The race for top talent is on. So what’s the best hiring strategy for your business?
Of the many things a business needs for success, recruitment is number one. There are pros and cons of internal vs external hiring. And, most successful companies use a combination of both.
Internal vs External Recruitment: Which Should You Choose?
The most important consideration is your organization’s recruitment goals and mission. By taking time to properly plan recruitment, you make the best choices for your business, employees, and customers.
Everything is affected by the quality of your recruitment methods. So, what are the advantages (and disadvantages) of internal vs. external recruitment? Let’s take a look.
Internal Recruitment — Advantages & Disadvantages
| Advantages | Why? |
|---|---|
| Ensures Culture Add | Every business needs a quality culture that embodies its values. Ill-matched candidates can lower morale and decrease productivity. 91% of managers in the U.S. say a candidate’s alignment with company culture is equal to (or more important) than skills and experience. One of the benefits of internal recruitment is already knowing the employee. This makes it easier to decide if they are aligned with your culture, or might add value to it. |
| Shortens Onboarding Time | Onboarding takes time, especially with new employees. For example, along with introducing a new product management hire to courses and the best product management books, you also need to introduce them to your business values, goals, and processes. Research shows that employees make a judgment on their new role during their first three weeks, showing the importance of a well-managed onboarding. Internal hiring requires much less onboarding time and is a big cost saver. |
| Reduces Hiring Costs | External recruitment involves costs associated with advertising the role, like advertisements on job boards or paying a professional to edit video to promote roles. Internal recruitment is simpler and more cost-effective because you don’t need to use resources to advertise externally. And you require less input from the HR team, saving their time and your HR budget. |
| Disadvantages | Why? |
|---|---|
| Limits the Candidate Pool | By recruiting internally, you’ll have fewer options for candidates. Recruiting externally allows for a much larger candidate pool. This increases your chances of finding someone who’s right for a role. |
| Creates More Empty Positions | A downside to internal recruitment is that with each promotion, a position becomes empty. Smaller businesses may have to assign multiple roles to individual staff members. This could impact efficiency and reduce employee satisfaction. |
| It Could Lead to Office Politics | Most employees aren’t going to pass up a chance for a promotion, so constant competition and staff rivalries, might affect morale and reduce overall productivity. |
External Recruitment — Advantages & Disadvantages
| Advantages | Why? |
|---|---|
| Provides a Fresh Perspective in the Workplace | Top talent from outside of your organization can inject new energy. New hires bring new viewpoints and might suggest areas for improvement. When comparing internal vs external recruitment, don’t forget the importance of new perspectives. |
| Increases your Talent Pool | When hiring externally, you have access to more top talent. Advertising a position across multiple job boards creates a larger volume of applications. |
| Promotes Cognitive Diversity | External recruitment is a great way of promoting cognitive diversity. This means employing people of different thought patterns and mental perspectives. This boosts diversity and inclusion and increases innovation. |
| Disadvantages | Why? |
|---|---|
| Onboarding Takes Longer | Time is needed to integrate new workers into your company culture. You also need to ensure that new workers are adequately trained for the specific requirements of the role. This takes time and sometimes money. |
| Hiring and Training Costs Rise | Companies offering training have a 24% higher profit margin, but training is expensive. This adds to your cost per hire and reduces your budget for other HR initiatives. |
| Employees are More Reluctant to Change | External recruitment might cause resentment among your existing employees. Relying on external recruitment can cause existing employees to be less willing to work towards self-improvement or company goals. |
This is a guest post from Richard Conn:
Richard Conn is the Senior Director for Demand Generation at 8×8, one of the leading software co.s when it comes to small office phone systems, with its integrated contact center, voice, video, and chat functionality. Richard is an analytical & results-driven digital marketing leader with a track record of achieving major ROI improvements in fast-paced, competitive B2B environments. He has written for CrunchBase and Brightpearl. Here is his LinkedIn.
