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Internal Vs. External Recruitment: Advantages & Disadvantages

In the modern work environment, one has to weigh the pros and cons of any new hire, be it internal or external. If your business does fall into the start-up category, you would have no choice but to recruit externally in order to build your team. However, if the business is already a relatively well-established one with a sizable team, then that allows the top-brass to look into the existing pool of talent and recruit internally.

Whatever the case may be, there are still advantages and disadvantages for either side. That is why, as one of the top recruitment agencies in Canada, we here at Pure Staffing Solutions have put together this article, which will explore both sides to give a reasonably objective outlook on the matter.

Internal Recruitment: Advantages

Familiarity – The most obvious answer that makes this a solid option is the fact that they are familiar with the work. Since these employees are already working for the company, they know the ins and outs of the business, the rules, formats, workflow and hierarchy of work priority. In essence, they understand the business.

Minimal Training Needed – Hiring internally means that employees can get straight down to the meat of the work. They don’t need to be trained as extensively as new recruits. Another added advantage is that the recruits will have an established connection and workplace relationship with other staff members, which makes fitting into the new role that much easier.

Acts as a Beacon – When you offer your existing pool of employees a move up the ladder, it shows the other staff members that there is room for growth and that initiative is rewarded. This would promote better work ethics and boost employee morale.

Adds to Brand Value – Everyone loves a story of ‘rags to riches’, so to speak. An employee who started at a lower position eventually climbing to a management level position sends a strong message about the company’s values and outlook towards its employees’ growth and well-being.

Internal Recruitment: Disadvantages

Lack of Fresh Perspective – While employees who are promoted to a new post might excel at their new job, it could backfire as well. Given that they have worked for the company for a significant amount of time, they may get used to a certain workflow and fail to see the larger picture at times.

An Environment for Resentment – If you have more than one employee gunning for the position, and only one gets selected, then other employees might grow resentful. They might even leave the organization on the basis of not feeling valued.

Internal hiring

Limiting Yourself – Hiring internally restricts you to a fixed talent pool. No matter how talented you may miss the opportunity to hire someone who fits just right because you were too focused on the limited number of applicants you already have within the company.

False Perspective – You may think that hiring internally might be a cost-saving for the company. However, considering the long-term, if the recruit does not perform up to the mark, then you might see greater financial losses down the line. Again, you need to consider the bigger picture.

“Hiring people is an art, not a science, and resumes can’t tell you whether someone will fit into a company’s culture.”Howard D. Schultz, American Businessman and Ex-CEO of Starbucks Coffee Company

External Recruitment: Advantages

Casts a Wide Net – As a leading recruitment agency in Canada, we know that recruiting externally gives you access to a wider range of candidates and the talent they bring with them. You even have the potential to recruit on a global scale.

Fresh Perspectives – Newcomers may have insights on the position or the work that existing employees just could not see due to how desensitized they have become. New perspectives help diversify the work and bring something you never knew you needed.

Healthy Competition – External hires can light a fire under your existing employees to perform better and achieve more to attain the same growth within the company. This could drive up productivity.

External Recruitment: Disadvantages

Runs the Risk of Alienation – Hiring a fresh recruit over your existing employees could put a sour taste in their mouth if they see it as being passed over for a role they worked hard for. This could again lead to them potentially looking for opportunities elsewhere. The bottom line, it could severely impact your internal team dynamics as well as your turnover rates.

It’s a Toss of the Coin – Fresh blood may not always be a good thing. You need to keep in mind there will need to be a significant chunk of company time and resources devoted to just bringing them up to speed. Even then, it may not work out. So, it is a gamble.

Clash with Company Culture – From the perspective of a recruitment agency, experience tells us that bringing in new people always runs the risk of conflict within the workplace. New employees may not always see eye-to-eye with pre-existing employees. This could hinder work performance and bring down morale.

As mentioned in the beginning, either path has its fair share of pros and cons. When considering which path to take, there are many factors to keep in mind. One such determining factor is the working capital. Then there are other elements such as the bandwidth you can spare, the talent you are looking for, and so on. There are no right or wrong answers at the end of the day. The only thing you can be absolutely sure of is that hiring as a company or a hiring agency should be done on a case-by-case basis and should not under any circumstances become a generalized activity.

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