Advantages and disadvantages of internal recruitment
This detailed article examines some of the advantages and disadvantages of internal recruitment. When it comes to recruiting people, managers have two options i.e. whether hiring someone from within or outside the company. Companies understand that sometimes they need to stop looking for employees externally and start looking internally. There are many reasons behind it which this article intends to explore.
What is internal recruitment?
Internal recruitment takes place within the organisation. It is when a business looks to fill the vacancy from within its existing workforce (CIPD, 2021). It is a HR strategy that prioritises recruiting existing employees for new or open positions within the organisation.
Let’s say that a company has decided to hire a marketing director. It can communicate with the existing workforce to identify whether some people are interested to apply for the job. It is often seen that many existing employees are promoted to higher positions with the company.
Advantages of internal recruitment
There are many advantages of internal recruitment. First of all, it is a quicker method of recruitment as the business already knows the strengths and the weaknesses of the job applicants who may been working with it for a long time (BBC, 2022). It allows companies to hire people that are highly compatible with their culture and values.
Cost-saving is also a key issue. Companies do not need to advertise outside the company which usually costs a lot of money. Similarly, they do not need to provide basic induction training as the candidates have had the training when they joined the company.
Performance based selection is one of the major advantages of internal recruitment. Employees are selected based on their actual performance that have demonstrated throughout their stay with the organisation; not based on the claims made on their CVs.
Internal recruitment provides existing employees with opportunities for promotion within the business. This is certainly motivating for many employees as they are willing to take on more responsibilities to climb up higher echelons with the organisational structure.
Another benefit is the increased productivity and efficiency. Employees already know how to work with each other in a team, which means they will be more productive than someone who comes in as an outsider. In addition, existing employees are likely to be familiar with the business procedures as well as have some insight into the existing problems or issues that might affect the company’s growth or success.
Disadvantages of internal recruitment
There are many disadvantages of internal recruitment. For example, it limits the number of prospective candidates. If a companied decided to hire externally, it would have attracted more applicants from different parts of the society.
Organisational conflicts sometimes happen over the decisions of promotion. Some people might feel that they have not been promoted because they are not in the good book of the management. This conflict can be easily avoided with external recruitment.
As recruitment happens internally, fresh and new ideas are not introduced to the organisation from outside. In a fiercely competitive business environment, fresh and new ideas are often required to gain competitive advantages.
Internal recruitment types (Examples of internal recruitment)
Internal recruitment can come in a variety of forms. It includes internal referrals, promotions, and transfers. Internal referrals are one form of internal recruitment that comes from within the company. Employees may recommend friends or co-workers to be hired in their place if they are unable to work for any reason. Likewise, they may recommend friends or family members for certain positions within the company.
Promotions are perhaps the most widely used internal recruitment method. If some employees have demonstrated their commitment to the organisation, and are performing really well, they should be offered promotion opportunities provided they are willing to take on more responsibility.
Transfers of some employees from one department to another occur in many organisations. Though the job roles and responsibilities may not change, selected employees move to another department within the company (Indeed, 2021).
Internal recruitment process
Firstly, organisations need to make the recruitment decisions i.e how many people to be recruited in what positions. Then, they need to attract prospective applicants through word of mouth, Intranet, email etc. Once some candidates have shown interests, interview and other assessment methods need to be used to identify the right person/s for the post. The last stage in the process is the notification of the decision.
How to attract applicants for internal recruitment?
There are many different methods of attracting prospective candidates for the purpose of internal recruitment. For instance, word of mouth is a basic, yet powerful method. Managers may simply ask everyone whether anyone is interested in a position within the organisation.
Notice board, company newsletter, Intranet, and email are also useful methods. Some companies may not have regular newsletter, or Intranet facilities. For them, email and displaying job information on the notice board could be very useful.
One of the most difficult things for organisations to do is to find and hire the right people. Therefore, often many of them use internal recruitment method. Certainly, internal recruitment can provide advantages for both employers and employees. However, it can sometimes be difficult to implement.
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Last update: 18 March 2022
BBC (2022) Effective recruitment, available at: https://www.bbc.co.uk/bitesize/guides/zbwhxyc/revision/3 (accessed 17 March 2022)
CIPD (2021) Recruitment: an introduction, available at: https://www.cipd.co.uk/knowledge/fundamentals/people/recruitment/factsheet (accessed 18 March 2022)
Indeed (2021) Internal recruitment: definition, benefits and tips, available at: https://uk.indeed.com/career-advice/career-development/internal-recruitment (accessed 18 March 2022)
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.