Recruitment is simply the action of enlisting new people to your company. While the nature of recruitment has practically remained the same over the years, the methods of recruitment have changed drastically. How a company decides to recruit depends on the company itself and other external factors such as local competition. The recruitment team at GCS Malta discuss the pros and cons of internal and external recruitment in this article.

Internal vs External Recruitment

Internal recruitment is when an organisation fills a vacancy with a candidate from its existing workforce.

External recruitment is when an organisation fills a vacancy with candidates outside the company.

While it is entirely up to the company to decide whether to recruit internally or externally for a job position, it is considered a good idea to advertise a job vacancy all the same. However, if you decide to recruit internally without promoting the job to everyone at the company, it might be construed as favouritism.

The Pros and Cons of Internal Recruitment

Pros

• Saves money – recruiting internally means avoiding a large portion of costs for recruitment, such as paying agencies, job board fees, running background checks etc.
• Saves time – internal recruitment allows you to speed up the recruitment process since you already know that the candidate is the right fit for the job. It also saves time for marketers, recruiters and HR. Moreover, since the employee is already familiar with company practices, policies and software, you can have a shorter onboarding time.
• Boosts morale – internal recruitment boosts company morale since other employees can see that they can rise through the company ranks, resulting in more employee retention.

Cons

• Creates a gap in the workplace – hiring internally means that you automatically create a new vacancy to fill. This issue can be tackled by promoting someone from a junior role to a senior rather than opting for a new hire.
• Limits your talent pool – internal recruiting reduces the chance of hiring new candidates with innovative ideas. There is also a chance of overlooking candidates better suited for the role.
• Stagnates company culture – If you choose to hire internally only for an extended period, you risk stagnating your company culture since there will be a lack of fresh talent, insight and inspiration.

The Pros and Cons of External Recruitment

Pros

• Gain new ideas and skills – externally recruiting can bring fresh ideas and skills to your organisation. It also increases the chance of recruiting experienced and more qualified candidates.
• Offers a broader net to recruit from – since you are recruiting from an infinite pool of candidates, you can try to attract top talent.
• Gives you insight into the competition – hiring externally means that when the external candidate joins the team, they will bring unique insights and insider knowledge.

Cons

• Slower onboarding – since external recruits are not experienced within the company and have a limited understanding of the company and company culture, onboarding will take more time than internally recruiting. Some candidates may also have to work a notice period, prolonging the onboarding process further.
• Higher risk of turnover – in a survey carried out by BambooHR, 31% of workers said they quit their job within the first six months. Most early job leavers were external recruits whose expectations were unmet.
• More expensive – hiring externally is more costly than hiring internally since you need to allocate a budget for promoting the role, training and onboarding.

The challenge of internal vs external recruitment is to choose the best option according to each role and situation. A mix of internal and external hiring will boost morale, promote loyalty, and increase employee retention whilst also gaining new insights and reducing the risk of stagnating your company culture.

Why GCS Malta?

At GCS Malta, our exceptional Recruitment team offer a quick and cost-effective recruitment service while finding the best job match for all our candidates. Check out our available vacancies here and contact us today for more information.

Article by Sarah Jane Gauci