Which sources of recruitment should you use in your hiring process?

Luke Warner

With a variety of channels at your fingertips, deciding which sources of recruitment to leverage during your hiring process can feel like an overwhelming task. And with the rapidly shifting hiring market, you don't want to waste precious time or resources on channels that don't have great ROI.

Today we’ll dive into:

  • the two main sources of recruitment, internal and external,

  • their advantages and disadvantages

Internal Sources of Recruitment

You're probably familiar with internal promotions, transfers, or re-hires, more formally known as internal recruitment. Any time a company invites applications from employees working at the current company is an internal recruitment source.

Two types of internal sources of recruitment: 

  • Promotions

  • Lateral moves

Advantages of internal recruitment

Internal recruitment can be incredibly effective for teams with strong performers and more complicated products or processes that take a ramp-up period to become familiar with. 

However, they can be incredibly useful in saving time and money for developing and hiring new team members. 

The most significant advantages of internal recruitment are: 

  1. Cost-savings

  2. Shorter hiring process as you are already familiar with the candidate's work

  3. Shorter or no onboarding process

  4. A morale booster for existing employees

Disadvantages of internal recruitment

The following are some of the disadvantages of internal sources:

1. Internal recruitment can potentially reduce the morale of those employees who are not selected or considered.

2. Less innovation (promotes more homogeneity if you're only promoting and not hiring externally)

External Sources of Recruitment

70% of talent is passive, so it's in your best interest to utilize every channel at your disposal when creating your recruiting process. 

When a company decides to look outside its organization, this is an external source of recruitment. External sources target both active (those actively looking for a job and applying on their own) and passive candidates (those not actively looking for a job who you email asking if they're interested in your open role).

Type of external recruitment:

There are many more external sources for companies to leverage, here are a few of the most common:

  • Employee referrals: An effective approach to hiring new employees is to encourage existing staff to refer people from their professional and personal networks as part of an employee referral program. Usually, when a referred candidate gets the job, the employee who referred them gets a reward or bonus.

  • Recruiting software: Sourcing tools, like Dover, can be used to capture passive talent that match your search criteria, typically at a volume much higher than a human recruiter. 

  • Recruiting agencies: Typically used for enterprise or executive searches, agencies typically charge a commission fee, placement fee and/or agency fee for placements.

  • Schools, colleges, or universities: 

  • Careers page on a company’s website

  • Advertisements (newspapers, job boards)

  • Professional organizations (labor unions, associations)

Advantages of external recruitment

When weighing the pros and cons of external recruiting, many of the advantages counter the disadvantages of the internal sources discussed above. The same is true for the disadvantages.

For example, while external recruiting may be more costly, you’ll have a larger candidate pool to choose from.

The advantages of external recruiting are: 

  • A larger candidate pool: as mentioned earlier, a study by LinkedIn concludes that 70% of talent is passive, so by utilizing external recruiting, you'll tap into the largest pool of candidates.

  • Opportunity for new ideas and innovation: hiring outside of your organization and its networks can help you approach old problems in creative ways, or uncover blindspots you weren't aware of before

  • More diversity: 67% of job seekers say diversity is an important factor when considering a company, and external recruitment is the best way to ensure that your pool of talent has a broad spectrum of backgrounds and demographics. 

Disadvantages of external recruitment

On the other hand, external recruitment can be more costly and time-consuming than internal sources. Additionally, external recruiting can lead to a lack of company culture fit, as well as a lack of knowledge about the company’s history and values.

The big disadvantages to consider are:

  • Cost: External recruitment is typically more expensive than internal sources, due to the cost of advertising, recruiting software, and/or agency

  • Internal frustration: If current team members are in the running or could be in the running for your position, it can potentially cause tension if there isn't a conversation about levels, experience, and career paths before you enlist external recruiting methods.

  • Mismatch in qualifications: External recruitment methods for active candidates, such as job boards, can result in lots of applications with bloated resumes or mismatched qualifications.

The Verdict? Diversify your sources of recruitment.

In a crowded hiring market, it's best to minimize risk and the ebbs and flows by diversifying your sources as much as possible (stock owners, sound familiar?) The goal should be to optimize each channel to get the most value for the cost.

For example, you can create an upskilling program for a department with lots of junior employees who will likely be promoted, retaining employees at a low cost and saving resources. In parallel, you could utilize job boards, sourcing tools like Dover, and passive outreach to folks you find on LinkedIn to get new talent and ideas through the door.

Luke Warner

Up your recruiting efforts