Internal vs external recruitment: Should I promote or procure talent?

Should I hire internally or work with a recruitment partner?

 Internal recruitment might be your best option when you want to promote existing employees who already understand your company's culture and processes.  This approach can boost morale and provide current employees with growth opportunities.

On the other hand, external recruitment introduces fresh perspectives and can help fill gaps in skills that your current team might lack. 

Understanding the strengths and weaknesses of both methods can help you make an informed decision and guide you in choosing the right path for your recruitment needs. 

Defining internal and external recruitment

So, exactly what is internal recruitment? It refers to hiring from within your organisation by promoting or transferring existing employees. This method leverages an already familiar talent pool, making transitions smoother and quicker. 

External recruiting involves hiring candidates from outside the organisation through job boards, networking, recruitment agencies, and employee referrals. This expands your pool of applicants and introduces new perspectives and skills to the company. 

Both approaches have their place, and the right choice depends on your business needs, the urgency of the hire, and the role’s requirements. 

Recruitment methods and processes

Your recruitment methods are crucial in determining the quality of candidates you attract. Internal hiring methods may include job postings on company bulletins or internal recommendations. These methods are usually quicker since you aim to fill positions with current employees, who require minimal additional onboarding. 

Various methods, such as advertising on job boards, social media, or recruitment agencies, can be used for external recruitment. 

 The hiring process may include steps like creating job descriptions, screening resumes, and conducting interviews. Recruiting externally can be complex but allows you access to a vast pool of candidates, potentially leading to discovering exceptional new talent. 

Advantages of internal recruitment

Enhanced employee morale and engagement 

Internal promotion clearly signals that hard work and dedication are valued, motivating employees to stay and grow within the company. When team members see colleagues advancing into senior positions, it reinforces a corporate culture of development and long-term opportunity.

By investing in clear career paths, businesses boost employee morale and improve employee retention. Employees are likelier to remain with a company that prioritises their growth, providing them with the skills and opportunities needed to advance internally.

Reduced hiring costs and shorter onboarding time

One of the major benefits of internal recruitment is the reduction in recruitment costs and the time spent on onboarding. External recruitment often involves advertising, lengthy interview processes, and various assessments.  

In contrast, hiring internally usually skips several of these costly and time-consuming steps. You already know your staff's capabilities, which speeds up the hiring process.

Internal candidates generally require less onboarding time because they are familiar with company policies and procedures, saving time and resources. This efficiency makes internal recruitment appealing for roles that need quick filling. 

Strengthened career advancement and succession planning 

When you promote from within, it encourages workers to set clear career goals, knowing that career advancement is possible. This encourages staff to develop new skills, take on additional responsibilities, and plan for future leadership roles. Internal recruitment also ensures a smooth succession pipeline, reducing disruption when senior employees leave. 

Focusing on internal recruitment demonstrates a commitment to nurturing talent, which not only strengthens career development but also enhances employee engagement and satisfaction. A supportive environment for career progression can significantly increase overall job satisfaction and loyalty. 

Challenges of internal recruitment 

While internal recruitment has clear benefits, it comes with limitations: 

• Limited skill diversity – Your existing workforce may not have the skills required for specific roles. 
• Potential internal conflicts – Internal employees who are passed over for promotions may feel demotivated. 
• Role backfilling challenges – When an employee is promoted, another position within the company must be filled, potentially leading to a chain of internal hires. 

What are the advantages of external recruitment over internal recruitment? 

Access to a broader talent pool 

When you choose to hire externally, you open the door to a much larger talent pool. With more potential candidates to consider, you have a higher chance of finding the perfect fit for your role. This approach can include job seekers actively looking for new opportunities and those employed elsewhere but willing to switch roles for the right offer. 

External recruitment often involves networking events and partnerships with recruitment agencies. These methods provide access to candidates who might not apply through traditional job postings. By expanding your search beyond your existing team, you bring in individuals with varied experiences and skills, enriching your workforce's overall capability. 

Fresh perspectives and innovation

Bringing in external hires can inject new energy into your organisation by introducing fresh ideas and specialised skills that your current team may lack. Hiring externally allows you to tap into diverse skill sets, fostering innovation and enabling your business to approach challenges with greater creativity and agility.

Additionally, external candidates often bring insights into industry trends and best practices, helping you stay competitive. By filling job vacancies with talent from outside your organisation, you can enhance problem-solving, streamline processes, and build a more forward-thinking workplace.

Fulfils highly specialised skills requirements

There are times when the expertise you need simply isn’t available within your existing team. This is where external recruitment methods become essential, especially for a specialised role requiring rare or emerging skills. By broadening your search, you can attract high-quality candidates with the precise experience and knowledge needed to drive your business forward.

Hiring externally ensures your workforce remains strong and adaptable, ready to tackle complex challenges. Beyond filling immediate skills gaps, this approach also prepares your team for shifting industry demands, keeping your organisation competitive in an evolving market.

Challenges of external recruitment 

While external hiring can be beneficial, it also presents challenges: 

• Higher recruitment costs – Advertising, recruitment agency fees, and onboarding expenses can be significant. 
• Longer hiring process – It takes time to attract, screen, and onboard new hires. 
• Risk of cultural misalignment – New employees may take time to adapt to the company culture, and there’s always a risk they may not integrate successfully. 
  

Comparing internal vs external recruitment 

 Recruitment costs and efficiency 

Internal hiring tends to be more cost-effective. You save on recruitment marketing, external assessments, and background checks. Employees require minimal training, leading to a faster transition. 

While external hiring is often more expensive, it offers access to a wider range of talent. The investment can be justified when specialised skills are needed, as hiring externally may provide the expertise that internal candidates lack. 

Cultural fit and long-term retention 

Internal hires often have a deeper understanding of company culture and possess a network of relationships within the organisation. This can facilitate a smoother transition and integration into a new role, reducing the risk of bad hires. 

Although external candidates might require more time to adapt, they can introduce new ideas and help bridge skill gaps. They may also enhance diversity and invigorate the company culture with fresh energy and different experiences.  

Growth opportunities vs fresh expertise 

Each option carries its own set of risks and rewards. Internal hires offer the security of a familiar track record but come with the risk of creating internal conflicts if not everyone supports the decision. It also limits access to a wider talent pool, potentially missing out on more qualified candidates from outside. 

External recruitment can seem riskier due to the unknowns, such as cultural fit and employee performance. However, it offers the reward of enhancing the overall employer brand and bringing in potential candidates who might offer innovative solutions and a broader range of skills. The choice hinges on weighing these options carefully against your company's immediate and long-term needs. 

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