Management Notes

Reference Notes for Management

Sources of Recruitment – Internal and External Sources of Recruitment | Human Resource Management

Sources of Recruitment

Recruiting begins with finding suitable candidates and informing them about the openings in the company. Candidates may be available within or outside of the organization.

Recruitment is the process of actively searching for, finding, and hiring candidates for a specific position or job. In recruitment, the entire hiring process is considered, from finding a candidate to integrating them into the company.

Recruiting brings together potential employees and organizations looking for qualified candidates. In an organization, a properly implemented recruitment process results in the hiring and selection of suitable personnel.

The two main sources of recruitment are internal and external.

Internal Sources of Recruitment

Internal Sources of Recruitment

Employees who are already on the payroll may be considered for vacancies when they arise within an organization. Eligible employees can be found within an organization. A promotion, transfer, or demotion can be an internal source of employment.

It motivates all other employees of the organization to work hard when a deserving employee is promoted. Internal advertisements can inform employees about such vacancy.

Methods of Internal Sources of Recruitment

Some of the methods of internal sources of recruitment are as follows:

Methods of Internal Sources of Recruitment

Present Employees 

Present Employees  as an Methods of Internal Sources of Recruitment

↦ A concern’s current employees are informed about potential vacancies. If they know someone who is qualified, they recommend them for the position. The management is relieved of the task of finding prospective candidates.

↦ People recommended by employees may generally be suitable for the jobs since they understand the requirements of various positions.

↦ Employees who have been recommended by existing employees are held fully accountable for the behavior and performance of those they have recommended.


Transfers as a Methods of Internal Sources of Recruitment

↦ During a transfer, people are moved from their current jobs to similar ones. This does not involve a change in rank, responsibility, or prestige.

↦ The number of individuals transferred does not increase. The transfer process helps to maintain cordial relationships among employees and prevents monotony in the work of an employee. It also gets the employee acquainted with new tasks.

Some of the advantages of transfers in recruitment are as follows:

  • Employees participating in a transfer have the opportunity to gain more experience within the organization.
  • Employees are able to overcome boredom and dissatisfaction with their current job by switching jobs and taking on new responsibilities and tasks.
  • The knowledge and skills are enhanced as a result of performing a new job that requires new skills and puts different responsibilities on the worker.

Some of the disadvantages of transfers in recruitment are as follows:

  • The employee has to learn a whole new job when he is transferred.
  • This will adversely affect the productivity of the organization if the transferred employee dislikes the job, the work, or his coworkers.
  • Transferring an employee involves learning and adjusting on the employee’s part. It’s possible for employees who move into a new position to incur training expenses as well.


Promotions as a Methods of Internal Sources of Recruitment

↦ A promotion refers to the shift of a person into a position with more responsibility, prestige, and better pay. If higher positions become vacant within an organization, they may be filled from within.

↦ Promotions do not increase the number of people in an organization. If a person gets a higher position, he will vacate his current position. Employees who are promoted will be motivated to improve their performance so that they can get promoted themselves.

Some of the basis of promotions are:

  • Promotions on the basis of seniority

Promotions on the basis of seniority are based on the employee’s tenure with the company. Employees prefer this type of promotion since they are assured of promotion and a pay increase by staying with the organization for a longer period. Management, however, prefers a merit-based promotion policy.

The advantages of promotions on the basis of seniority are as follows:

  • Employees who are with the organization for a longer period of time can be promoted. This develops a sense of loyalty among the employees and improves the morale of the others.
  • Promoted employees are determined by their tenure of service. As a result, employees work efficiently to remain employed for a longer period of time.
  • It does not use controversial methods of determining employee merit.

In similar way, some of the disadvantages of promotions on the basis of seniority are as follows:

  • Employees’ skills, knowledge, abilities, performance, and productivity are not considered in this method of promotion.
  • Promotion based on short service periods damages the morale of talented and efficient employees who cannot be promoted due to their shorter tenure.
  • The number of years of service being the only criteria for promotion causes employees to try to stay within the company. This has a detrimental effect on the productivity and quality of the production process.

  • Promotions on merit basis

Employee skills, talents, knowledge, performance, and productivity are rewarded through merit-based promotion policies. Promotion is based on the quality of the services provided by employees.

Some of the advantages of promotions on merit basis are as follows:

  • Promoting on the basis of merit fosters a culture of healthy competition and productivity.
  • A promotion method like this improves production and the overall performance of the organization.
  • Promoting through this method attracts young talent to join the organization, knowing that their merit will be recognized.

Some of the disadvantages of promotions on merit basis are as follows:

  • In most organizations, there is no clear and objective way to determine and measure employee merit. Favoritism and nepotism are then able to flourish.
  • It allows the supervisors to abuse their power and engage in corrupt practices when recognizing merit. Due to this method of promotion, there is the possibility of conflict between employees and their employers.
  • In this method of promotion, employees may feel pressured to improve their performance, resulting in frustration for employees who are really efficient.

Advantages of Internal Sources of Recruitment

Some of the advantages of the internal sources are as follows:

  • Employees’ morale is boosted when an employee from within the organization receives a higher post. Most employees expect to be promoted to a higher post with additional status and pay (if they meet the other requirements).
  • Since every company maintains a complete record of its employees, there is a lower possibility of selection mistakes when an employee is selected from within.
  • The probability of advancement promotes loyalty among employees.
  • By keeping the existing employees, the chances of hasty decisions are fully eliminated since they have been thoroughly tested.
  • Existing employees are familiar with the organization’s operating procedures and policies. This results in less training costs for the existing employees.
  • It encourages self-development among employees since they can have an eye on occupying higher positions in the future.

Disadvantages of Internal Sources of Recruitment

Some of the disadvantages of internal sources are:

  • It is possible that there are not enough qualified persons in the organization to fill all the vacant posts.
  • It discourages capable individuals from outside the firm from joining it.
  • The person filling the vacant post may not really be capable if only seniority determines promotion.
  • It is not appropriate to use this method of recruitment for positions requiring innovation and creativity.

External Sources of Recruitment

External Sources of Recruitment

Employing people from outside the organization is called external recruitment. External recruiting can be done in several ways. It is important for the firm to carefully analyze the vacant positions and then decide which method best meets the requirement.

When existing employees are not suitable for higher positions, organizations must look outside for candidates. Expansions require additional personnel.

Methods of External Sources of Recruitment

Some of the methods of external sources of recruitment areas follows:

Methods of External Sources of Recruitment


Advertisement as a Methods of External Sources of Recruitment

↦ It is a method of recruiting skilled workers, clerical staff, and higher-level managers. Newspapers and professional journals can be used for advertisements.

↦ Many applicants of highly variable quality respond to these advertisements. Advertisements in newspapers, professional journals, provide a thorough description of the organization, type, and nature of the position, skills necessary, qualifications, and experience expected, etc.

↦ A person can do this to self-evaluate himself in relation to the job requirements and apply for the positions that are right for them.

Formal Educational Institutes

Formal Educational Institutes as a Methods of External Sources of Recruitment

↦ In recent years, educational institutions have become more and more familiar with direct recruitment of candidates for certain jobs (e.g. placement) requiring technical or professional qualifications.

↦ The company works closely with educational institutions to find qualified candidates. Prospective employees are spotted during the course of their studies.

↦ This usually leads to the recruitment of junior executives or managerial trainees. It has become a common practice of external recruitment to establish a close relationship with educational institutes for the recruitment of students with technical and professional qualifications.

Employment Exchange

Employment Exchange as a Methods of External Sources of Recruitment

↦ Employment exchanges are government-run offices where information on job seekers, such as their name, qualifications, experience, and so forth, is kept and provided to employers searching for men for their organizations.

↦ It is mandatory for every organization to provide detailed information about certain job vacancies to the employment exchange. External recruitment is the most common source of employment for unskilled, semiskilled, and skilled workers.

Labor Unions

Labor Unions as a Methods of External Sources of Recruitment

↦ The majority of recruits in certain occupations, such as construction, hospitality, maritime industry, etc. (i.e. industries with insecurity of employment) come from unions.

↦ A benefit from a management perspective is that it saves them money on recruitment costs. In some industries, however, unions may be asked to recommend candidates as a gesture of goodwill or out of courtesy for the union.

Recommendation of Existing Employees

Recommendation of Existing Employees as a Methods of External Sources of Recruitment

↦ Both the present employees and the candidate being recommended are familiar with the company. Some companies encourage their existing employees to refer applications from people they know.

↦ It is also possible to be rewarded if the company selects the candidates they recommend. The morale of employees will be negatively affected if recommendation leads to favoritism.

Former Employees

Former Employees as a Methods of External Sources of Recruitment

↦ Employees who have been laid off or left on their own may be taken back if they are interested in joining the company (as long as their record is good).

Direct Recruitment

Direct Recruitment as a Methods of External Sources of Recruitment

↦ Direct recruitment, also known as factory gate recruitment, is an important source of hiring, particularly for unskilled workers or daily wage workers.

↦ This involves the company posting a notice on a notice board or on the factory gate regarding the available positions, so that the applicant can see it and apply directly.

Casual Callers

Casual Callers as Methods of External Sources of Recruitment

↦ Casual callers, also known as unsolicited applications, are job seekers who approach well-known organizations in a casual manner and mail or drop off their applicant materials seeking a job opportunity.

↦ It is possible to consider this as a source of external recruitment since the personnel department maintains a file of unsolicited applications and calls those applicants who meet the job requirements as vacancies arise.

Advantages of External Sources of Recruitment

Some of the advantages of external sources are as follows:

  • It is sometimes impossible for internal sources to provide suitable candidates. External sources, however, do provide a wide range of options. The organization may be able to attract a large number of candidates. Aside from meeting the skill, education, and training requirements, they are also suitable.
  • Choosing persons from outside the organization will allow for the introduction of new ideas. People with experience in other concerns should be able to suggest new things and methods. The organization will remain competitive as a result.
  • Since new employees are already trained and experienced, this method of recruitment can prove to be economically feasible since they need little training for the jobs.

Disadvantages of External Sources of Recruitment

Some of the disadvantages of external sources are as follows:

  • It is very expensive to recruit from outside. An advertisement is placed in the media, followed by written tests and interviews. However, if suitable candidates are not found, then the whole process must be repeated.
  • It is possible that the old staff won’t cooperate with the new ones because they feel that their rights have been stolen. People for higher positions will face this problem especially when they are recruited from outside.
  • The present employees feel demoralized when new outsiders join the organization since these positions should have gone to them. It can be a heartbreaking experience for older workers. There may even be instances when employees leave the company for better opportunities elsewhere.
  • There is a possibility that new entrants have been unable to adjust to the new environment. It’s possible that their temperaments are different from the new employees. Either the person leaves themselves or the management has to replace the person. Either way, it adversely affects the working of the organization.


  • Chand, S. (2014, April 2). Recruitment: Meaning and Sources of Recruitment (with diagram). Your Article Library.
  • Recruitment process : HRM, external and internal sources. (2019, November 20). Toppr-guides.

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