A recruiter shaking hands with an employee up for internal promotion

The Advantages and Disadvantages of Internal Recruitment

6 min read | May 27, 2024
 Marta Gongos- Ad Culture By Marta Gongos

External recruitment has always been an employer’s go-to talent acquisition method, but things changed when internal recruitment rose in popularity. Sourcing talent internally presents attractive advantages, such as cost-effectiveness and higher employee engagement. But like all things, it comes with disadvantages. 

In this article, we outline the advantages and disadvantages of internal recruitment to help you decide whether or not it’s for you. Before we jump into this, let’s get a deeper understanding of internal recruitment.

The Advantages and Disadvantages of Internal Recruitment


What Is Internal Recruitment? 

The entire hiring process of internal recruitment occurs within the business. Recruiting managers find viable internal candidates to fill open positions instead of sourcing them from an external talent pool. Like external recruitment, hiring managers list job postings on internal job boards to attract interested applicants. 

Internal recruitment may occur in the following ways:

  • Transfer or Promotion – Recruiters scout internal talent from different departments and gauge their credentials if they fit the job description. Department managers can also participate in the hiring process by conducting performance reviews and recommending team members for an internal promotion.
  • Employee Referrals – Hiring managers encourage employees to refer friends, families, or associates for an open position. In return, employees receive a bonus or reward for their successful referral. 
  • Temporary to Permanent – Temporary employees or interns can experience internal promotion when employers change their status to permanent.

Advantages of Internal Recruitment 

Employers choose to promote internally because of its multiple benefits: 

Shorter Hiring Process and Onboarding Time

Processing internal recruits takes a shorter time than external recruitment, which consists of an extensive procedure—job posting and advertisement, applicant evaluation, short-listing candidates, first and final interviews, and candidate selection.

On the other hand, hiring teams already have a familiar talent pool of existing employees when promoting internally, making the process faster. This removes the need for multiple interviews and background checks since current employees fit the company culture and have accessible references.

Faster Onboarding Time

Internal hires are adept in a company’s culture, processes, and policies, shortening onboarding time. They only need a transition period for their new position, so they can familiarize themselves with their new responsibilities. 


Hiring internally is significantly cheaper than acquiring external talent. Recruiters won’t have to spend on online job advertisements, subscriptions for resume databases, and other fees to ensure successful hiring. 

Instead, hiring teams can simply send vacant positions to existing employees via email, office intranet, or communication channels where applicants can easily let the hiring manager know they’re interested. 

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Improved Employee Engagement and Loyalty

Internal promotions offer current employees new challenges and career growth opportunities—a reason why they look forward to it and become more engaged with their work. With promotion in their sights, they’re more motivated to display excellent work quality and productivity. 

Additionally, normalizing internal promotion as part of company culture boosts employee loyalty and retention

Disadvantages of Internal Recruitment 

Recruiting internally also has downsides that can affect the company negatively: 

Office Politics and Internal Conflict

Internal recruiting may cause resentment and favouritism among employees, especially in those considered but didn’t get the position. They may feel demotivated and undervalued, urging them to leave and apply for a different company. 

Related: How To Keep Employees From Quiet Quitting

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Limited Pool of Potential Candidates

Another disadvantage of internal recruitment is having a limited pool of candidates. While some positions are easily filled with qualified internal hires, some are vacant due to skill gaps and zero or unviable applicants.

Recruiting external candidates is the best solution for this issue because recruiters can scout for applicants who have exemplary skills, attributes, and experience that fit the job. External hires also offer a fresh perspective to help the employer and management grow in a different but beneficial direction.

Related: A Limited Pool of Candidates Can Create Bias; Here’s How to Overcome That

Employee Burnout

With internal recruitment comes added responsibilities and more often than not, added stress that can result in burnout. More than that, the overwhelming pressure to perform excellently expected from a promoted employee may cause them to make consequential mistakes and break down fast. 

Stagnant Culture

Internal promotion causes a stagnant culture—a major disadvantage of internal recruitment that makes employees and managers too comfortable and complacent. This must-be-avoided company culture creates an inflexible work environment that hinders the business from growing. 

When to Consider External Recruitment 

The pros and cons of internal recruitment reveal the limitations of recruiting. Experiencing any of the following pushes the need for external recruitment:

  • Experiencing a workforce gap in skills and knowledge
  • Wanting to expand the company by having a diverse work environment
  • Struggling to find a method to make the company grow
  • Looking for ways to move the company in a different direction

Let Ad Culture Help You Find Talented External Candidates 

At some point, internal recruitment may not be beneficial for the company—and that’s fine! This just means you need to take a different or external approach.

Ad Culture is a Toronto-based recruitment agency that provides a brilliant pool of candidates to employers in the marketing industry. Our expertise in this field allows us to match you with the unicorns you’ve been looking for for a long time. 

Contact us today! Let us handle talent acquisition, so you can focus on growing the business.

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