Internal and external recruitment are two ways to recruit employees in an organization. Internal recruitment is the process of hiring people from within the organization. The management is already aware of their skills, and they have been working with them.
External recruitment is the method of recruiting employees from external sources. This can be done through advertisements, agencies, etc.
External recruitment is a more costly process. It is also a more time-consuming process than internal recruitment. Both of these types of recruitment have their own merits and demerits.
- Internal recruitment sources candidates from within an organization; external recruitment looks outside
- Internal recruitment can improve employee morale and retention; external recruitment provides a broader candidate pool
- Internal recruitment is faster and less expensive; external recruitment can bring fresh perspectives and skills.
Internal vs. External Recruitment
The difference between internal and external recruitment is that internal recruitment uses present employees. In contrast, external recruitment creates a pool of candidates from external sources. These employees do not have relationships with the organization.
|Parameter of Comparison||Internal recruitment||External recruitment|
|Meaning||This type of recruitment focuses on employing people already in the organization.||This type of recruitment focuses on employing people outside the organization.|
|Time||It is not as time-consuming as external recruitment.||It is a time-consuming process.|
|Cost||It is an economical process.||It is more costly than internal recruitment.|
|Number of candidates||This type of recruitment provides a limited choice between candidates.||This type of recruitment provides an unlimited choice between the candidates.|
|Basis||It is based on merit or seniority.||It is based on merit or qualification.|
|Sources||Promotion, transfers, references, etc., are sources of internal recruitment.||Employment agencies, casual callers, advertisements, etc. are external recruitment sources.|
What is Internal Recruitment?
Internal recruitment is a type of recruitment where the employees are recruited from within the organization. This is an economical method of recruitment and can also be done quickly.
There are various ways to recruit employees internally. For example, transfers, promotions, former employee re-employment, internal advertisements, etc.
A transfer is a horizontal method of internal recruitment, whereas promotion is a vertical method of internal recruitment. A transfer is shifting an employee from a department to another where there might be a requirement.
There are many advantages of internal recruitment. It fosters trust and loyalty and helps the organization maintain secrecy. There are negligible costs incurred on training and orientation in this type of recruitment, and the employees are also reliable.
The drawbacks of this are that it only provides a limited pool of candidates. It can cause the employees to be lethargic and decrease organizational innovation.
What is External Recruitment?
The external method of recruitment is one where the pool of candidates is created from outside the organization. These candidates do not have any relations with the organization presently.
It is a costly method as there are advertisement costs and the new employees need training and orientation. This type of recruitment is also time-consuming as the recruiter has to go through the profiles of all the candidates and then create a pool of the potential ones.
This is followed by a long process of training and orientation.
There are various sources of external recruitment. For example, advertisements, campus recruitments, waiting lists, employment exchanges, job portals, recommendations and references, job fairs and seminars, job consultancies and agencies, etc.
The external method of recruitment brings in fresh talent in the organization and, thus, bring along innovation and opportunity to improve. It also gives the management a large pool of candidates to narrow their potential candidates. In simple words, it provides management with a lot of choices.
Main Differences Between Internal and External Recruitment
- Internal recruitment can be based on seniority, whereas external recruitment gives qualification a priority.
- Sources of internal recruitment are transfers, promotions, internal advertisements, etc. External recruitment sources include job portals, campus placements, and employment exchanges.
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.