Internal and external recruitment

When a vacancy arises, a business can fill it with an existing employee or with someone from outside. Each approach has different costs and benefits.

Internal recruitment

Internal recruitment fills a vacancy with someone already employed by the business rather than attracting outside candidates. It could be a promotion to a more senior job or a move sideways into a different role. The vacancy may be advertised inside the business, for example on the staff intranet, so current employees can apply.

Internal recruitment is often cheaper and quicker, as it avoids advertising widely and already knows the employee's performance. The employee understands the business, its customers and routines, so they settle in fast, and it can motivate staff to stay because they see a chance to progress.

However, the pool of candidates is limited to existing staff, so the business may get fewer new ideas or skills. Promoting one person can create another vacancy in their old role, and employees who were not chosen may feel resentful, which affects motivation.

External recruitment

External recruitment attracts candidates from outside the business, for example through a job-search website, to reach a wider pool of applicants. This brings fresh skills, ideas and experience, and is especially useful for a specialist role when nobody inside has the needed expertise.

The drawbacks are higher cost and more time spent advertising and selecting. The business cannot be certain how an unknown candidate will perform until they start, and existing staff may feel less motivated if they are overlooked for promotion.

Choosing the right approach

The choice depends on the business need: the skills required, cost, speed, whether fresh ideas are needed, and the effect on staff motivation. For example, a chain of indoor climbing centres starts running school-group sessions. Its instructors know the safety routines, so moving one into the job of organising school bookings is quick and cheap. However, none has sold to schools before, so recruiting an outsider with that experience takes longer and costs more, but brings knowledge the centres lack.