Recruiting Internally vs Externally

Whether your company is growing or you’re experiencing employee turnover, finding the right hire for your job opening helps your company succeed. Choosing between external and internal recruiting depends on various factors, including your current talent and your needs for the new position. Look at the pros and cons of each to decide which type of recruitment best suits your recruiting plan.


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What is internal recruiting?

Internal recruiting means you recruit and hire for positions using your current employees. They might come from a different department or a different job title. It could be a lateral move or a promotion, depending on the rank of the current position and the new job. Some companies list certain jobs for internal applicants only instead of opening them up to anyone, or they start with internal applicant recruitment and open it up to external candidates if necessary.


What is external recruiting?

External recruitment happens when you look for candidates outside your current workforce. They’re candidates who don’t already work for you. Internal applicants can also apply for those positions, but the main recruiting efforts are targeted toward outside applicants. Many methods exist for external recruitment, including job boards, recruitment agencies, referrals and posting on your social media and website.


Deciding between internal and external recruiting

Internal and external recruiting can both be beneficial in different situations. The ultimate goal of employee recruitment is to find the best candidate for the job, whether that’s a current employee or someone from outside the company.


Pros of internal recruiting

Some pros of internal recruiting include:

  • Fast hire: Since the candidate already works for the company, there are fewer steps to complete. Background checks, reference calls and other standard steps were fulfilled when the employee was originally hired.
  • Lower cost: Advertising internal positions is cheaper because you’re aiming it at a smaller group. You can send job announcements directly to employees or post them on the company website without any advertising expenses.
  • Culture fit: You already know the employee is comfortable with the culture because they already work for your company. This makes the transition easier.
  • Company knowledge: Being familiar with company processes, values, goals and other key factors can help the internal hire get started in the new position faster.
  • Employee retention: Hiring from within can encourage loyalty and encourage employees to stay longer because they have the potential for new career paths.
  • Retain investments: Learning and development programs help shape your employees and give them necessary skills. When you hire from within, you keep those trained employees longer, which allows you to maximize your investments in development.

Cons of internal recruiting

Consider the following drawbacks of internal recruitment:

  • Workforce gap: When you fill a position internally, you fill one vacancy but create another. This could end up causing more work for your HR department, since they have multiple vacancies to fill.
  • Stagnancy: Without new talent coming into the company, things can seem stagnant over time. Current employees are likely to continue using the same processes and ideas rather than shaking things up with fresh thinking.
  • Comfort level: If all higher positions are filled with internal candidates, your current employees can get comfortable knowing they don’t have any outside competition, which could decrease performance.
  • Lack of skills: For some positions, you might not have a current employee with the right skills and experience.
  • Resentment: Internal applicants who aren’t chosen might feel resentment toward the person who was offered the position or toward the hiring manager. This can create tension in the workplace or cause those employees to look for a new job outside the company.
  • More training: If an internal candidate has some qualifications but not all, you’ll spend a lot of time and money training that person to fill the position. An external candidate who already has the necessary background doesn’t require that training.

Pros of external recruiting

The pros of external recruiting include:

  • Wider talent pool: Internal recruiting limits you to your current employees. External recruiting gives you more options and may help you find a better fit for the experience you need. You’ll likely have more applications from which to choose.
  • Outsider’s view: A fresh perspective without knowledge of how the company currently runs can give you new ideas and inject new energy.
  • Diversity: If your current workforce lacks diversity, hiring externally can help you shift toward more diversity.
  • Brand awareness: Advertising publicly puts your company’s name in front of more people, which increases your brand awareness.

Cons of external recruiting

Potential cons of external recruiting include:

  • Higher risk: Even if you fully vet an external candidate, you can’t be certain they’ll be a good fit and provide the quality of work you expect.
  • Slower start: Since an external candidate has more to learn about the company, it can take longer to get them up to speed.
  • Friction with current employees: Current employees who apply might resent external candidates who get the job over them. This can create a tense working environment.
  • Higher cost and more work: External recruiting often requires more work to find candidates. You have to advertise in more locations and take longer to vet your top choices.

How to recruit internally

Internal recruiting works well when you have a talented staff with plenty of potential candidates. It’s often ideal when you’re limited in time and money or when you need someone who’s already up to speed on internal processes and projects.


Follow these steps when recruiting internally:

  1. Establish your needs and requirements for the position.
  2. Look at your current workforce to determine if you have enough candidates who can meet those requirements. If not, recruiting externally might be a better option.
  3. Write a job description aimed at internal applicants to outline the requirements of the position.
  4. Post the internal opening on your website, or send notification via email, newsletter or other communication methods.
  5. Ask your managers to provide recommendations for current employees who might be a good fit.
  6. Approach employees you feel might work well in the position and suggest that they apply.
  7. Interview the internal candidates with the best qualifications.
  8. Look at internal reviews and discuss each applicant’s qualifications with their supervisors.
  9. Select the internal candidate who best matches your needs.
  10. Communicate the decision directly to the other internal candidates.

How to recruit externally

External recruitment is ideal when you don’t have anyone with the desired qualifications for the position or want a fresh take on the workload. The initial steps of the external recruitment process are similar. You need to establish your requirements for the position and create a job description. The main difference of external recruitment is determining where and how to recruit.


Here are common external recruitment methods and tools:

  • Job boards: Advertise your positions on an online job board like Indeed. You can post jobs and sponsor them to get more traffic. You can also look through resumes that are posted on the site.
  • Recruiting software: Using the right recruiting software can help you track external applicants, promote openings, organize applications, communicate with applicants and onboard your new hires.
  • Referrals: Establish an employee referral program to get suggestions from your current staff. Employees are likely to recommend people who’ll fit the company culture and do a good job since their recommendations reflect on them.
  • Company website: Create a careers section of your company website if you don’t have one already. Include an overview of your benefits and other important information in addition to your job postings.
  • Social media accounts: Let your social media followers know about your openings by posting about them. Your current followers already like your company, so they might be interested in working for you. It’s also easy to let people share your social media posts to reach a wider audience.
  • Job fairs: A job fair lets you meet and screen several candidates at once. Gather resumes and contact information to keep on file for current and future openings. You can also hold mini interviews during the job fair to look for solid candidates.
  • Recruitment agencies: If you don’t have internal recruiters or an HR department, you can outsource recruiting. A recruitment agency saves you time by finding candidates who match your needs.
  • Networking events: Attending industry and networking events lets you meet a wide range of people. You might meet potential candidates with the experience you need. Networking with others in the industry could also result in referrals to other people who’d be a good fit for your job.
  • Industry organizations: Many industry-related organizations offer job boards to connect employers and job seekers. These organizations typically require members to be in good standing and have certain qualifications, which can help you find candidates with the skills you want.

Using multiple recruitment methods expands your reach and gives you more applicants to review. Once you have a large number of candidates, screen them to find the best options for interviews.


With external applicants, you’ll likely do more vetting to determine their qualifications once you choose your top candidates. This might include:

  • Contacting references
  • Doing background checks
  • Reviewing social media accounts
  • Performing skills tests
  • Verifying education
  • Verifying past employment

Make sure all screening procedures are legal. All candidates should be put through the same screening to make the process fair.

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