There comes a stage in company life when new roles open or existing roles become vacant. The need for the company to fill this vacancy is always time sensitive, in order for production not to suffer. Some companies prefer to go out and find a new staff to fill tis role. Others prefer to look for a candidate in-house who will be better suited for the new position. It has been an unending HR debate as to which of this strategies produce the best result for the business.

In light of this, i am delighted to shade some lights on the pros and cons of the two strategies and let you be the judge.

Definitions:

Internal recruitment is the process of filling vacancies within the company from its existing workforce. External recruitment is the process whereby a company fills its vacancies from outside sources.

To explain these definitions better, let us use a simple example to drive home the point. Imagine you are the owner of a large juice manufacturing company. You have 20 staff, 10 of them are customer service agents and 5 managers. An opening came up as one of your managers have decided to quit the company. If you promote one of the customer service agents to become a manager, then you have recruited internally. If you decide to look outside to fill the vacancy, then you have recruited externally.

Pros And Cons

Please notice that the advantages for one, forms the disadvantages for the other. In the light of this, we will only look at the advantages and disadvantages of internal recruitment. Note that the advantages of internal recruitment is the disadvantages of external recruitment and vice versa.

Advantages Of Internal Recruitment

• Reduction in hiring time.
• Less on-boarding, induction or training needed.
• Cost effective as company will not need to go through job advertising and stretched out interview processes.
• Helps maintain the companies corporate culture, as existing employee is already well vast in all company processes and values.
• Strengthens employee engagement as they believe they can be rewarded with a promotion if they keep doing well.

Disadvantages of Internal Recruitment

• Results in inflexible workforce, as no new ideas are introduced by the new employee.
• Could promote negative feelings from other employees who have not been chosen for the new role.
• Can leave spaces in the existing workforce, forcing the company to still go out and find new candidates to fill them.
• Discourages innovation.

Case For Internal Recruitment

This age-old argument might never end, but it is clear that recruiting internally does have a strong case. When a business hires internally, they are filling vacancies from employee who already know how the business operate and what the expectations are. They are getting a staff who already know the companies mission and vision and have already been working towards it.

Because he/she is already in-house, the cost of filling job adverts, running interviews and holding an induction process are all saved. Internal recruitment happens in three ways, there are:-  Transfers, Promotions and Referrals. Promotions can act as a source of encouragement for other employees to improve their work. It gives them the belief that improved performance is rewarded by the company.

Case For External Recruitment

There is a great case for external recruitment, which explains why lots of employers see it see it as the best employment strategy and this explains why we keep seeing job adverts on different job boards. For starters, the company might not have enough staff to fill the required positions. External recruitment, offers employers limitless talent pool and diversity in experiences.

It helps bring a new perspective to the business, a fresh head if you like, that way innovation can be encouraged. It also discourages complacency, as existing staff will keep working hard to perform well so as they can retain their place in the business.

Conclusion

As i said from the beginning, this argument is not going away anytime soon. But the points highlighted can sort of help us make better informed decision when choosing to hire internally or externally. Bear in mind that the higher the role in the business the better it is to hire internally. 

It is a proven fact that it is better to hire internally for the post of Managing Director as existing employees already know the business and HR might have their eyes on a possible replacement in their strategic planning. The chosen individuals might have gone through training to be able to fill the role, or might even have handled the role in a temporary bases in different cases.

I hope this has in some way helped you to be able to choose what hiring strategy to use when it comes to hiring internally or externally.