Despite numerous crises that are weakening our economy, the skills gap continues to grow. Vacant positions now remain unfilled for an average of five months. This long period of understaffing delays company processes, reduces productivity and ultimately leads to a loss of revenue, but what if the right talent is already within the company's own ranks? It is not uncommon for vacant positions to be filled internally with the help of a few training programmes. But what are the advantages and disadvantages of internal recruitment compared to external recruitment? And which strategy is the best? These are the questions I would like to discuss with you today:
What are the advantages of internal recruiting?
Internal recruiting involves selecting the right candidate from the pool of existing employees. This can take the form of a promotion by line managers or HR managers, or you can actually advertise the vacancy and all employees have an equal opportunity to apply.
Internal recruiting has numerous advantages for companies and employees. On the company side, time and costs are saved because instead of costly recruiting and employer branding measures, a notice on the notice board, a mention in a meeting, a circular email, a newsletter or simply a message on the intranet is sufficient. Subsequent unsuccessful appointments are less likely, as employees are already familiar with the company values and culture. In turn, managers are familiar with the soft skills and working methods of their team members; the cultural fit is therefore very likely. This also saves time in the onboarding phase, as company structures and internal processes are already familiar to a large extent.
Employees also benefit from a seamless transition, as they no longer run the risk of a probationary period. The prospect of promotion within the company and the ultimate appreciation of a job offer increase motivation and improve the working atmosphere. This in turn contributes to employee satisfaction and loyalty, which reduces staff turnover. Last but not least, this also has an effect on your employer brand, which could make future recruiting easier.
What are the disadvantages?
Where there is light, there is also shadow - internal recruiting is no exception to this saying. One disadvantage is certainly the limited pool of candidates, as not every one of your employees will be equally suitable or interested in the vacant position. Once a suitable talent has been found, the reorganisation usually creates a new vacancy that needs to be filled.
In addition, an internal promotion can also cause resentment among the rest of the workforce. Rivalry, envy or resentment can put a strain on working relationships and lead to a deterioration in the working atmosphere. If too much basic knowledge is assumed when starting a new job, this can quickly lead to excessive demands and uncertainty. In the worst-case scenario, the promoted employee leaves the company due to failure in the new position - and two new positions have to be filled at the same time. Another disadvantage can be operational blindness: Creativity and innovative strength can suffer from a lack of new impetus.
What are the advantages of external recruiting?
External recruiting is different, of course. New talent brings a breath of fresh air, ideas and new perspectives to the company and may find solutions that long-serving employees overlook. In addition, the pool of candidates is much larger when searching externally, while the probability of finding a talent that exactly matches the requirements profile developed increases. This can increase the quality of work and save on training costs, as people are often looking for skills and qualifications that are still lacking within the company. Last but not least, a new talent is often more likely to be accepted by the workforce than a candidate from within the organisation, making rivalry and resentment less likely.
What are the disadvantages?
A significant disadvantage of external recruitment results from the advantages of internal recruiting: External recruiting is often associated with high costs and time expenditure. Creating and placing job adverts, presenting at job fairs and a sophisticated social media presence to draw attention to the company - all of this costs time and money. Particularly in times of a shortage of skilled labour, vacant positions that are filled externally often remain open for several months. Once an apparently suitable talent has been found, there is a considerable residual risk as to whether the person is actually suitable for the job and fits in with the corporate culture. Compared to an internal recruitment, the effort involved in onboarding and familiarisation with company processes and structures is of course considerably higher.
External vs. internal: Which recruiting strategy is the best?
Both methods have their advantages and disadvantages. So which recruiting strategy is the better one? Of course, there is no general answer to this question. Which of the two approaches you should choose depends on both the current situation of your company and the position to be filled.
If, for example, an important position needs to be filled at short notice that requires qualifications that are already available in the company or can be acquired quickly, I would advise you to recruit internally. Even if a position requires insider knowledge, it makes sense to fill it internally. If, on the other hand, you want to promote diversity in your organisation, you should rely on external recruitment - because the diversity of your workforce can only grow through new members.
It is therefore advisable to be open to both methods and to always keep the needs and goals of the organisation in mind. You can then choose the strategy that is best suited to the specific case - because both the valued team member and the fresh talent from the labour market can take your company a decisive step forward.