Internal hiring involves filling roles by promoting top-talent employees already within the organisation. You may still host interviews and internal assessments, but you needn’t vet candidates for their cultural fit.

 

 

External hiring is probably the most common and familiar form of recruitment. By advertising job descriptions and hosting interviews, companies hire new professionals from outside of their organisation. Did you know? Employee referrals still count as external hiring, even if the candidate knows someone within your business. But this tactic can help to expedite the external recruitment process.

 

At Hays, I focus on delivering consistent, world-class resourcing solutions to clients, regardless of geographic location. My plan is to build a globally aligned strategy that supports evolution and growth. This approach combines investment in people, processes, and technology.

 

Establishing a strong senior leadership team is essential for driving business development. Getting just one individual wrong would have threatened the whole recruitment strategy. One bad hiring decision is all it takes to affect the positivity and productivity of the entire team. I needed to make sure that everyone would be pulling in the same direction and supported by the wider business from the start.

 

The first question I asked myself was whether I wanted to use internal hiring or external hiring when sourcing candidates. As I saw it, both routes have their benefits and drawbacks. Here's what I found when considering what is internal hiring versus external hiring.

 

I’m a huge advocate of internal promotion. After all, internal promotions have got me to where I am today. The advantages of internal recruitment include:

 

Internal staff have a better business understanding: Those who have been with the business for some time should already understand the processes and systems. These employees are ingrained in your business’s culture. They will have a comprehensive understanding of its values and ambitions. This existing knowledge helps to make the onboarding process a lot smoother for the employer.

 

Rewarding loyalty can inspire other employees: Rewarding top-talent employees within your business demonstrates that you care about their career progression. This approach shows that there are many more rungs on the career ladder within the business for team members to aspire to.

 

As a result, your team are likely to have higher employee morale and remain loyal to the business. In fact, a study found that external hires are 61% more likely to be laid off or fired in their first year or service and are 21% more likely to leave the business.

 

Internal hiring can be more cost-effective and save time: Identifying the skill sets you need internally can save time reviewing applications and CVs. You can speed up the interview process and won’t need to ask for references. You might also save money on outsourced recruitment fees.

 

What’s more, internally promoted employees won’t require as much training or onboarding as external candidates. This approach invariably saves both time and money. What’s more, organisations that promoted internally are 32% more likely to be satisfied with the quality of their new hires.

 

Potential lack of fresh ideas: Internal hiring is not without its limitations. Relying on the same talent pool may stifle access to fresh ideas and specialised skills that external candidates can offer.

 

By hiring externally, you give yourself access to a far larger talent pool. This is particularly important if you are looking to fill an immediate skills gap. A popular approach is to first look within the business for employees with the relevant skills. Only broaden your search to include external qualified candidates if you cannot hire in-house.

 

New recruits bring fresh perspectives and innovative ideas: Perhaps the biggest benefit of external recruiting is the new variety of perspectives. Each new hire will have accrued a number of skills and expertise from their previous employer. By combining all of these insights, you can repeatedly come to the best and most efficient practices, rather than just leaning into tried-and-tested methods. 

 

External insights offer competitive advantage: Hiring team members from competitors helps to provide you with some perspective on how effective your strategy really is. It’s easy in a familiar team to become insular. Market leaders may think they have nothing to learn from rival organisations.

 

However, with external insights, you may find that someone else has a leaner, more cost-effective or customer-focused approach. And, if they don’t, you’ll reaffirm that your business processes are already the most efficient and streamlined.

 

Increased diversity: Improving diversity can strengthen a business from within and improve external perceptions. For example, gender-diverse companies are 15% more likely to outperform their less-diverse counterparts. Mirroring the diversity of your customer base can also bring benefits as you can better understand and meet their needs.

 

Costly onboarding processes: However, the limitations of external hiring do present themselves. This approach requires more time investment, training and financial resources compared to internal hiring.

 

Both team-building methods have clear benefits. Having considered both approaches, I decided to use a mix of external and internal candidates.

 

A mix of the two would provide for the most diverse and dynamic team possible. I hosted a thorough assessment process for each position to identify the perfect candidate for the role. Having now completed the process, I feel we have a great team to support our future business growth.

 

The team members that I promoted internally have helped to embed external hires into our company culture and processes. The new blood brought in from outside has contributed fresh perspectives and suggestions to the team. Rapidly aligning a team comprised of many different backgrounds is no mean feat. The next step is ensuring everyone’s priorities align and that the team works toward collective goals.

 

 

Or get in touch to discuss how we can help.

 

 

AUTHOR

Matthew Dickason
CEO (APAC), Hays
Matthew joined Hays in 2005 and is responsible for leading operations across Australia, New Zealand and Asia. The business works closely with strategic clients around the world to help them navigate the changing world of work and optimise their businesses for the success. Key is ongoing investment and collaboration to ensure clients retain a competitive advantage in talent acquisition and human capital strategies from the delivery of Hays Resourcing and Advisory services.

Prior to joining Hays, Matthew worked within Engineering, Research, Operations and Commercial areas at Johnson Matthey and Corning Inc. He holds degrees in Organisational Psychology, Philosophy, and Industrial Engineering.