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With the average new hire costing £6,000 and a tighter grip on spending, organisations cannot afford always to look externally to recruit. In this insight, we look at the key differences between internal and external recruitment to make you think about the best course of action for the vacancies you want to fill.
According to the CIPD’s latest Labour Market Outlook, 42% of organisations struggle with hard-to-fill vacancies. However, with the average new hire costing £6,000 and a tighter grip on spending, organisations cannot afford always to look externally to recruit.
In this insight, we look at the key differences between internal and external recruitment to make you think about the best course of action for the vacancies you want to fill.
Candidate Sourcing – The Stats
Starting with some research to understand candidate sourcing activities, the UK Candidate Attraction Report 2023 asked respondents, ‘When presented with a new job to work on, what are the tools reached for first, and what do you do to expand your reach’?
Respondents chose from a list of candidate sourcing activities and were asked to identify the actions they regularly perform and to sort them into their order of priority. The aim was to identify their sourcing workflow. When presented with a vacancy, the typical in-house sourcing workflow top 3 activities, in order, were:
Advertise the job on website/careers site (83%)
Advertise the job internally (75%)
Use a multi-posting service (17%)
In-house recruiters head to their website to advertise jobs on their careers site and look to their existing candidate database much later, possibly missing out on a wealth of easy-to-match candidates. Advertising jobs internally is performed later once the post has been advertised on the website/careers site.
Let’s have a quick round-up of internal and external recruitment.
Internal recruitment
Internal recruitment is when companies look for qualified talent within the organisation to fill job positions. This might be by promotion, job transfer or secondment.
Internal recruitment is often done through internal job adverts published via internal emails, internal business platforms/websites, and notice boards.
Internal recruitment is often a more cost-effective route. It eliminates the cost of advertising the vacancy, screening volumes of applications, conducting interviews, and onboarding. However, recruiting from within often leaves a vacant position to fill elsewhere.
Other advantages aside from cost include that it can be a quicker process dependent on industry, job requirements and the market. Applicants already in the business will have a certain level of engagement with the company brand and values, often with experience in the role.
Recruiting internally can help with turnover rates as it demonstrates a career path for employees to boost retention in the ongoing economic climate.
External recruitment
External recruitment is often done by publishing vacancies on a company careers site, job boards, LinkedIn and social media advertising, paid online advertising, and recruitment agencies.
Using the channels available for external recruitment may open up a larger pool of candidates and a fresh skill set, but it comes at a price. Not only monetary but also the time taken with multiple applications to review, interviews and checks to complete – and potentially unsatisfactory results if the sourcing channel of choice is not delivering the desired results.
What does the data say?
When looking at the best methods for sourcing candidates, knowing your recruitment data and evaluating the options is recommended before jumping to your ‘go-to’ methods of candidate sourcing.
• Understand what sourcing activities deliver the best quality/quantity of candidates – by role type, location, grade, etc.? Do you get better results from one channel over another for a particular role or region?
• What is your cost of hire by channel, and what are the opportunities to reduce this or use an equally effective channel at a lower cost?
• Is there a skills gap for a particular role that impacts the number of candidates who apply? If so, is this something that can be recruited internally by upskilling existing staff?
Recruitment data should be a priority as recruitment budgets come under strain. Regular measurement and understanding of channel effectiveness will improve the quality and quantity of candidates and mitigate unnecessary spending when you might already have the perfect candidate within your organisation.
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