In this article I’ll talk about the various methods that companies use to find new hires from outside their organization. In my last post I talked about how important it is for companies to do both internal and external recruiting, because they’re two complementary halves of a complete talent strategy.
The balance between internal and external hiring varies by industry, labor market, company size, and how a source is classified. Percentages from different surveys should not be combined without the original geography, year, sample, and definition. The practical question is which source produces qualified, fairly assessed hires for a specific role.
What external recruiting is and the main methods
There are many reasons why companies should consider using external sources for some or all of their hiring needs. Some situations are simply unsuited for internal recruitment; specialized expertise isn’t available internally, fresh perspectives are needed to overcome operational blindness, there aren’t any suitable internal candidates, the company is growing and needs new capacity, innovations must come from outside, etc. And even in cases where internal hiring would be appropriate, some organizations try internal first, and only open up to external sources if no suitable candidate can be found. In fact, external recruiting is essential for long-term succession planning.
External recruiting involves using one of a variety of different sources to find people who are currently employed elsewhere. These sources can be divided into two categories: passive sources (where candidates approach the organization), and active sources (where the organization proactively approaches candidates).
The five most common types of external recruiting sources are advertising, employee referrals, job fairs, search firms, and social media. Advertising is the most traditional form of external recruiting, and consists of placing advertisements in newspapers, online, on TV, radio, etc. Social media is relatively newer, but is becoming more popular, and involves posting openings and reaching out to potential candidates on platforms like LinkedIn, Twitter, and Facebook. Online job boards are one of the most popular types of external recruiting source, and consist of job portals and websites that are frequented by job seekers looking for employment opportunities. Other methods include recruitment marketing, campus recruitment, walk-ins, e-recruiting, ATS, previous applicants, etc. Job portals and websites, print media, recruitment agencies, and networking are also common external recruiting sources.
Passive methods involve candidates coming to the organization rather than the organization approaching them. Active methods involve the organization proactively reaching out to potential candidates. Active methods can reach specialized or passive candidates, but they are not automatically higher quality and may cost more per prospect.
Advantages, disadvantages, and how to choose a source
One core advantage of using external recruiting sources is that you get access to new ideas and fresh perspectives. People who work inside an organization tend to develop blind spots regarding the way things operate, so having someone from outside can help you see problems that you weren’t aware of. In addition, external candidates often have skills that aren’t present in your current workforce, and thus require less development investment than internal hires. An external candidate who already has the training required for a given position avoids the extra expense of developing that skill set internally. External recruiting also expands your talent pool beyond just the people who work for you now. This can be useful when you’re trying to stretch a tight budget.
However, external recruiting comes with several key disadvantages and risks compared to internal hiring. The cost of hiring externally is generally higher than the cost of hiring internally, which means that external recruiting is less cost-effective than internal recruiting. Internal politics can also be a problem, since current employees may resent being passed over for promotion in favor of external hires, creating tension within the organization. One of the most common mistakes made in external recruiting is failing to define the job profile clearly. Internal recruiting is generally more cost-effective than external recruiting, because it forgoes many of the expenses associated with external hiring.
When choosing among external recruiting sources, organizations should consider the nature of the job position and the number of candidates needed. The choice of source depends on these factors. A well-defined job profile is crucial for effective external recruiting, as it helps ensure that the right candidates are attracted to the organization. A clear job profile should distinguish job-related qualifications and experience, demonstrable skills, working conditions, and nice-to-have versus must-have criteria. Replace vague “cultural fit” judgments with defined, job-related behaviors and contributions. Failing to define the job profile clearly is one of the most common mistakes made in external recruiting.