Internal or external recruitment? The advantages and disadvantages at a glance

Interne vs. externe Personalbeschaffung

There are basically two ways to fill a position: internal and external recruitment. What are the pros and cons of both methods and when should you use which one? We have summarized the most important information for you.

There are basically two ways to fill a position: internal and external recruitment. What are the pros and cons of both methods and when should you use which one? We have summarized the most important information for you.

Internal & external recruitment: The most important things at a glance

  • External talent acquisition offers a wide selection of candidates and enables recruitment according to a specific requirement profile.
  • Externally recruited employees bring fresh ideas, new know-how and an external perspective to the company.
  • However, the recruiting effort and the risk of bad hires are high when recruiting externally, and extensive onboarding is required.
  • Internal recruitment motivates employees through opportunities for advancement, reduces costs and has a lower likelihood of bad hires.
  • However, internal recruitment can lead to rivalry, a limited selection of candidates and the risk of vacancies being postponed.

Definition: What is internal or external staffing?

With the external recruitment A vacant position is filled by bringing in staff from outside the company. Recruiters therefore look for candidates on the job market.

At a internal job advertisement On the other hand, it is about filling a vacant position with employees from your own company.

Advantages of external recruitment

Vorteile der externen Personalbeschaffung
External recruitment enables positions to be filled according to the requirements profile (Image source: Song_about_summer – Shutterstock.com)

There are many benefits and opportunities that an external job posting can bring.

On the one hand, the huge selection of candidates is worth highlighting. You can search for a specific Requirement Profile selected, thereby recruiting qualified individuals who do not require further training.

Externally recruited employees also provide fresh impetus and bring their know-how and wealth of experience from other jobs into the company. Stale company processes are viewed and assessed from a new perspective, to which long-standing employees have often become "blind to the business".

Disadvantages and challenges of external job advertisements

There are also a few disadvantages to filling vacancies with external candidates.

The time and effort involved in recruiting are very high. The risk of making the wrong choice is also higher than if you already know the person and their working methods.

In addition, for an externally recruited employee, things are new and unfamiliar at the beginning. He must first find his way around the company and slowly get used to the processes and colleagues. For existing employees, this is Onboarding accordingly away.

Benefits of internal recruitment

Filling new or vacant positions internally also has its advantages.

Showing development and advancement opportunities ensures high employee motivation. The costs and Time to Hire are comparatively low. The personality and performance of the employee are already known, so the probability of a bad appointment is also lower.

There is no need for a probationary period or a long training period, as the internal applicant already knows the company and has the relevant industry or product know-how.

The disadvantages of internal job advertisements

Just like with external recruitment, there are also a few disadvantages to internal recruitment that we would like to point out.

The promoted employee could experience rivalry or envy from colleagues - for example, if their application was rejected or if they suspect nepotism. In addition, former colleagues who are promoted to a management position are often less accepted.

Due to the rather small selection of candidates, there is a risk that the position will be filled by underqualified people. Further training and education then entails costs and waiting times.  

Ultimately, internal recruitment could also be problematic if it only postpones the vacancy and results in further job fillings.

At a glance

Recruitment Advantages Disadvantages
External

Large selection of candidates

Recruitment according to requirements profile

Fresh impulses

New know-how

Blick von „außen“

High recruiting effort

Risk of miscasting rather high

(Extensive) onboarding necessary

Internal

Motivation among employees
through career opportunities

Low cost

Low time-to-hire

Low probability
a miscast

Probationary period / long training period
fall away

Rivalry and envy among
the colleagues

Former colleagues are
usually less than
Leader
accepted

Limited selection of candidates

Danger that vacancy only
is postponed

Methods and instruments for internal and external recruitment

If a vacant position is to be filled by an external candidate, there are countless options for recruiting. Whether Job advertisement set up an employee referral program, organize a stand at a career fair or Active Sourcing – many paths are possible and can also be combined with each other.

Internal recruitment depends on the size of the company. In smaller companies, for example, it is often sufficient to announce the vacant position in a circular email or to mention it in a meeting with the entire team. In larger companies, the vacancy can be communicated via the intranet or in the employee magazine, for example.

It is also possible to transfer suitable employees - but this should be discussed and decided together, because employees could feel ignored if they are reassigned.

Procedure for filling vacancies

Vorgehensweise bei der Besetzung einer offenen Stelle
The position will be filled in close consultation with the department. (Image source: Andrey_Popov – Shutterstock.com)

Of course, there is no standard procedure with prescribed rules for finding candidates for a vacant position. Typically, however, a Job description and a Requirement Profile Once the skills required have been determined, the position can be applied for.

The subsequent selection of applicants, especially in the case of internal recruitment, is often carried out in close coordination with team and department heads. They know their colleagues and know exactly who is well suited to personnel development measures. But even when filling positions externally, it is advisable to include feedback from the specialist departments in the selection process. Their input can usually influence the perspectives of the Human Resources Department expand.

Which recruitment route should I take?

Internal or external - which type of recruitment is worthwhile for my company? The basic requirement for the internal variant is that there are enough employees currently employed in the company who would be suitable for the vacant position. This approach is therefore unsuitable for small agencies. They have to go to the job market and recruit new talent from outside.

Medium and large companies can make a selection by answering the following questions. If you answer “yes” to these three questions, your company is probably recommended to external recruitment:

  • Do you want new impulses from outside for your company?
  • Is a large selection of candidates important to you?
  • Do you have time and capacity for the Onboarding new employee?

If you answer the next three questions with “yes”, the Filling positions with existing employees a good option:

  • Do you want to save costs and time on recruiting new employees?
  • Do you want to minimize the risk of a bad hire?
  • Would you like to offer your employees opportunities for advancement and development and thus increase motivation?

When deciding between the two approaches, you can also get advice from a Recruiting Consultant We will take your individual ideas and the specific situation in your company into account.