Internal and External Sources of Recruitment - Merits Demerits

Sources of Recruitment

The different sources of recruitment are classified into two categories, viz.,

1. Internal : sources of recruitment are from within the organisation.
2. External : sources of recruitment are from outside the organisation.

Internal Sources of Recruitment

The internal sources of recruitment are:-

1. Promotions : Promotion means to give a higher position, status, salary and responsibility to the employee. So, the vacancy can be filled by promoting a suitable candidate from the same organisation.
2. Transfers : Transfer means a change in the place of employment without any change in the position, status, salary and responsibility of the employee. So, the vacancy can be filled by transferring a suitable candidate from the same organisation.
3. Internal Advertisements : Here, the vacancy is advertised within the organisation. The existing employees are asked to apply for the vacancy. So, recruitment is done from within the organisation.
4. Retired Managers : Sometimes, retired managers may be recalled for a short period. This is done when the organisation cannot find a suitable candidate.
5. Recall from Long Leave : The organisation may recall a manager who has gone on a long leave. This is done when the organisation faces a problem which can only be solved by that particular manager. After he solves the problem, his leave is extended.

Merits of Internal Sources

The benefits / advantages / merits of using internal sources of recruitment:-

1. It is time saving, economical, simple and reliable.
2. There is no need of induction training because the candidate already knows everything about the organisation, the work, the employee, the rules and regulations, etc.
3. It motivates the employees of work hard in order to get higher jobs in the same organisation.
4. It increases the morale of the employees and it improves the relations in the organisation.
5. It reduce executive turnover.
6. It develops loyalty and a sense of responsibility.

Demerits of Internal Sources

The limitations / demerits of using internal sources of recruitment:-

1. It prevents new blood from entering the organisation. New blood brings innovative ideas, fresh thinking and dynamism into the organisation.
2. It has limited scope because it is not possible to fill up all types of vacancies from within the organisation.
3. The position of the person who is promoted or transferred will be vacant.
4. There may be bias or partiality in promoting or transferring persons from within the organisation.
5. Those who are not promoted will be unhappy.
6. The right person may be promoted or transferred only if proper confidential reports of all employees are maintained. This involves a lot of time, money and energy.

External Sources of Recruitment

The external sources of recruitment are:-

1. Management Consultants : Management consultants are used for selecting higher-level staff. They act as a representative of the employer. They make all the necessary arrangements for recruitment and selection. In return for their services, they take a service charge or commission.
2. Public Advertisements : The Personnel department of a company advertises the vacancy in newspapers, the internet, etc. This advertisement gives information about the company, the job and the required qualities of the candidate. It invites applications from suitable candidates. This source is the most popular source of recruitment. This is because it gives a very wide choice. However, it is very costly and time consuming.
3. Campus Recruitment : The organisation conducts interviews in the campuses of Management institutes and Engineering Colleges. Final year students, who're soon to get graduate, are interviewed. Suitable candidates are selected by the organisation based on their academic record, communication skills, intelligence, etc. This source is used for recruiting qualified, trained but inexperienced candidates.
4. Recommendations : The organisation may also recruit candidates based on the recommendations received from existing managers or from sister companies.
5. Deputation Personnel : The organisation may also recruit candidates who are sent on deputation by the Government or Financial institutions or by holding or subsidiary companies.

Advantages of External Sources

The benefits / merits / advantages of using external sources of recruitment:-

1. It encourages young blood with new ideas to enter the organisation.
2. It offers wide scope for selection. This is because a large number of suitable candidates will come for the selection process.
3. There are less chances of bias or partiality.
4. Here there is no need to maintain confidential records.

Limitations of External Sources

The demerits / limitations of using external sources of recruitment:-

1. It is very costly. This is because advertisements, test, medical examination etc., has to be conducted.
2. It is very time consuming. This is because the selection process is very lengthy.
3. It may not develop loyalty among the existing managers.
4. The existing managers may leave the organisation if outsiders are given higher post.