Internal vs External Recruiting

Internal vs External Recruiting

Wilson Cole

Many new positions and opportunities are emerging due to today's rapid expansion and market growth. Over the last year, a surge in job creation has resulted in a workforce shortage. Companies must pay close attention to upgrading their recruitment process if they want to thrive and compete in this ever-changing climate.

Recruiting is something that every company needs to think about, whether it is to fill a vacancy, staff a new position, or plan for management succession—the economy, site expansions, mergers, and competitive action all impact hiring decisions. An employer must assess the primary purpose of the post, the financial and operational reasons for creating or filling a vacant position, and whether the job tasks could be absorbed by existing workers when developing a business case for recruitment. If a post is not created or replaced, the firm may incur financial costs, and HR professionals must be prepared to articulate this impact.

Managers will need to evaluate their recruitment methods to fill open positions sooner or later. When faced with this dilemma, managers must decide whether to promote from within or hire new personnel from the outside to fill available jobs.

The Recruitment Process

Whether an organization recruits internally or externally must be carefully considered. Many firms prefer to start with internal recruitment and only move to external recruitment if those efforts fail.

Internal hiring is less expensive because there are minor to no recruiting fees, and they do not usually require substantial training, referral bonuses, or travel and relocation expenses. Internal hiring is also typically faster. The hiring procedure for an internal hire could take a few weeks. Managers are usually supportive of internal recruits, performance assessment documentation is readily available, and managers have a strong knowledge of the employee's skills.

Employees may also find it simpler to succeed in a new job inside the same firm if they already have working relationships and are familiar with the corporate culture. Internal recruitment is also beneficial to staff morale, which is essential. Employees who see roles being filled from the outside may believe they have no future at their company and may lose motivation or depart in search of a better opportunity.

Employers utilize external recruitment to attract employees with specific skill sets that are not available in-house or when they want to expand or change the direction of their organization. One advantage of bringing someone new into the organization is a new perspective.

Understanding Internal Recruitment

What is the definition of internal recruitment? Instead of bringing in fresh talent, the internal recruitment process promotes individuals from inside the same organization to higher positions.

One or more of the following tactics are commonly used in internal recruiting:

  1. Internal job advertisement
  2. Many companies utilize internal job advertisements to encourage employees to look for internal promotions and apply for those that match their abilities and interests. See What are the advantages of publishing job openings internally?

  3. Managerial nomination
  4. Some businesses ask to suggest high-performing employees for internal positions. Although this is a more informal structure, it can be very efficient in smaller companies where staff are familiar with the work of other departments. On the other hand, this technique may look to be partiality or unlawful discrimination. The repercussions of either of these may negate any benefits gained by promoting from within.

  5. Database of knowledge, skills, and abilities
  6. Human resource information systems (HRISs) are frequently used to track various personnel issues. A database of employees' knowledge, skills, and competencies is one example (KSAs). Recruits can build a KSA profile that includes information about their history, experiences, and career aspirations. They can update it regularly, usually during a performance review or career development conversation. HR can utilize this database to find people who might be candidates for a promotion or a transfer.

  7. Planning for the future
  8. Organizations can use succession planning tactics to identify prospective talent within the organization and create developmental programs to help individuals prepare for advancement.

Regardless of which approach—or a mix of techniques—an company takes, it should develop a fair and equitable policy for internal applicants, establishes expectations for employees applying for jobs, and is used consistently and publicly throughout the organization.

Wilson Cole

Wilson Cole

Founder and CEO of Adams, Evens & Ross NC, LLC, the nation's largest credit and collection agency designed exclusively for the staffing and recruiting industry. In 2008, he was inducted into Inc. magazine's, "Inc. 500" as CEO of Adams, Evens & Ross NC, LLC, the 307th fastest-growing privately-held company in America. This exclusive group of other Inc. 500 CEOs includes; Bill Gates of Microsoft and Larry Ellison of Oracle. In 2007, Recruiting & Staffing Solutions Magazine named him "The Billion Dollar Man", based on successful collections of more than 1 Billion dollars in past due debt. With a career spanning 30 years as CEO of Adams, Evens & Ross NC, LLC, he's in the business of getting clients paid.