Internal Recruitment vs External – What’s Best for Your Business?

by , | May 11, 2023 | Blog, Recruiting

  • Integrity HR

    Amy Newbanks Letke, SPHR, GPHR, is the Founder of Integrity HR, Inc. Amy provides workplace solutions to improve performance, reduce liability and increase profits. She is passionate about helping other entrepreneurs and business owners achieve success.

    Contact us for more insights - 502-753-0970 or

  • DeDe Kelley

    DeDe Kelley is the Talent Acquisition Director for Integrity HR, a human resource consulting and outsourcing firm in Louisville, Kentucky. She has over 20 years of experience in talent acquisition, management, and development, serving industries such as quick serve, fitness, convenience stores, gaming, social services, and clinical and non-clinical medical offices.

Recruiting new employees is an essential part of running a successful business. But when it comes to the recruitment process, one of the most important decisions you’ll make is whether to recruit internally or externally. Both options have their advantages and disadvantages, and it’s important to consider these carefully before deciding.

Internal Recruitment

Internal recruitment is when you hire employees from within your organization to fill vacant positions. This can include promoting existing employees, transferring employees to new roles, or reassigning employees to different departments. There are several advantages and disadvantages to recruiting internally.


  1. Familiarity with the company: Internal candidates are already familiar with the company culture, values, and mission. They know the organization’s policies and procedures and are less likely to require extensive training.
  2. Cost-effective: Internal recruitment is usually more cost-effective than external recruitment because it requires less training time, effort, and resources. The recruitment process is often faster because you already know the candidates, and you don’t have to spend money on advertising or recruiting agencies.
  3. Boosts employee morale: Promoting employees from within the organization can boost employee morale and motivation. It shows that the company values their contributions and is willing to invest in their career development.
  4. Better retention rates: Hiring from within the company can lead to better retention rates because employees are more likely to stay with the organization if they see opportunities for career advancement.


  1. Limited talent pool: Internal recruitment can limit your talent pool, especially if you’re looking for specific skills or experience that aren’t available within the organization.
  2. Internal conflicts: Promoting employees from within the organization can sometimes create internal conflicts if other employees feel they were overlooked for the position.
  3. Stagnation: Hiring from within can sometimes lead to stagnation and a lack of innovative ideas and perspectives within the organization.

External Recruitment

External recruitment is when you hire employees from outside your organization to fill vacant positions. This can include advertising job vacancies, using recruitment firms, or conducting interviews with external candidates. There are several advantages and disadvantages to external recruitment.


  1. Wider talent pool: External recruitment allows you to access a wider talent pool, including individuals with diverse backgrounds, skills, and experience.
  2. Fresh ideas: Hiring external candidates can bring fresh ideas and perspectives to the organization, which can lead to innovation and growth.
  3. Larger skill set: External recruitment allows you to find candidates with specific skills or experience that may not be available within the organization.
  4. No internal conflicts: Hiring externally can help to avoid internal conflicts and the perception of favoritism.
  5. Outside perspective: Working with a recruitment firm can help to streamline your current process, help identify areas of opportunity for improvement in your hiring process and alleviate workload from your internal team.


  1. Costly: External recruitment can be more costly than internal recruitment because it requires more time, effort, and resources. Advertising job vacancies, screening resumes, and conducting interviews can all add up to a significant expense.
  2. Potential for culture clash: Hiring external candidates can sometimes lead to a culture clash, where new employees struggle to fit in with the company culture.
  3. Lower retention rates: External recruitment can sometimes lead to lower retention rates because new employees may be less committed to the organization and more likely to leave for other opportunities.

In conclusion, there are advantages and disadvantages to both internal and external recruitment. The decision will depend on your specific needs, goals, and resources. If you’re looking for cost-effective, efficient, and low-risk recruitment, internal recruitment may be the best option. However, if you’re looking to access a wider talent pool, bring in fresh ideas and perspectives, and expand your skill set, external recruitment may be your best option. Be sure to ensure that you are aligning with a recruitment firm that listens, aligns with your core values, and has a proven track record and you will be good to go! Reach out to Integrity HR today for all of your HR needs.

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