Internal VS External Recruitment: Which Process Should You Choose?

There are two main factors a business must consider when deciding whether to internally or externally recruit candidates; quality and cost. Your company must decide which process which will be the most cost effective, whilst also successfully securing quality candidates. You must ensure you hire the most suitable candidate for the position in order to; positively influence operational productivity and avoid spending more money in the future due to a poor hiring decision. 


If you’re reading this article it’s because you want to learn when and why a business would choose to insource or outsource. Maybe you’re a manager, executive, CFO or CEO. Regardless of your title, you’re a decision maker at a crossroad. I bet your mind is flooded with questions similar to Do I build upon my internal resources to internally recruit? Or do I source candidates through external parties?. By the end of this article, you should have some clarity on the best method for your business.


The method of choice depends entirely on what you think will provide you with the best outcome. What do you think will give you the greatest quality candidates at the best price?


External Recruitment


If you’re considering hiring an external agency to complete your recruitment needs, it’s because you’re not sure if you have an employee that will; accurately represent the company values and goals, have the skills to recruit, or attract the desired target market.


HR is an umbrella term used to describe handfuls of positions… all of which require different skills and capabilities. This can be said about any department, however, is extremely important to note in HR. Whilst your HR manager or employees may be fantastic at juggling their responsibilities and completing their tasks to a high standard, they may not have the skill to efficiently hire new employees. It’s impossible for one individual to possess all the skills necessary to fill all positions, that’s why there’s so many different roles!


Attracting Talent


Some HR employees have better people skills and are more naturally charming than others. Some HR employees are a powerful asset in creating strategies and implementation tactics. It’s the way of life, if we all had the exact same skill set we would struggle to build a dynamic team. Therefore, you may consider external recruitment if you believe your current employees cannot be the advocate, and representative that your business needs in order to effectively attract and acquire the most desirable talent.


Attracting desirable candidates is crucial for the success of your business, especially in a competitive industry. For example, if you and your competitor are currently hiring for a similar position at the same time, you’re both dipping into the same potential candidate pool. Both you and your competitor are searching for the most suitable candidate for your company, and whilst your cultural environment may slightly differ what the “most suitable candidate” profile is, the hard skills are going to be close to identical.


Therefore, you need to ensure your business is attractive to your suitable candidate. The most attractive you can be. I mean imagine you’re meeting your partners parents for the FIRST TIME, that’s the sort of expectations I want you to imagine and attempt to uphold to. Recruitment isn’t a one-way road, it’s two ways. Yes, you need to want the candidate to work for you, but the candidate must also want to work for you. (PS. This is where candidate experience comes into play)


If you don’t have strong internal recruiters to attract the right talent annnd convince them that working for your company is in their best interest, you may miss out on hiring the best available talent. Thus, the decision to internally or externally hire is critical and constantly reviewed by executives.


Service Level Agreement 


Now, if this sounds like you, and you’ve decided to externally recruit, it’s PIVOTAL you set up a Service Level Agreement. This needs to be clear and explicitly detailed. You must create the SLA in order to be certain your company will receive what your external recruiters are promising. The SLA keeps both parties accountable for the deliverables they promised. Make sure details regarding the total cost, time acceptable for each cost and all parameters in-between are articulated in your SLA.


Internal Recruitment 


If you’ve decided you’re going to build your internal recruitment department and invest into employees who will source and attract the most suitable candidates, there’s a few things you must know.


HR, Managers, Executives as a Cohesive Unit


The only way your internal recruitment will be successful is if HR, managers and executives work as a cohesive unit. It’s like a train, if one chain isn’t well oiled and working properly, it will either force the train to stop or bring down the efficiency of the speed, therefore resulting in greater amounts of time needed to cross the finish line. The same can be said about internal recruitment… if your HR, managers and executives aren’t working in a well-oiled environment, with a foundation built from collaboration, it will result in poorer quality candidates hired and longer time-to-hire (which leaves room for your competitors to swoop in and steal your candidates). 


Therefore, when building your internal recruitment department, you must implement strategies and tools that encourage collaboration, productivity and accountability. Remember; time is money. The time a) needed by employees to complete their recruitment tasks, and b) the company has with a vacant position that needs filing, continuously adds to the cost of internal recruitment. In order to lower this cost, it’s in the best interest to utilise tools that encourage collaboration, which increases productivity, and holds employees accountable for mishaps.  


Accountability in Recruitment


Accountability…what does this mean in regard to recruitment? As I said, recruitment isn’t easy because it’s not a one-step process. There are multiple steps and multiple processes within the overarching process. There are many areas of recruitment where multiple people must view and approve information or documentation before it’s possible to move forward to the next step (for example, think about your requisition process).


During this process, it’s easy to lose track of who needs to complete what and by when. This is when mistakes occur which disadvantage a business. If there’s many divisions, and minimal alignment, the lack of cohesiveness of your internal recruitment team will result in disfunction, therefore recruitment failure.


In order to combat this, you must utilise tools that promote collaboration, productivity and accountability. Tools such as recruitment software.


Recruitment Software


Collaboration & Productivity


There can be multiple users utilising your recruitment software simultaneously, meaning the manager can view what HR is doing LIVE and be notified about their actions instantly. This improves productivity by reducing the time required for actions to take place on each step of the process.


As well as this, it enforces collaboration between all users, regardless of their location (for those working from home). Collaboration occurs as multiple users can be on the platform at the same time and, if all online at the same time, work collaboratively on reviewing applications and making digital notes on their thoughts for others to view and annotate.




However, arguably, the most important outcome of recruitment software is the accountability it entails. Your recruitment software is completely trackable, and each action has reporting capabilities. Therefore, it’s not difficult to discover if someone doesn’t complete their tasks or uphold their responsibilities.


For example, let’s pretend you didn’t hire a candidate within the given timeframe. Why? Well… your recruiters say the managers didn’t give them feedback or the go ahead on the candidates they suggested, but your manager says the recruiters didn’t request any feedback. The solution? Check your recruitment software. Now you’ve logged in you can see there’s 12 candidates shortlisted and waiting for the managers approval before they can be contacted and interviewed. Boom. Now you know who’s responsible.


Not only is this useful in solving problems, but it’s useful in preventing them. When an employee knows they’re directly & solely responsible for completing a task, and it’s easy to determine whether it’s been complete, it acts as a deterrent from NOT doing the task as they know there will be consequences. Boom. Now you’ve established employee responsibility.  


Recruitment software also allows you to refine your candidate selection through search fields and talent pools… but we’ll dive into this another time.


Final Take-Aways


So, if you’ve decided to internally recruit, remember this: It’s not enough to have team that a) get along, b) work hard and c) are skilful, you must provide them with the tools they need to succeed. If you don’t provide them with the tools necessary, you provoke insourcing mishaps.  


Ladies & gentlemen, there you have it… a serious diagnosis of internal and external recruitment. Whatever decision you make, remember to analyse the cost benefit and quality demand. And yes, you must invest time and money into the recruitment process, but it’s worth it because the candidate you employ will directly impact the business’s success.


Choose your recruitment strategy wisely… and work smarter, not harder.