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This refers to the filling of job vacancies from outside the business (contrast with internal recruitment). Most
businesses engage in external recruitment fairly frequently, particularly those that are growing strongly, or that
operate in industries with high staff turnover.
 
There are several ways of looking for staff outside the business:
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These businesses specialise in recruitment and selection. They often specialise in recruitment for specific sectors
(e.g., finance, travel, secretarial). They usually provide a shortlist of candidates based on the people registered with
the agency. They also supply temporary or interim employees.
The main advantages with using an agency are the specialist skills they bring and the speed with which they
normally provide candidates. They also reduce the administrative burden of recruitment. The cost is the high agency
fees charged - often up to 30% of the first year wages of anyone employed.
 
 
   
"Upmarket" recruitment agents who provide a more specialised approach to the recruitment of key employees and/or
senior management. They tend to "approach" individuals with a good reputation rather than rely on long lists of
registered applicants - often using privileged industry contacts to draw up a short list. The cost of using a headhunter
or recruitment consultant is high.
 

Government run agency - good for identifying local candidates for relatively straightforward jobs. The job centre
service is free to employers and is most useful for advertising semi-skilled, clerical and manual jobs.

  
    
There is a variety of government funded schemes that provide potential recruits, including the New Deal and
Modern Apprenticeships. The advantage of these schemes is that government funding lowers the cost of
employment and the business can get to know the employee before committing for the long-term. However,
relatively few employment requirements are covered by these schemes.
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Probably the most common method. Advertising allows the employer to reach a wider audience. The choice of
advertising media (e.g. national newspaper, internet, specialist magazine etc) depends on the requirement for the
advert to reach a particular audience and, crucially, the advertising budget.
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These are mainly the opposite of the disadvantages of internal recruitment. The main one being that a wider
audience can be reached which increases the chance that the business will be able to recruit the skills it needs.

http://tutor2u.net/business/people/recruitment_external.asp

Internal pro: You have absolute control


internal con: You have limited time and money for complete screening
external pro: A recruiter has more prospects available and typically a very organized screening process
external con: A recruiter costs money
External recruitment
ADVANTAGES
-Outside people bring in new ideas
-Larger pool of workers from which to find the best candidate
-People have a wider range of experience

two possible benefits of external recruitment over internal recruitment of a company


1. Introduction of new ideas, approaches and views, not entrenched in company politics and issues.
2. No problem of promoting one worker over others risking friction & resentment.

Internal recruitment DISADVANTAGES

-Limits the number of potential applicants


-No new ideas can be introduced from outside the business
-May cause resentment amongst candidates not appointed
-Creates another vacancy which needs to be filled
An outsider has an overall view of other organisations and has a global concept. He acknowledges the right path for
a specific business and brings a fresh perspective. In contrast, an insider can be taken as a frog in a well.

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No matter how small your company or enterprise, the short-term as well as the long-term success of your business
will be determined by the ability for your company to stay innovative. An outside party is usually the best catalyst
for such innovation. This article will talk about the different pros and cons of external recruiting and when it is most
effective to bring an outsider into the organization.
External recruitment makes it possible to draw upon a wider range of talent, and provides the opportunity to bring
new experience and ideas in to the business.
(article continues below)
Most organizations that are looking for an injection of new ideas, new leadership and a new culture use external
recruiting methods.
Startups initially need someone who has some experience to come in and show them exactly what they need to do to
improve as a business, so this is the number one choice for most entrepreneurs looking to hire expertise.
Like all recruiting methods, this one also has its pros and cons. It is important to note however that external
recruiting is not better than internal recruiting but can be more effective based on a number of different reasons.
Let's first take a look at some of the key advantages of external recruiting.

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The injection of a new person into an already existing organization will bring a surge of new ideas and a new of
thinking. This is vital for a company that has not been experiencing recent growth and is looking for a catalyst. Most
outsiders are brought in usually from an organization that is very successful and so the ideas that they bring are
meant to bolster the company into a new era of growth. For new startups the same intention applies.

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The most obvious advantage of external recruitment is the availability of a greater pool of applicants. Thus, only
those applicants who have the exact qualifications will apply and be selected. This has consequences for the
organization's training budget. Whereas external recruits will require orientation upon being hired, they will not
require any extra training assuming they were selected for their capabilities.

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With internal promotion there is always the fear that already existing employees will not agree with some of the
promotions taking place as they know the people being promoted well and can evaluate for themselves whether or
not they are worthy of the position. In the case of external recruiting however, the injection of an outside party into
the organization is usually met with little resistance because no one feels unfairly treated.

Here are some of the disadvantages of external recruiting. This form of recruiting is more beneficial to companies
looking for change and maybe still in their inception phase. So these disadvantages will be found mostly in larger
companies that have been well-established for a number of years.

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Recruiting a professional for their expertise is usually expensive and the bargaining power is always in their favor.
Because they are meant to come in and produce results right away they usually require a high level of compensation
for their commitment to turning the company around since it will involve a lot of pressure. Promotion from within
tends to be much cheaper as there is no external equity to worry about.

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Adjusting to a new corporate culture as well as new environment, people, restaurants, etc, all play a major role in
how quickly an external party can influence an organization to change. They must first get settled into the new
environment they find themselves in and this could range from months to years depending on the nature of the work
and location of the business. This time frame is usually very unpredictable.
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Resumes are not reliable with regards to some of the more important intangible assets like leadership and
interpersonal skills. So most times HR managers do not know what they are getting until the person has been
assimilated into the company and by that time it is too late. It is much harder to get data on all these things from an
outside party and this in turn further complicates the process.

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If an organization spends a huge amount of money to bring in an external party, you better believe they are going to
milk them for every last penny they spent. As a result of this, potential for upward advancement is almost non-
existent. This has the tendency to reduce overall morale over the long haul because the present employees do not
feel they have a fair chance at getting promoted.

Chukwuma Asala is an international student from Nigeria who is studying to earn an MBA from the State
University of New York in Albany. He has analyzed more than 20 industry case studies throughout his education
thus far, and hopes to bring some of his business knowledge to
Gaebler.com.

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‡ Outside people bring in new ideas
‡ Larger pool of workers from which to find the best candidate
A‡ People have a wider range of experience
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‡ Longer process
‡ More expensive process due to
‡ advertisements and interviews required
‡ Selection process may not be effective enough to reveal the best candidate
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‡ Cheaper and quicker to recruit.
‡ People already familiar with the business and how it operates.
‡ Provides opportunities for promotion with in the business ± can be motivating.
‡ Business already knows the strengths and weaknesses of candidates.
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‡ Limits the number of potential applicants.
‡ No new ideas can be introduced from outside the business.
‡ External candidates might be better suited / qualified for the job.
‡ May cause resentment amongst candidates not appointed .
‡ Creates another vacancy which needs to be filled.
‡ Longer process.
Lifespy.com
There are many reasons why management would like to hire people internally, or from peope who are currently
employed by the company who wish to transfer into other departments and/or work on other positions.
If you are deciding on whether to hire from inside or outside the company, here are the advantages and
disadvantages of hiring internally:

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 $ This type of recruitment is faster and more cost-efficient. This is because employee records are already
available in file. All the human resources people will have to do is update the records.
Another advantage is that employees hired internally would no longer need to be oriented on the company¶s mission
and policie. Training could be focused on the skills and processes of the new job.
Internal recruitment also tells employees that the company is open to professional growth and changes. This will
then result to increased loyalty.

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 $ Enforcing mostly internal recruitment would not encourage new innovations in the company.
People who have worked long in the company, might have already developed groupthinking and this usually results
to stagnation. External hiring usually brings in fresh ³blood´ who in turn can introuduce innovations and new ideas.
This is also the same for skills. New people can also introduce new technology, techniques and methodologies
which can be advantageous to companies.
Another disadvantage is that your choices for candidates are limited. This can cause problems if no one in the
company is qualified enough for the new position.
As a company grows, expands, and experiences turnover, it becomes necessary to create new positions or fill
already-existing ones. One dilemma many hiring managers face, however, is whether to promote someone from
within the company or hire an external applicant from the outside.

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At first glance, it seems to make sense to promote someone from within to fill an open position. There are a number
of reasons for this, including:
j? Internal candidates have already proven themselves as valuable workers and assets to the organization, or
they wouldn't be considered for the position.
j? Internal candidates know the company. From the culture of the company to the products offered to other
co-workers, internal candidates are already acclimated to the company and its procedures and other
workers. Sometimes, hiring an internal candidate is ideal in specific product-oriented industries.
j? Hiring internal candidates looks good for the company. Companies who promote from within are viewed as
caring for the needs of their employees and putting their opportunities for advancement ahead of someone
from the outside.
j? Hiring internal candidates saves time and money. When hiring from within, relocation costs, advertising for
the new position, and other expenses are avoided.
j? Hiring From the Outside
While promoting from within the company seems to be the favored approach, many employers opt to hire
external candidates. The reasons for this are varied. Some of them are:
j? The internal candidates just don't measure up. If the company envisions a certain type of background or a
phenomenal talent that can't be found from within, they will turn to outside applicants to fill the role.
j? The company needs a change. In some cases, a company will be looking to drastically change the way they
do business. When this is the case, they are more apt to hire a fresh outlook on business from an external
applicant.
j? External applicants eliminate antagonism. When there are several employees vying for the same position,
there is more than likely to be resentment, hurt feelings, and anger when the incumbent is announced.
When an external applicant is hired, employees are less likely to be bitter or feel they were treated unfairly.


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Hiring from the outside or promoting from within is a difficult decision, and no one is better than the other.
Employers must gauge the circumstances, and then decide from there what would be best for the company.
Many times, if companies are hiring for a position that requires an extensive amount of knowledge about a particular
product, such as software or pharmaceuticals, they prefer to hire from within. This way, they don't have to take the
time to train the person on the products and can be confident knowing they've hired someone who is already familiar
with the product and the company.
On the other hand, if a company is undergoing a complete change in management or the company needs to
experience a turnaround, many times they will opt to hire someone from the outside. This is because executives
from other companies can bring fresh ideas and new processes into an organization, breathing new life into it. There
are many examples of companies who were struggling, and then after an overhaul of management and top
executives, experienced a turnaround for the better.
Business knowledgesource.com
There is an ongoing debate among employment managers as to whether it is better to give preference to internal
candidates before looking externally to fill vacancy. Older, more established firms traditionally give preferences to
internal candidates while fast-growing and more innovative firms tend to focus more on external hires. Although
most firms end up using a mixed strategy, the target ratio of internal to external hires is always a topic of hot debate.
First let us focus on giving preferences to outside hires. x+-."'xÑ ''Ñ.x"Ñ)x*xx x

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1.? It helps you acquire competitive intelligence about other firms.
2.? New hires can help you identify other potential candidates to ³poach´ from their firm.
3.? The new ideas that applicants and new hires bring in stimulate the thinking of others.
4.? New hires ask ³why we do things that way´ so we are often forced to re-think the way we do things.
5.? It keeps our employees on the edge because they know they must compete against outsiders for jobs.
6.? Outside hires don¶t have political alliances already set up. This can help them implement new ideas without
the ³baggage´ of past political battles.
7.? Already trained external hires may give us ³instant talent´ for new products, programs, and skills.
8.? Some argue that hiring ³already trained´ people is cheaper than developing and promoting internal talent.
This effect varies depending on the cost of a new hire.
9.? It allows other firms to train and weed out the ³turkeys´ so we can hire the cream of the crop. As a result it
can lower training cost.
10.? In a stagnant culture, ³outsiders´ might help ³shake things up´ and help us evolve our culture.
11.? When you hire a great talent from a close competitor, you gain one and as an added benefit«the
competitor also loses one.
12.? The outside recruiting and advertising for outside hires may tangentially help build your brand, send a
message that you are growing and also help boost sales.
13.? Re-hiring boomerangs (former employees) may aid in retention efforts as they tell other employees that the
³grass is not greener´ on the outside.
14.? In a fast-growing company (or small firms) you might have no choice but the higher externally because
there isn¶t enough talent to go around inside the firm.
15.? If the firm has weak training or development, the inside talent will not have sufficient skill to do the job.
16.? If the firm has a weak hiring process promoting internally, is not a realistic option because of the lack of
talent.
17.? In jobs where you absolutely require experience, there may not be enough experience in newly developing
areas.
18.? External hiring forces are managers to stay up with trends and to benchmark as they interview search. This
is the added impact of improving their learning.
19.? In most cases external hiring adds more to the diversity of the workforce than internal hiring.
20.? If the firm is going global, it will undoubtedly line that external ³local´ hires are superior and performance
to internal promotions.
21.? The World Wide Web makes recruiting so easy and inexpensive the advantage has shifted towards external
hiring.
Problems With Outside Hiring:
1.? Outside hires can weaken the corporate culture by bringing in counter culture people.
2.? The turnover rate for external hires is almost always higher than internal promotions because the candidates
must both adjust to a new environment and they come to us as relative unknowns.
3.? External hires often have a longer ³adjustment period´ and orientation costs are higher.
4.? Customers may feel slighted if they don¶t get one of the Firm¶s current employees.
5.? In a tight job the (potentially) higher starting salaries of outside hires may cause internal equity issues and
eventually increase all salaries.
6.? In a tight job market there may be little external talent available or the quality of the limited talent may be
poor.
7.? Firms with strategic alliances may anger their partners by ³poaching´ their talent.
8.? Hiring talent away from customers and suppliers may harm your business relationships.
9.? Legal issues can occur when hiring intact teams, top technical talent with non-compete agreements.
10.? In a competitive market you can¶t hire quality talent without a strong recruiting function.
11.? Learning internet recruiting and setting up web pages may be prohibitively expensive or time consuming.
12.? The world of external recruiting changes so rapidly and is so competitive that we might end up with lesser
talent unless we can afford a strong recruiting function.
13.? The likelihood of lawsuits resulting from illegal practices by hard to control managers is high.
14.? External hires have already demonstrated their lack of loyalty by leaving their firm. They may have the
same lack of loyalty at our firm, resulting and high turnover rate.
15.? In a cyclical economy, large-scale external hiring might just a mean future layoffs.
ERE Media.com
Advantages:
Employee knows the company already
Company knows employee already, know what they are getting.
Cheaper than getting external employee
Perpetuates company loyalty

Advantages of external candidate:


Fresh ideas and outlook
New energy for the company
May bring new skills to company

I will just give you disadvantages for "internal" considering that a change is needed in the position, leadership, and
employees. Just use common sense opposites for advantages.

Internal

Bad employee vibes and old habits will stay and resistance to change will remain the same. Its easy for employers to
tell new folks what to do, how, and where than old timers.

Internal employees are not qualified for the position. Sometimes internal employees may not qualify due to poor
education, attitude, leadership skills, and lack of experience.

Potential rage and backlash among employees for not being offered or promoted. Lawsuits....This can go both ways,
but if you hire external, percentage of a lawsuit for discrimination goes way down. Ms Pregnant, Handicap man, Mr
God, Lady Big, will not get that big of a rage if they see a new person from the outside.

Internal employees may demand higher wages and extra benefits. Why hire internal when you can hire someone
external who is more qualified and demand less pay?

That's all I can think of for now. Head out to About.com and see if you can find any articles that might help you.

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