Internal recruitment, or external recruitment. Should you focus on internal recruitment, and promoting the people within your business? Or is it better to hire externally and focus your efforts on bringing new people to the business?

As with much of digital marketing and running an agency, there’s no strict right or wrong path. But internal and external recruitment have significant advantages and disadvantages that can significantly impact your business. Which one is best, will depend on your specific circumstances.

But before we get any further, let’s quickly explain exactly what we mean by “Internal Recruitment” and “External Recruitment”.

What is Internal Recruitment?

Internal recruitment is where your business will fill a vacancy with someone who already works for you. This is also known as “hiring internally”.

This can be a promotion of someone within a team: For example, internally recruiting an SEO Director by promoting an SEO Manager. Or it can be moving someone from a different team to a new area. For example, someone from the Copywriting team moving into the SEO team.

What is External Recruitment?

Meanwhile, external recruitment is where you fill a vacancy by going through the recruitment process of attracting someone from outside of your business. 

This can be done organically through your own businesses recruitment efforts, advertising a role and interviewing candidates who apply. Or you can work with a recruitment agency like us here at Herd Digital, who will go to market and find the best available candidates for you.

10 Advantages and Disadvantages of Internal Recruitment

Internal recruitment is incredibly important for your business continued growth and most importantly, for employee retention. But there are some advantages and disadvantages of internal recruitment to consider before you decide whether to advertise a vacancy externally or hire from within.

5 Advantages of Internal Recruitment

There are some big advantages to internal recruitment, that make it absolutely worthwhile and necessary for your digital agency:

1. Quicker time to hire and onboarding

Internal recruitment can offer a much quicker and seamless recruitment experience. Hiring someone from within time can save time on advertising the role, sorting through applicants CVs, and scheduling interviews as people in your agency are much more available.

Similarly, the onboarding process is much quicker, as a lot of the paperwork and formalities are already taken care of. While they will still be potentially joining a brand new team, they may already have pre-existing relationships that help with onboarding.

Of course you still need a formal onboarding process, to ensure that the internal hire is achieving in their role and feels comfortable. 

And there is no guarantee that advertising a role internally means someone is immediately interested. They may take a while to decide to apply, or not be immediately available due to workloads or projects.

2. Transferable skills and well-rounded employees

When you recruit internally, you know that the employee will likely have the skills you need, and if not, they will be familiar with the systems and processes you use.

If they’re an SEO staying within the SEO team, the new role may be a big change but they will have the skills you already need, even if at a lower level.

But if they are joining a new team, say a PPC Manager joining the Programmatic team, you aren’t losing those PPC skills and experience. Because they will help that employee become a better Programmatic Manager and a well-rounded employee.

3. Saves effort, money, and resources

Because internal recruitment is quicker, it also saves you effort, money and resources in other areas. Because you already have a massive level of insight into their skills and personality, you can skip parts of the interview process.

Additionally, by recruiting internally you can avoid paying potentially expensive advertising and recruitment fees. And hiring can be expensive, with the below offering an idea of how much a new hire costs.

But hiring internally can help to significantly reduce (but not eliminate) these costs. And additionally, you also save the time of senior level managers and leaders within the business.

4. It’s essential for employee retention 

Perhaps the biggest advantage of internal recruitment is the huge positive impact it has on employee retention. 

If your employees see opportunities for progression they will work harder, want to learn and develop their own skills and move forward in their career. 

But if your business doesn’t offer any progression opportunities, your employees are still going to look for the above: They’re just going to look somewhere else.

5. You know they will be a cultural fit

While you can use the interview process to try and judge, you can never be certain that someone you hire will be a cultural fit for the business.  It’s always a risk that someone won’t work out or be an effective member of the team.

But when you recruit internally, you will have a much better idea of whether this employee will be a good fit for their new team. You can also speak to their manager to gain further insight.

And given just how important it is for someone to be a cultural fit for the business and for your team, making sure they have the right attitude and the same drivers is essential.

5 Disadvantages of Internal Recruitment 

While those are the big advantages of internal recruitment, it’s well worth considering the disadvantages. Because they can be significant…

1. Employees can be upset about being looked over for promotion

Internal recruitment can cause contention and resentment among employees when 2 or more people apply for the same position.

Obviously you can only choose one employee, and that resentment can lead to difficulties in the workplace and the aggrieved party to look for a new position elsewhere.

2. It doesn’t stop you needing to hire

Unfortunately, internal recruitment doesn’t actually necessarily “solve” your hiring needs: It merely moves them.

Because if you do move an employee to a new team or promote them, you still have a vacancy in your business that you still need to fill. 

This is unless you decide to not fill the new vacancy you now have, for any reason. For example, if you’re promoting an SEO Executive to a Manager level then you may not have the need to backfill the SEO Executive position until you bring on some new SEO clients.

3. Reduces the pool of total applicants

Obviously when you hire internally, you have a much smaller pool of potential applicants to work with. Depending on the size of your business, it may not even be feasible to recruit internally repeatedly. Or even at all.

To ensure you are hiring the best person for the job it can be a much better idea to source your new employee via external recruitment.

To circumvent this, many businesses opt to use both external and internal recruitment. Posting an advert online on a free job board, on their own website, and promoting it internally: To see if this can solve their hiring needs before taking more proactive measures.

4. Your agency’s development may suffer from too much internal recruitment

One of the advantages of external recruitment is getting new ideas and fresh faces into the business: Which can result in your business stagnating, with no new skills, perspectives or experience coming in.

Additionally, external recruitment helps your company culture to grow and evolve. And a business that never changes would become a boring place to work for most employees.

With how fast digital marketing changes, it can be essential to hire new employees to bring in new and emerging skills to your business.

5. A lack of new skill sets coming into the business – Skills Gap

As we’ve touched on, skills and technology in digital marketing are constantly evolving. And external recruitment can be essential to bring in expertise on new technology, platforms or areas of digital marketing.

Too much internal recruitment can create problems for your business such as:

• The agency lacking the necessary skills to grow into new areas.
• A need for more substantial focus on training and development of your current employees.
• Internal recruitment of an employee who doesn’t have 100% of the necessary skills for a role.
• Too many employees with a crucial skill set or experience leaving a team.

10 Advantages and Disadvantages of External Recruitment

But that’s enough about internal recruitment. Let’s have a look at some of the advantages and disadvantages of external recruitment that you need to consider for your digital agency.

5 Advantages of External Recruitment

External recruitment is imperative for your agency’s growth, that’s nobody’s surprise. But what may be a surprise, are the reasons it can be essential to recruit externally instead of internally. 

1. Bring in fresh ideas, perspectives, and skill sets

Essential for your digital agency to grow into new areas, offer new services, and stay ahead of any technological developments is bringing in new employees with new skill sets and fresh ideas. 

While you can train employees on new technologies and developing best practices, if your agency is beginning to offer new services such as starting a Programmatic Display team, then you’re going to need to hire a Programmatic expert.

Additionally, new hires help to keep the workplace evolving, and keep your team engaged with their work and the business. And in an industry as fast moving as digital marketing, it can be a necessity to recruit externally to bring in new skills to the business.

2. A much larger talent pool with more varied skill sets

One of the most obvious benefits of external recruitment is having access to a much larger pool of potential candidates. 

When you have more choice you can hire a person who is a better match for the requirements of the role, and you can even find someone quicker.

However, if your agency requires a very unique or specialist skill set, or has its own internal software or technology, then you are obviously less likely to find digital marketers with the exact skills you need outside of your agency.

3. Grow the business into new areas and reduce the need to outsource work

With how fast developments happen within digital marketing, it can be a necessity to recruit externally for new skill sets: Especially if you’re looking to grow your agency into new areas.

For example, if you’re an SEO focused agency then you likely don’t offer much in the way of PPC services. So when a client asks for PPC services, you outsource the work to another agency.

If more and more clients ask for this, it eventually becomes the correct financial and business decision to hire some PPC professionals and build a PPC department. Not something you could hire internally for.

4. Ensures you make an impartial decision that’s best for the business

Hiring externally helps your team make the best hiring decision for the business, by reducing any internal biases or favouritism. 

Personal or work relationships can negatively influence the hiring process in favour of one internal candidate, despite a hiring manager or manager’s best efforts to remain impartial.

With external recruitment, you reduce the opportunities for personal bias to affect the hiring decision, making sure you hire the best person for the job.

5. External recruitment fulfils the hiring need

And lastly, external recruitment actually fulfils your hiring needs and fills the vacancy within your agency without creating a new one. Your hiring needs are solved, and you can concentrate on supporting your new employee with onboarding and helping them to become an effective member of the team.

With internal recruitment however, you now have to hire someone for a different position. Additionally, you still need to onboard your internal hire, and any potential future hire, doubling your work and the time you spend on recruitment.

5 Disadvantages of External Recruitment 

Of course this doesn’t mean external recruitment is without its disadvantages: Some of which can have a significant impact on your business if not considered and mitigated.

1. The recruitment costs

Internal recruitment costs the time and resources of senior members of the team, and again in the onboarding process. But generally, that’s all it costs.

External recruitment however, does cost money. You may have to pay for job boards to place your job advert online, or pay a recruiter to fill the role for you.

And external recruitment does generally take more time than internal, meaning a bigger drain on resources for a longer period of time.

2. Cultural integration

Hiring someone who is a good fit for your company culture is essential for your digital agency. And with external recruitment, there’s always the risk that someone may not be a great fit for your company culture: Despite how they look on paper or even in the interview.

And if you do hire someone who isn’t a cultural fit and have to let them go, you’ll be back at square one, with more time and money spent.

3. Uncertainty around performance

Similarly, despite your best efforts in the interview and recruitment process, you can never be certain that someone will perform at the level you need them to.

Compared to internal recruitment, where you can speak directly with managers to get a better idea of if someone has the skills or experience to achieve in their new position.

4. Can demotivate existing employees

External recruitment, when not properly considered, can have a negative impact on your existing employees.

If you have existing employees who felt that they were overlooked for a position they could have filled, it can lead to resentment, demotivate them to work hard, and look elsewhere for progression opportunities.

5. Longer hiring and onboarding process

Hiring externally generally, but not always, takes longer than hiring internally. The process of finding and interviewing applicants takes longer, and any new employees have a notice period they will have to work after accepting your job offer.

Additionally, the onboarding process for a new employee is more complicated and longer lasting, than if you were simply hiring internally. 

With an internal hire, you need to spend less time and resources on helping the new hire acclimate to their team and the business as a whole. You do however, still have to make sure they are settling into their role and performing at the required level.

So, Internal Recruitment or External Recruitment: Which is Best for Your Digital Agency?

So, when it comes to internal vs external recruitment, both are essential to attracting and retaining talent, and growing your digital.

External recruitment is best for growing your digital agency. Without it, you won’t bring in new skills, experience, and your team may become bored over time without anyone new joining.

Meanwhile, internal recruitment is essential for retaining the existing talent that you do have. Without the opportunity to progress or explore new areas of digital marketing that interest them, your employees will start to look for new opportunities. 

And internal recruitment can also contradictorily help with external recruitment: Because potential employees are more likely to join a business when you can demonstrate how it supports the professional progression of its employees.

However as we discussed, internal recruitment doesn’t actually solve your need to hire. You will still need to replace the person you are now promoting or moving to another team. This means you will still have to recruit externally to fill an employment gap in your business.

And when you do decide to recruit externally, it can help to have a recruitment partner supporting your own recruitment efforts: Like us here at Herd Digital. If you’re hiring for your digital agency, have a look at how we can support you here.