What's the advantage and disadvantage of the internal recruitment sources?

Recruiting qualified and talented candidates is a key to the future success of your company.  One method of filling new or open positions is to use internal recruitment. But before you promote from within, understand the advantages and disadvantages that internal recruiting offers.

When you promote from within or fill new positions with internal candidates, there is a positive effect on staff morale, notes the HR Cap website. Employees feel that the company rewards hard work by offering an opportunity to take on new responsibilities or move to a department in which an employee has an interest. Internal recruiting also can inspire employees to perform at peak productivity. When the reward is an opportunity to move into a better position, the staff will work hard to maintain a high level of productivity.

Internal recruiting has a lower cost to the company than looking outside the company, according to the HRM Notes website. To advertise a job to the existing staff, the human resources department only needs to post the job on a company bulletin board and circulate the opening on the company intranet. Recruiting external candidates requires the cost of advertising in external media such as newspapers, magazines and websites. There is also the cost of the human resources professional's time to screen candidates and the departmental manager's time to do initial interviews.

When new positions open within the company, managers have the opportunity to bring in new candidates who offer a different point of view from the existing staff. When you recruit internally, you are working with the same set of ideas that you had when the process started. Internal recruiting has a way of limiting the flow of new ideas into a company that can help to spur growth and development.

Internal recruitment can offer incentive for employees to perform well, but it also can create an atmosphere of competition that can be counterproductive. Employees may feel pressured to compete with each other to be considered for a position during an internal recruitment process, and this can create conflict. While the potential is there to improve morale with internal recruitment, it could turn the other way and help to lower morale because employees become focused on competing for jobs rather than trying to become proficient at their current positions.

Miss Lorraine has given a very good answer. Internal recruitment would mostly be done to fill vacancies where your own workers fit the requirement. It is a sort of promotion & good for morale of the workers. You have a very good grasp of the capabilities of your own staff & hence you can match these to the higher job profile. The internal recruit would also be well aware of the company culture & needs no time to adjust to his new job & environment.

However there are a few disadvantages. Firstly you do not gat any fresh/new ideas. A person recruited from outside would usher in new ideas based on his experience in other companies which is of considerable advantage. Secondly the internal recruit may not be the best option due to limited number of candidates to choose from. You may need to widen your search outside. Thirdly you may be introducing a new department for which you may not have the right fit. Lastly internal recruits may take things for granted & take more liberties & shortcuts.

totally agree with miss Loraine Domingo answer

Advantages of Internal Sources

1. It is time saving, economical, simple and reliable.
2. There is no need of induction training because the candidate already knows everything about the organisation, the work, the employee, the rules and regulations, etc.
3. It motivates the employees of work hard in order to get higher jobs in the same organisation.
4. It increases the morale of the employees and it improves the relations in the organisation.
5. It reduce executive turnover.
6. It develops loyalty and a sense of responsibility.

Disadvantages of Internal Sources

1. It prevents new blood from entering the organisation. New blood brings innovative ideas, fresh thinking and dynamism into the organisation.
2. It has limited scope because it is not possible to fill up all types of vacancies from within the organisation.
3. The position of the person who is promoted or transferred will be vacant.
4. There may be bias or partiality in promoting or transferring persons from within the organisation.
5. Those who are not promoted will be unhappy.
6. The right person may be promoted or transferred only if proper confidential reports of all employees are maintained. This involves a lot of time, money and energy.

I certainly concur with Lorraine Domingo but just to add to that here a few more pointers;

• Upward mobility within the same company is motivating especially when it is supported by top management.
• The strengths and weaknesses of potential candidates is already known therefore making it easier to evaluate the skills and abilities of the internal candidates
• Orientation and induction is limited and time saving.
• Cost effective.

the other end of the spectrum presents a different set of disadvantages for instance;

• Resentment among colleagues that have been left out of the promotion (internal politics).
• Internal recruitment still leaves another position open.
• Pool of candidates is limited internally.
• Limited range of experience for internal employees
• Narrowing of thinking and stale ideas
• Training will be needed and a learning curve for job duties
• Difficult to do with rapid growth