to grow and develop. As a result, it lacks new creative ideas, a fresh look at existing conditions, and competitiveness in the market.
Increasing Employee Burnout
Internal recruitment leads to difficulty for hiring managers to be fair and objective in choosing their new candidate. When they dare to reject any applicant, he or she can feel a huge degree of disappointment and resentment that can ultimately result in burnout.
Final Words
It makes no sense to deny the effectiveness of both internal and external sources of recruitment, since what is good for one company can be a disaster for another organization. However, analyzing the whole range of pros and cons each method has, you can conclude that external recruitment looks more preferable, effective, and success-oriented, especially if you use professional assistance in this crucial task.
Getting the right tech candidate easily and quickly is possible when you turn to Staffing Partner for assistance. Our company will meet your expectations regarding a potential candidate as accurately as possible for you to forget about all the many challenges of the hiring process through ordering our high-quality services!
FAQ
Internal recruitment is the process of filling vacant positions with current employees by sourcing talent from other departments and teams within the same company.
In external recruitment, a suitable applicant is sought outside the company.
There are several benefits of using a company’s own resources to source talent, including the reduction of recruitment time, cost efficiency, and stronger employee engagement.
It is necessary to assess the existing talent pool, and only then identify employees who are ready and willing to develop and then create opportunities for that to happen. If there aren’t any suitable candidates, the vacant positions can be filled with external talent.
Experts differentiate two main factors to consider when it comes to the choice between internal and external recruiting — the quality of candidates and the cost of hiring them. It is also useful to consider the current talent pool and the needs for the new position to understand which choice is better for you.
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