Benefits and limitations of internal sources of recruitment

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What are the advantages and disadvantages of internal sources of recruitment?

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Advantages of Internal Sources of Recruitment

a) Familiarity—The organisation and its employees are familiar to each other. The organisation knows the ability and skills of the likely candidates since they are insiders - Similarly, employees also know about the working conditions and job requirements of the vacancies.

b) Better utilisation of internal talent—Reliance on internal recruitment enables the enterprise to make the best use of the capabilities of its employees. For example, some employees may be so talented that they deserve, promotion, or some may do better on transfer to other jobs.

c) Economy—The cost of recruiting internal employees is minimal. The enterprise need not incur any expenditure on informing and inducing its employees to apply.

d) Motivational value—Internal recruitment is a source of encouragement and motivation for employees. The employees can look for promotion and transfer with hope and thereby do their jobs well so as to earn the desired promotion/transfer.

Limitations of Internal Recruitment

a) Restricted Choice—Internal recruitment restricts the options and freedom for the enterprise in choosing the most suitable candidates for the vacancies. It has a narrow base. The enterprise may have to compromise on quality of its choice of candidates.

b) Inbreeding—If the enterprise depends too much on internal recruitment, it means that the enterprise denies itself fresh talent and 'new blood' available outside. Existing employees, even if promoted or transferred may continue to work and be behave in the same habitual ways, without any dynamism.

c) Absence of Competition—In the absence of competition from qualified candidates from outside employees are likely to expect automatic promotion by seniority and sure prospect. Thus they may lose the drive for proving their worth.

d) Conflict—There may be chance of conflict and infighting among those employees who aspire for promotion to the available vacancies. Those who are not promoted are unhappy and their efficiency may decline.

e) Actually an enterprise cannot fully rely on internal sources of recruitment. Suitable candidates may simply not to be available internally for some vacancies. In such cases, the enterprise has to look for external sources of recruitment.