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Internal vs External Recruitment
Choosing between hiring from outside of the business or promoting internally can be a difficult choice for an employer. Both methods come with their pros and cons as they are very different ways of filling a vacancy. Here’s our guide on making the decision between internal and external recruitment in 2025.
What’s the Difference Between Internal and External Recruitment?
Internal Recruitment
When a business looks to fill a position by promoting or transferring an existing employee to another role, the key aspect of internal recruitment is that someone already employed by the business fills the vacancy.
External Recruitment
When an employer looks to fill a vacancy from an applicant outside of the business, familiar sources of external recruitment involve advertising a position on job boards or employing a recruitment agency.
Internal Recruitment Advantages:
Internal recruitment can be cheaper
Potentially, the biggest reason internal recruitment is so common is that it usually works out cheaper. Employers can save money by internally promoting as they can often get away with offering a slight pay rise to the employee for the new role, rather than paying the industry standard for the position.
Current employees take less time to get up to speed
Induction processes do take time for new staff, and it can take a new employee a while to get used to the organisation before they start performing to their potential. Internal recruitment can get around this by putting an employee into a position that will hit the ground running.
Internal recruitment can be quicker
Considering candidates that you already know the strengths and weaknesses of can mean a quick decision on who is suitable to fill the position. Often if a business considers internal recruitment, they will already have someone in mind from their current staff.
Motivates current staff
A business with a culture of internally promoting when the time is right can incentivise staff to work harder if they think their work will be rewarded. In both the consideration period and everyday work, employees tend to work harder if they feel they are working towards something.
Internal Recruitment Disadvantages:
Limited applicant pool
The biggest limitation with internal recruitment is that you only have your current employees to choose from. External recruitment can provide candidates from literally anywhere, giving you the best chance of making the right hire.
It can be hard to reject internal candidates
Choosing one current employee over another for a position can cause resentment for the person not picked for the promotion. For more tips around rejecting candidates, including current employees, read our guide to rejecting candidates here.
Internal recruitment creates another vacancy to fill
Transferring an employee from one area of your business to another means that another role will need to be filled. This often solves one problem by creating another!
External Recruitment Advantages:
New people bring new ideas
Business processes can become stale if new people aren’t brought in to innovate and improve ways of doing things. This is especially significant in creative or technical industries where businesses must keep up with and beat competitors to survive. Poaching a competitor’s staff can provide your business with insight into your competitor’s processes and methods, which can be a key strategy in keeping your business ahead of the curve. Alongside this, new staff can bring new connections and sales leads to your business.
More sophisticated recruitment process
Hiring through a specialised recruitment agency can bring with it expertise in recruitment which you wouldn’t necessarily get in-house. The use of psychometric tests, bespoke interviewing and independent validation can help you find someone who will actually perform for your business.
A wider number of candidates
Advertising a vacancy properly through a number of job boards and other applicant sources will provide a much larger range of candidates to choose from than internal recruitment sources. Without reviewing a large range of applicants, you don’t know what you’re missing out on!
External recruitment can also be motivating
Hiring a new manager in your organisation will motivate the employees that will be reporting to the new manager. Everyone’s experienced working under a new boss and trying to impress them!
External Recruitment Disadvantages:
External recruitment can take longer
It will indeed take longer to recruit after advertising for the job externally. This is natural as you have to go through the process of advertisement, consideration, and decision-making to effectively recruit from outside of the business. Although, in the cases where you won’t have an employee who is right to be promoted, you will have to go through this time period no matter how you recruit.
It can cost to advertise
There are more costs involved with external recruitment as most job boards charge for advertising. However, nearly always, the price of advertising for finding the right candidate is well worth it.
Things To Consider:
Combining internal and external recruitment
There’s no reason why you can’t combine internal and external recruitment! For the majority of cases, the most effective recruitment strategies will utilise consideration of both internal and external candidates. After all, deciding between the two methods needs to be done on a case-by-case basis. There will be times when you have a current employee who will be a perfect fit for a new vacancy, and equally, there will be times when you will need to look elsewhere.
Even if you think you have someone in mind for a position, it can be worth looking at external sources to see how that person compares to the competition.
Cost debates between internal and external recruitment
Most people would argue that external recruitment costs more than internal promotion. However, this isn’t necessarily true. Considering a more comprehensive range of candidates through external recruitment can reveal someone who is right for your business and costs less. Over the years, we’ve found an array of candidates who have the right experience for a role and are looking for a salary below our client’s budgets.
As well as this, internal recruitment usually leaves your business a ‘man down’ in another area, which will need to be filled by another recruitment process. It can be hard to keep shifting people around in your business, and you will usually need to consult an external recruitment source no matter what you do!
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Date published: 3rd March 2025
by Sophie Jones
Associate Director
About the author
Sophie Jones
Sophie is an Associate Director at Aaron Wallis, and her main focus is to help clients find the best sales talent while ensuring that candidates secure the best professional fit. Sophie doesn't just fill vacancies; she strives to understand her clients' business goals, and she identifies candidates who will not only excel in the role but also contribute to the company's long-term success. Maintaining open communication is crucial, and Sophie ensures that clients are well-informed throughout the recruitment process, addressing any concerns and ensuring that expectations are met. She's a trusted advisor, and her ability to build bridges, solve problems, and advocate for success makes her an invaluable asset in the World of sales recruitment.
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