Difference Between Internal and External Recruitment (With Table)

Internal and external recruitment are two ways to recruit employees in an organization. Internal recruitment is the process of hiring people from within the organization. The management is already aware of their skills, and they have been working with them. In simple words, they are choosing from the present employees.

External recruitment is the method of recruiting employees from external sources. This can be done through advertisements, agencies, etc. This method is used when the organization feels that the existing employees are not capable, and there is a need for fresh talent.

External recruitment is a more costly process. It is also time-consuming process than internal recruitment. Both of these types of recruitment have their own merits and demerits.

Internal vs External Recruitment

The main difference between internal recruitment and external recruitment is that internal recruitment uses present employees. In contrast, external recruitment creates a pool of candidates from external sources. These employees do not have relationships with the organization.


Comparison Table Between Internal and External Recruitment (in Tabular Form)

Parameter of Comparison

Internal recruitment

External recruitment


This type of recruitment is focused on employing people who are already in the organization.

This type of recruitment is focused on employing people who are outside the organization.


It is not as time-consuming as external recruitment.

It is a time-consuming process.


It is an economical process.

It is more costly than internal recruitment.

Number of candidates

This type of recruitment provides a limited choice between candidates.

This type of recruitment provides an unlimited choice between the candidates.


It is based on merit or seniority.

It is based on merit or qualification.


Promotion, transfers, references, etc. are sources of internal recruitment.

Employment agencies, casual callers, advertisements, etc. are the sources of external recruitment.


What is Internal Recruitment?

Internal recruitment is a type of recruitment where the employees are recruited from within the organization. This is an economical method of recruitment and can also be done quickly. This type of recruitment provides a pool of reliable candidates because these employees have already been working with the organization. Their skills and strengthens are already known to the organization.

There are various ways to recruit employees internally. For example, transfers, promotions, former employee re-employment, internal advertisements, etc.

A transfer is a horizontal method of internal recruitment, whereas promotion is a vertical method of internal recruitment. A transfer is shifting an employee from a department to another where there might be a requirement. This is also a part of the job-enrichment and job-rotation process.

Promotion is the process in which an existing employee is given a higher position, authority, or incentive. This type of recruitment is based on merit and seniority. 

There are many advantages of internal recruitment. It fosters trust, loyalty, and helps the organization to maintain secrecy. There are negligible costs incurred on training and orientation in this type of recruitment, and the employees are also reliable.  No advertisement costs are incurred either.

The drawbacks of this are that it only provides a limited pool of candidates. It can cause the employees to be lethargic and also decreases innovation in the organization.

It can also cause not selected employees to feel disappointed and become indifferent towards work. It also creates another vacancy to be filled.


What is External Recruitment?

The external method of recruitment is one where the pool of candidates is created from outside the organization. These candidates do not have any relations with the organization presently.

It is a costly method as there are advertisement costs and the new employees need training and orientation. This type of recruitment is also time-consuming as the recruiter has to go through the profiles of all the candidates and then create a pool of the potential ones. Then interviews and tests are conducted to assess the suitability of those potential candidates.

This is followed by a long process of training and orientation.

There are various sources of external recruitment. For example, advertisements, campus recruitments, waiting lists, employment exchanges, job portals, recommendations and references, job fairs and seminars, job consultancies and agencies, etc. Ads are the most common way of external recruitment. Job vacancies are circulated through ads in magazines, newspapers, websites, etc.

Campus recruitment is also a prevalent method of this type of recruitment. This is because every year, companies select graduating students from the universities and colleges in placements.

The external method of recruitment brings in fresh talent in the organization and, thus, bring along innovation and opportunity to improve. It also gives the management a large pool of candidates to narrow their potential candidates. In simple words, it provides management with a lot of choices. But there are many disadvantages too. The process used for the selection of these potential candidates might not be effective. The decision-making process is tough and can also cause resentment among present employees.

Main Differences Between Internal and External Recruitment

  1. Internal recruitment is focused on hiring employees that presently work for the organization. On the other hand, external recruitment is the process of hiring employees from external sources.
  2. Internal recruitment is cost-effective, unlike external recruitment.
  3. Internal recruitment is quick as the pool of candidates already work with the organization. In contrast, external recruitment is time-consuming.
  4. Internal recruitment can be based on seniority, whereas external recruitment gives qualification a priority.
  5. Sources of internal recruitment are transfers, promotions, internal advertisements, etc. Sources of external recruitment are job portals, campus placements, employment exchanges, etc.



Internal and external sources of recruitment have their own merits and demerits. Where internal recruitment is focused on hiring employees that are already working with the organization, external recruitment focuses on bringing new talent to the organization from external sources.

Companies opt for an external source of recruitment even though it is expensive and time-consuming because it provides management with a lot of options to choose from. Internal recruitment, on the other hand, provides management with limited but reliable potential candidates.

The type of vacancy and the situations determine the kind of recruitment the organization opts for. If the organization wants to maintain secrecy, it might opt for internal recruitment. If it wants to bring in new ideas, it might opt for external recruitment.


  1. https://core.ac.uk/download/pdf/37882826.pdf
  2. https://www.journals.uchicago.edu/doi/abs/10.1086/667814