Difference Between Internal and External Recruitment (with Comparison Chart)

Table of Contents

Employees are the most valuable asset to the company, as they are responsible for the success or failure of the enterprise. It is hard, for the managers to find out the right employees and to put them at the right job. The process of recruitment helps to hunt the best employee from the slate of candidates. There are two sources of supply of manpower; namely, internal and external recruitment. Internal Recruitment is a process whereby the employees are recruited from within the organization while external recruitment, is a process in which the recruitment is done using outside sources.

In internal recruitment, that personnel is called by the organization which is already on the payroll. Conversely, in external recruitment, the organization relies on sources like an open advertisement, consultancy firms, employment exchange etc.

In this article excerpt, we’ve provided all the important differences between internal and external recruitment, take a read.

Content: Internal Recruitment Vs External Recruitment

Comparison Chart

Basis for Comparison	Internal Recruitment	External Recruitment
Meaning	Internal Recruitment involves recruiting candidates from those who are already in employment within the organization.	When the recruitment of candidates is done externally, then this type of recruitment is known as external recruitment.
Basis	Merit cum seniority	Merit cum qualification
Time taken	Quick process	Lengthy process
Induction training	Not required	Must
Cost	It is a cost effective process.	It is a costly process.
Choice of candidates	Limited	Unlimited
Sources	Transfer, Promotion, References etc.	Advertisement, casual callers, employment agencies, management consultant, recommendations etc.

Definition of Internal Recruitment

Internal Recruitment is a recruitment in which the supply of manpower is done internally, i.e. within the organisation. The candidate is selected from among the employees who are already in employment with the organisation, i.e. present employees or from those who were in employment with the organisation in the past i.e. former employees who left the job voluntarily but they plan to return. These also include the ex-employees, whom the company wants to rehire.

In this process, the hiring of employees is done by transferring the employees from one department to another department or by promoting the employee from one level to another higher level. The following are the most common methods of internal recruitment:

Internal advertisement
Promotion
Transfer
Reemployment of former employees
Employees hired earlier on the contract basis or for part-time work.
Retired employees

Internal Recruitment boosts the morale of the employees that they get a chance to prove their abilities and efficiencies. Furthermore, no induction training is required, as the employees are already familiar with the organisation and the job as well. However, this process stops new talent from entering the organisation. In addition to this, there are possibilities of partiality among employees.

Definition of External Recruitment

External Recruitment refers to recruitment in which the candidates are selected from outside the organisation. Keeping aside, the talent existing within the organisation, this source involves employing such methods that will help to find out the best employees which are outside the organisation. However, it is a tough task, but it has a very positive impact as compared to internal recruitment.

The process is quite time-consuming as well as slow because of a number of steps involved in it, but it helps the organisation to hunt the best candidate among the long list of candidates. Moreover, in this source of recruitment makes the concern, openly choose the top talent considering various parameters like skills, abilities, qualification, experience, etc. In addition to this, it brings new ideas to the organisation. But there is one drawback that the organisation has to invest a huge amount in advertising, training, and induction of the employee. Some examples of such recruitment are:

Campus Recruitment
Job Portals
Job fairs and seminars
Waiting lists
Employment Exchanges
Job consultancies
References and recommendations
Direct Walk-ins
Ads on newspaper, magazines, and website, etc

Key Differences Between Internal and External Recruitment

The following are the major differences between internal and external recruitment:

Internal Recruitment refers to a source of recruiting manpower which is already existing within the organisation. External Recruitment is a little different as it involves the hunting of prospective employees from outside the organisation.

Internal recruitment does not require induction training, whereas, in external recruitment, induction training is a must.

Internal Recruitment is faster than external recruitment because external recruitment involves stages like advertising and inviting applications, screening of applications, short listing, conducting an examination and interview, selection, placement, training, testing, induction, etc., which are not present in internal recruitment.

The basis for internal recruitment is merit-cum-seniority, but the basis of external recruitment is merit-cum-qualification.

Internal Recruitment is a cost effective process. However, External Recruitment requires a large amount of investment.

In internal recruitment, the choice is very limited, i.e. the scope of fresh talent is restricted. On the contrary, when the company opts for external recruitment, it can hope for talented candidates from outside the organisation, which means new blood and ideas are infused in the organisation.

Conclusion

Behind the success or failure of any organisation, there is only one factor, and that is the employees of that organisation. If they work with their full efforts, then the organisation is going to rise. Finding out the best employees is a very tough task. We cannot say that which method is good, but it depends on the circumstances. If an organisation has a good employee base, then it can choose an employee for the vacant position from within the organisation, however, if no employee suits best on that position, then it can employ external sources of supplying personnel.

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