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Advantages and Disadvantages of Internal and External Recruitment

According to Taylor (2005), the following are the advantages of internal recruitment.

1. Improves morale - When an employee from inside the organization is given the higher position, it helps in increasing the morale of all employees. Normally every employee expects promotion to a higher position carrying more status and pay.

2. No Error in Selection - When an employee is selected from inside, there is a least possibility of errors in selection since every organization maintains complete record of its employees and can verify them in a better and accurately.

3. Promotes Loyalty - It encourages loyalty among the employees as they feel secured on account of chances of advancement.

4. No Hasty Decision - The chances of hasty decisions are completely removed as the current employees are well trained and knows the organization processes.

5. Economy in Training Costs - The current employees are fully aware of the procedures and policies of the organization. The current employees require less training. As a result of that, training cost will be less.

6. Self-Development - It encourages self-development and moral boost among the employees as they can look forward to occupy higher positions.

According to O´Meara, Petzall, (2013), following are the disadvantages of internal recruitment:
  1. It discourages skilled persons from outside to join the concern.
  2. It is possible that the required number of resources possessing qualifications for the vacant positions may not be available in the organization.
  3. For positions requiring innovations and creative thinking, this method of recruitment cannot be followed.
  4. If only seniority is the benchmark for promotion, then the resources filling the vacant post may not be really capable.


Despite of the disadvantages, it is commonly used as a source of recruitment for lower positions. It may lead to favoritism. The employees may be employed on the basis of their recommendation and not suitability (Shammot, 2014).
According to Aswathappa (2010), following are the advantages of external recruitment:

1. Availability of Suitable Persons - Sometimes, internal sources may not be able to resource suitable resources from within. External sources give a wide-ranging choice to the management. A large number of applicants may be willing to join the organization. Resources will also be suitable as per the requirements of skill, training and education.

2. Brings New Ideas - The selection of resources from outside sources will have the benefit of new ideas. The resources are having experience in other concerns will be able to suggest new things and methods. This will keep the organization in a competitive place.

3. Economical - This method of recruitment can prove to be economical because new resources are already trained and experienced and do not need much training for the jobs.

According to Kauhanen and Napari (2012), Following are the disadvantages of external recruitment:
1. Demoralization - When new resources from outside join the organization then current employees feel demoralized because these positions should have gone to them. There can be a frustration among old employees. Some employees may even leave the organization and go for better avenues in other concerns.

2. Lack of Co-Operation - The old staff may not co-operate with the new resources because they feel that their right has been taken away by the new resources. This problem will be critical especially when resources for higher positions are recruited from outside.

3. Expensive - The process of recruiting from outside is very costly. It starts with introducing costly advertisements in the media and then arranging written tests and conducting interviews (these interviews can be multiple). If the suitable candidate is not available then the whole process has to be repeated.

4. Problem of Maladjustment - There may be a possibility that the new resources have not been able to adjust in the new environment. They may not temperamentally adjust with the new resources. In such cases either the resources may leave by themselves or management may decide to replace them. These things have adverse effect on the working of the organization.

Conclusion

In conclusion, this blog has looked at the various drawbacks and benefits derived from using the internal and external methods of recruitment. However it is critical for the organizations to get recruitment process right and most organizations should use the internal and external recruitment simultaneously in order to increase productivity and efficiency of the organization through a motivated workforce.


In addition, the rapidly changing competitive environment have made some employers to turn their focus to the external labor market in addition to the developing internal source. However management have to be careful on how they make decisions as to which strategy to use by carefully weighing the long term implications of their method because all organizations are out to maximize costs.

References

  • Aswathappa, K. 2010. Human Resource Management. Text and Cases. New Delhi : Tata Mcgraw Hill, 2010. 687 p. ISBN 978-0-07068-213-9.
  • Kauhanen, Antti and Sami Napari. 2012. Career and Wage Dynamics: Evidence from Linked Employer-Employee Data. In Solomon W. Polachek and Konstantinos Tatsiramos. Research in Labor Economics, pp 35-76: Emerald Group Publishing Limited.
  • O´Meara, B., Petzall, S. 2013. The Handbook of Strategic Recruitment and Selection: A Systems Approach. Bingley : Emerald Group Publishing Limited, 2013. 435 p. ISBN 978-1-78052-810-6
  • Shammot, M. (2014). The role of human resources management practices represented by employee recruitment and training and motivation for realization of competitive advantage. African Journal of Business Management, [online] 8(1). Available at: http://www.ccsenet.org/journal/index.php/ibr/article/view/35379 [Accessed 16 Sep. 2019].
  • Taylor, S. 2005. People Resourcing. Chartered Institute of Personnel & Development, 2005. 512 p. ISBN 978-1-84398-077-3.



Comments

  1. Agree with above content. An obvious reason to prefer insiders is that they understand the company and its organizational culture and have developed skills that are specific to the organization. Those skills tend to induce long-lasting employment relationships between workers and employers because the uniquely productive employment relationship benefits both parties (Jed, 2016).

    ReplyDelete
    Replies
    1. Hi Chandran,
      Silzer et al (2010) described that the main objective of successful talent strategies is to create both a case as well as a blueprint for developing the talent strategies within a dynamic and highly intensive economy wherein acquisition, deployment and preservation of human capital-talent that matter, shapes the competitive advantages and success of many companies.

      Delete
  2. Agreed.Disadvantages of internal recruitment: There are no new ideas or energy coming into the business, Promoting from within may create the ‘Dead Man’s Shoes’ atmosphere in which employees feel they can only be promoted when an employee in a more senior position leaves their role. It limits the potential number of candidates that you have to choose from, a new vacancy will be created when your candidate takes the new role and it may create resentment between employees who feel that they were overlooked for the promotion.

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    Replies
    1. Thanks for your feedback Radchika. Yes many organization use promoting from within the organization.

      Delete
  3. Hi Thilana. I would like to mention a few more additional benefits of external recruitment. For one, there will be lesser interference of internal politics and bias judgement during the hiring process as opposed to internal recruitment, where favouritism could play a part. In addition,
    Harky (2018) states there is an added level of competition brought in from outside recruits as the current employees would feel like they'd need to step up their game. This positive competitive environment created will boost employee productivity (Saviour et al., 2016).

    ReplyDelete
    Replies
    1. Hi Jehan, Yes agree with you additional benefits as well. the main focus to highlight the critical aspects.

      Delete
  4. Well written article while adding more advantages to internal recruitment are The orientation cost will be low and it will not be a time-consuming process since the employee already know the culture of the organization and also I will add the employee have a strong relationship with coworker where the working environment will comfort employee to be more productive (Gulam,2010).

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    Replies
    1. Hi Nayani, Yes the organization I for for is also promote the same concept of promotion within the organization which is a more practical solution.
      .

      Delete
  5. I would like to expand further on the second point ("No Error in Selection") you have outlined on this well written article, regarding the benefits of internal recruitment . One of the common issues in the process is the organizations inability to successfully evaluate the person–culture fit and Ehrhart and Kuenzi (2017) discusses that prospective candidates who not share values similar to the ones infused in to the organizational culture, are more likely to leave.

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    Replies
    1. Hi Nadeeranga, Yes during the interviews its very hard to understand new recruitment in terms of their behavior and thinking pattern unless psychometric test is placed.

      Delete
  6. Hi Thilana, Well written post. As you explained that organizations receives a variety and number of candidates who owns knowledge and ability to handle that job through external recruitment ( Aswathappa, 2010). As well as there is a quite better possibility of finding and identifying a fresher candidate who is capable of delivering new skills and inputs for the betterment of the company who is in desperate need of fresher skills and inputs for the overall growth of the company.

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    Replies
    1. Hi Sithari, The general purpose of recruitment according to Gamage (2014), is to provide the organization with a pool of potentially qualified job candidates. The quality of human resource in an organization highly depends on the quality of applicants attracted because organization is going to select employees from those who were attracted.

      Delete
  7. Hi Thiline adding a small line to the advantage of internal recruitment, according to Muscalu (2015) the internal recruitment allows managers to observe employees behaviors and performance for a period of time and has ability to evaluate and see whether he is matching with the right culture of the organization. That gives other employees a lesson where they have a chance if they perform well in the company.

    ReplyDelete
    Replies
    1. Hi Yohan, agree and its same as Promotes Loyalty which i have mentioned above

      Delete
  8. Agree with your description Thilana. Additionally, hiring an internal candidate for a vacancy will benefit the organization and employee both (Petersen, 2019). While the organization will have the benefit eliminating the requirement for an induction process which will save many resources as well as the employee will develop special skills and create a chance for promotions within the organization (DeVaro, 2016).

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    Replies
    1. Hi Shan, Yes Boost retention is one of the key advantages and I have withness the same thing from the company I work in.

      Delete
  9. Agreed, When employees are recruited from within the organization, it sets a mentality in employees’ minds that sincere employees are promoted. Promotion means increased payment and fame. So they become encouraged to put more efforts and make quality outputs. This results in development of employee while, External recruitment creates a pool of eligible candidates and best-qualified ones can be chosen easily as the management team has greater choice of selection. This ensures the quality of human resources in the organization (Allison, 2010)

    ReplyDelete
    Replies
    1. Hi Chathura, Thanks for your acknowledgement and agreeing on my post

      Delete
  10. I do agree with the post and additionally the decision whether to enrol from inside or outside the firm, leadership ought to think about the nature and level of the activity, qualities of the firm and industry, and a company's arrangement of human resource (DeVaro, 2016) . For example, serious enrolment and screening strategies and preparing is essential for external hiring.

    ReplyDelete
  11. Hi Thilana, the role of human resources management practices represented by employee recruitment and training and motivation having more competitive advantages to have a well designed process (Shammot, 2014).

    ReplyDelete

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