What are the disadvantages of external hiring?

Advantages and disadvantages of external recruitment

This article evaluates some of the advantages and disadvantages of external recruitment. Certainly, there are many benefits to hiring employees through an outside source, which is why many businesses often use this option to fill key positions. However, there are some risks and challenges that need to be considered seriously as well.

What is external recruitment?

According to CIPD (2021) external recruitment is when a business looks to fill vacancies with any suitable applicants outside the organisation. It is about hiring people who are not currently employed by the company.

External recruitment methods (Types of external recruitment)

There are many external recruitment methods that recruiters can use. The first and a very popular method is the use of job boards. These are the sites that match job openings with candidates seeking work.

Social media help recruiters find candidates who may not otherwise be interested in the job openings. LinkedIn is the best social networking platform that connects job seekers and recruiters. However, careful planning is necessary when using social media to find candidates. Recruiters should share the job adverts regularly.

Some organisations use recruitment agencies as well. These agencies select suitable candidates for them. Some popular recruitment agencies in the UK are Huntress Group, Antal International, Nolan Recruitment, Myriad Recruitment, IT Recruit UK, Venturi-Group – IT, Adecco, Impellam, Hays, Reed, Airswift, and Asoria. The top 10 recruiting farms in the USA are Robert Half, Kelly, Korn Ferry, Aerotek, Manpower, Adecco, Randstad, Lucas Group, Kforce, and AppleOne (Kreznar, 2021).

Examples of external recruitment

Many companies around the world particularly in USA, and UK use one or more of the external recruitment methods stated above. However, one method is becoming increasing popular i.e. social media. According to CareerArc (2021) 92% of employers use social and professional networks to recruit employees. Companies such UPS, Home Depot, Disney, Atlantic BT, and Marriott have become leading names in external recruitment via social media.

When to use external recruitment?

Well, it depends on organizational decisions and culture. Most organisations use both the internal and the external methods. However, external recruitment is best used when there is not a large pool of talent internally or when organisations need better talent than their internal team can provide.

Advantages of external recruitment

One of the advantages of external recruitment is that companies can hire the best talent. This is because the candidates they find on job boards and social media are not limited to those who are currently available and are seeking work. In other words, they have a larger pool of job candidates from which to find the best one/s.

Analysts argue that outside people bring in new ideas and skills which can be vital to creativity and innovation. They can provide their new employer with comprehensive insights from other companies or industries. Similarly, companies recruiting externally have exposure in employment market which is also good for promoting their brand identity.

Some organisations may not have internal HR expertise. For them, it is better to hire new employees through specialist recruitment agencies. Many agencies have people who are expert in designing and conducting interviews, and psychometric tests which may result in the selection of the best talent for their clients.

Companies recruiting externally can have access to candidates with current knowledge and qualifications. These candidates may have a wider range of experience as well.

External recruitment can help organisations create a diverse workforce. Creating a diverse workforce helps them promote inclusion and empowerment.

Disadvantages of external recruitment

According to Premuzic and Kirschner (2020) employees hired externally take longer to adapt and have higher rates of voluntary and involuntary exits.

One of the biggest disadvantages of external recruitment is that organisations may end up hiring someone who does not fit within their organisational culture. This is because the hiring process is based solely on the skillset of the candidate.

Another disadvantage of hiring through external method is that organisations may be at risk of not receiving the right person for the job. In other words, the selection process may not be effective enough to reveal the best candidate.

If organisations have a job that requires a certain skill set, but the candidate they hire does not have the required skill, they must then provide additional training which could be expensive.

External recruitment costs more than internal recruitment as organisations may have to pay for services provided by recruitment agencies, membership fees for job sites, and others. In addition, HR administrators will have to spend substantial time on job design, advertising, interviews, assessment centers, and associated paperwork.

Conclusion

To sum-up, external recruitment methods include job boards, social media, referral networks, and recruitment agencies. These recruitment methods allow employers to find the best talent for their job openings. However, these outside sources also pose some risks, including losing control of the hiring process and not hiring the right person for the job.

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Last update: 08 April 2022

References:

CareerArc (2021) Get access to the complete findings of CareerArc’s
2021 Future of Recruiting Study, available at: https://social.careerarc.com/2021-future-of-recruiting-study/ (accessed 06 April 2022)

CIPD (2021) Recruitment: an introduction, available at: https://www.cipd.co.uk/knowledge/fundamentals/people/recruitment/factsheet#7038 (accessed 05 April 2022)

Kreznar, C. (2021) America’s Best Professional Recruiting Firms, available at: https://www.forbes.com/best-professional-recruiting-firms/#1a406ecd20b2 (accessed 07 April 2022)

Premuzic, T. and Kirschner, J (2020) eHow the best managers identify and develop talent, available at: https://hbr.org/2020/01/how-the-best-managers-identify-and-develop-talent? (accessed 04 April 2022)

Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.

Advantages Of External Recruitment

Main benefits or advantages of external recruitment method and sources can be expressed as follows:

1. Highly Qualified Candidates

External recruitment increases the chance of finding highly skilled, experienced and qualified personnel because of the large pool of applicants.

It provides wider choice to find a suitable staff because of the large number of candidates. A company can select most talented and capable candidate for its vacant position.

3. Arrival Of Fresh Talent

External recruitment encourages to bring fresh talents with new skills and creative ideas for better performance of the job.

It hires the people of different race, religion, gender, age etc on the basis of their skills and capabilities. So, it helps to improve diversity requirements.

6. Less Training And Development Cost

Recruiting from outside minimizes the training and development costs because it hires well trained and experienced candidates according to the requirement of the job.

Disadvantages Of External Recruitment

Major drawbacks or disadvantages of external recruitment method and sources can be highlighted as follows:

External recruitment is a costly process of hiring employees. A lot of money is required for vacancy announcement (advertisement), shortlisting, conducting interview and for final selection.

It is time consuming and lengthy process to recruit staff from outside the company. Various steps such as advertising, applications processing, shortlisting, interview, and selection should be performed to complete external recruitment.

It may decrease the morale of current employees because of highly qualified new candidates which leads to decrease in performance, productivity and quality.

It requires longer adjustment period for new candidates. They may have to face several challenges to adopt themselves in the new environment.

External recruitment is riskier than recruiting from inside the organization because of little information and unknown nature of fresh candidate.