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Explain the Internal and External Sources of Employee Recruitment - ilearnlot

Explain the Internal and External Sources of Employee Recruitment!

Learn What? Explain the Internal and External Sources of Employee Recruitment!


The searching of suitable candidates and informing them about the openings in the enterprise is the most important aspect of the recruitment process. The Concept of the study Explains – the Internal and External Sources of Employee Recruitment: Internal Sources and their advantages and disadvantages, External Sources and their advantages and disadvantages. Now, Explain the Internal and External Sources of Employee Recruitment!

The candidates may be available inside or outside the organization. Basically, there are two sources of recruitment i.e., internal and external sources.

(A) Internal Sources:

Best employees can be found within the organization… When a vacancy arises in the organization, it may be given to an employee who is already on the payroll. Internal sources include promotion, transfer and in certain cases demotion. When a higher post is given to a deserving employee, it motivates all other employees of the organization to work hard. The employees can be informed of such a vacancy by internal advertisement.

Key Points on Internal sources of recruitment:

Internal sources of recruitment are:

  • Publicity: Publicity means to give the employee a higher position, position, salary, and responsibility. Therefore, the vacancy can be filled up by promoting the right candidate of the same organization.
  • Transfer: The meaning of shifting means employment change, position, pay and change in the place of employment without the employee’s responsibility. Therefore, vacancies can be filled by transferring the suitable candidate of the same organization.
  • Internal advertising: Here, the vacancy is advertised within the organization. Existing employees are asked to apply for the vacancy. So, it is recruited from within the organization.
  • Retired Manager: Sometimes, retired managers can be remembered for a short period. This is done when the organization cannot find the suitable candidate.
  • Remember with a long leave: The organization can remember a manager who has gone on a long leave. This is done when the organization has to face a problem which can only be solved by that particular manager. After solving the problem, his leave has been increased.

Methods of Internal Sources:

The Internal Sources Are Given Below:

  1. Transfers:

The transfer involves shifting of persons from present jobs to other similar jobs. These do not involve any change in rank, responsibility or prestige. The numbers of persons do not increase with transfers.

  1. Promotions:

Promotions refer to shifting of persons to positions carrying better prestige, higher responsibilities, and more pay. The higher positions falling vacant may be filled up from within the organization. A promotion does not increase the number of persons in the organization.

A person going to get a higher position will vacate his present position. The promotion will motivate employees to improve their performance so that they can also get the promotion.

  1. Present Employees:

The present employees of a concern are informed about likely vacant positions. The employees recommend their relations or persons intimately known to them. Management is relieved of looking out prospective candidates.

The persons recommended by the employees may be generally suitable for the jobs because they know the requirements of various positions. The existing employees take full responsibility for those recommended by them and also ensure their proper behavior and performance.

Advantages of Internal Sources:

The Following are The Advantages of Internal Sources:

  1. Improves morale:

When an employee from inside the organization is given the higher post, it helps in increasing the morale of all employees. Generally, every employee expects promotion to a higher post carrying more status and pays (if he fulfills the other requirements).

  1. No Error in Selection:
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When an employee is selected from inside, there is the least possibility of errors in selection since every company maintains the complete record of its employees and can judge them in a better manner.

  1. Promotes Loyalty:

It promotes loyalty among the employees as they feel secure on account of chances of advancement.

  1. No Hasty Decision:

The chances of hasty decisions are completely eliminated as the existing employees are well tried and can be relied upon.

  1. The economy in Training Costs:

The existing employees are fully aware of the operating procedures and policies of the organization. The existing employees require little training and it brings economy in training costs.

  1. Self-Development:

It encourages self-development among the employees as they can look forward to occupying higher posts.

Disadvantages of Internal Sources: 

  • It discourages capable persons from outside to join the concern.
  • It is possible that the requisite number of persons possessing qualifications for the vacant posts may not be available in the organization.
  • For posts requiring innovations and creative thinking, this method of recruitment cannot be followed.
  • If the only seniority is the criterion for promotion, then the person filling the vacant post may not be really capable.

In spite of the disadvantages, it is frequently used as a source of recruitment for lower positions. It may lead to nepotism and favoritism. The employees may be employed on the basis of their recommendation and not suitability.

(B) External Sources:

All organizations have to use external sources for recruitment to higher positions when existing employees are not suitable. More persons are needed when expansions are undertaken.

Key Points on External sources of recruitment:

External sources of recruitment are:

  • Management Consultants: Management Consultants are used to selecting high-level employees. They act as the employer’s representative. They make all necessary arrangements for recruitment and selection. In return for their services, they take a service fee or commission.
  • Public Advertisement: The company’s personnel department advertises vacancies in newspapers, internet, etc. This advertisement gives information about the essential qualities of the company, the job, and the candidate. It invites applications from suitable candidates. This source is the most popular source of recruitment. That’s because it gives a very wide choice. However, it is very expensive and time-consuming.
  • Campus recruitment: The organization organizes interviews in the premises of the management institutes and engineering colleges. Interviews are given for final year students, who are soon to get graduation. Proper candidates are selected by the organization on the basis of their academic records, communication skills, intelligence etc. This source is used for the recruitment of qualified, trained but inexperienced candidates.
  • Recommendations: The organization can recruit candidates on the basis of recommendations from existing managers or sister companies.
  • Deputation Personnel: The organization can also recruit the candidates sent on deputation by the government or financial institutions or by holding or subsidiary companies.

The external sources are discussed below:

Methods of External Sources:

  1. Advertisement:

It is a method of recruitment frequently used for skilled workers, clerical and higher staff. Advertisement can be given in newspapers and professional journals. These advertisements attract applicants in a large number of highly variable quality.

Preparing good advertisement is a specialized task. If a company wants to conceal its name, a ‘blind advertisement’ may be given asking the applicants to apply to Post Bag or Box Number or to some advertising agency.

  1. Employment Exchanges:
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Employment exchanges in India are run by the Government. For unskilled, semi-skilled, skilled, clerical posts etc., it is often used as a source of recruitment. In certain cases, it has been made obligatory for the business concerns to notify their vacancies to the employment exchange. In the past, employers used to turn to these agencies only as a last resort. The job-seekers and job-givers are brought into contact by the employment exchanges.

  1. Schools, Colleges, and Universities:

Direct recruitment from educational institutions for certain jobs (i.e. placement) which require technical or professional qualification has become a common practice. A close liaison between the company and educational institutions helps in getting suitable candidates. The students are spotted during the course of their studies. Junior level executives or managerial trainees may be recruited in this way.

  1. Recommendation of Existing Employees:

The present employees know both the company and the candidate is recommended. Hence some companies encourage their existing employees to assist them in getting applications from persons who are known to them.

In certain cases, rewards may also be given if candidates recommended by them are actually selected by the company. If recommendation leads to favoritism, it will impair the morale of employees.

  1. Factory Gates:

Certain workers present themselves at the factory gate every day for employment. This method of recruitment is very popular in India for unskilled or semi-skilled labor. The desirable candidates are selected by the first line supervisors. The major disadvantage of this system is that the person selected may not be suitable for the vacancy.

  1. Casual Callers:

That personnel who casually come to the company for employment may also be considered for the vacant post. It is the most economical method of recruitment. In the advanced countries, this method of recruitment is very popular.

  1. Central Application File:

A file of past applicants who were not selected earlier may be maintained. In order to keep the file alive, applications in the files must be checked at periodical intervals.

  1. Labour Unions:

In certain occupations like construction, hotels, maritime industry etc., (i.e., industries where there is instability of employment) all recruits usually come from unions. It is advantageous from the management point of view because it saves expenses of recruitment. However, in other industries, unions may be asked to recommend candidates either as a goodwill gesture or as a courtesy towards the union.

  1. Labour Contractors:

This method of recruitment is still prevalent in India for hiring unskilled and semi-skilled workers in brick kiln industry. The contractors keep themselves in touch with the labor and bring the workers to the places where they are required. They get the commission for the number of persons supplied by them.

  1. Former Employees:

In case employees have been laid off or have left the factory on their own, they may be taken back if they are interested in joining the concern (provided their record is good).

  1. Other Sources:

Apart from these major sources of external recruitment, there are certainly other sources which are exploited by companies from time to time. These include special lectures delivered by the recruiter in different institutions, though apparently, these lectures do not pertain to recruitment directly.

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Then there are video files which are sent to various concerns and institutions so as to show the history and development of the company. These films present the story of the company to various audiences, thus creating interest in them.

Various firms organize trade shows which attract many prospective employees. Many a time advertisements may be made for a special class of workforce (say married ladies) who worked prior to their marriage.

These ladies can also prove to be the very good source of the workforce. Similarly, there is the labor market consisting of physically handicapped. Visits to other companies also help in finding new sources of recruitment.

Advantages of External Sources:

  1. Availability of Suitable Persons:

Internal sources, sometimes, may not be able to supply suitable persons from within. External sources do give a wide choice to the management. A large number of applicants may be willing to join the organization. They will also be suitable as per the requirements of skill, training, and education.

  1. Brings New Ideas:

The selection of persons from outside sources will have the benefit of new ideas. The persons having experience in other concerns will be able to suggest new things and methods. This will keep the organization in a competitive position.

  1. Economical:

This method of recruitment can prove to be economical because new employees are already trained and experienced and do not require much training for the jobs.

Disadvantages of External Sources:

  1. Demoralisation:

When new persons from outside join the organization then present employees feel demoralized because these positions should have gone to them. There can be a heart burning among old employees. Some employees may even leave the enterprise and go for better avenues for other concerns.

  1. Lack of Co-Operation:

The old staff may not co-operate with the new employees because they feel that their right has been snatched away by them. This problem will be acute especially when persons for higher positions are recruited from outside.

  1. Expensive:

The process of recruiting from outside is very expensive. It starts with inserting costly advertisements in the media and then arranging written tests and conducting interviews. In spite of all this if suitable persons are not available, then the whole process will have to be repeated.

  1. The problem of Maladjustment:

There may be a possibility that the new entrants have not been able to adjust to the new environment. They may not temperamentally adjust with the new persons. In such cases either the persons may leave themselves or management may have to replace them. These things have the adverse effect on the working of the organization.

Suitability of External Sources of Recruitment:

External Sources of Recruitment are Suitable for The Following Reasons:

  • The required qualities such as will, skill, talent, knowledge etc., are available from external sources.
  • It can help in bringing new ideas, better techniques and improved methods to the organization.
  • The selection of candidates will be without preconceived notions or reservations.
  • The cost of employees will be minimal because candidates selected in this method will be placed on the minimum pay scale.
  • The entry of new persons with varied experience and talent will help in human resource mix.
  • The existing employees will also broaden their personality.
  • The entry of qualitative persons from outside will be in the long-run interest of the organization.
Explain the Internal and External Sources of Employee Recruitment - ilearnlot
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