HRM: A Comparative Analysis of Internal and External Hiring Strategies

This report examines the contrasting approaches of internal and external hiring within Human Resource Management (HRM). Internal hiring involves promoting existing employees, boosting morale, leveraging familiarity, and simplifying training. External hiring, on the other hand, brings in fresh talent, new perspectives, and potentially lower initial costs. The report highlights the benefits of each method, such as employee motivation and trust for internal hires, and new insights for external hires. It also acknowledges the pitfalls, including limited perspectives and potential risks with unknown individuals for internal hiring, and increased costs for external hiring. The report references several academic sources to support its analysis, offering a comprehensive overview of the strategic implications of each hiring approach.

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HUMAN RESOURCE
MANAGEMENT
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Q. Promotion from within or outside hiring, benefits, and pitfalls of each approach
Internal hiring refers to the process of promoting existing employees for available
vacancies. External hiring, on the other hand, means hiring individuals from outside organisation
like colleges, institutions etc. for the concerned vacancies. The company promotes within itself
for filling vacancies because it boosts the morale of employees, the company is familiar with the
old employee, therefore, the trust factor is also there, the training process of these employees also
becomes easier in an effective way (Erickson, 2017). Other organisations, especially, bog
corporate prefer to hire fresh talent from external sources. This gives them fresh and new outlook
for their important business tasks. A fresh candidate can bring diversified mindset in an effective
way.
Approach Benefits Pitfalls
Internal Hiring 1. Internal hiring fills
employees with motivation to
work even well for the
company. The person who
gets hired feels happy to
work for a company and even
those who don't get a
promotion feel optimistic for
their future in an effective
way (Fracassi & Tate, 2012).
2. Candidates hired internally
can be trusted more
1. The thinking will remain
within the box for
organization and no fresh
outlook can be obtained
(Jacoby, 2018).
2. Relying on an unknown
individual for success and
growth can be risky.
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effectively.
External Hiring 1. New recruit brings fresh
talent and outlook for the
company.
2. They can even be hired at
less compensation than
existing employees.
1. The management will have to
judge the individual on the
basis of a resume. Some stale
fish may get hired.
2. The company will have to
incur expenses on external
hiring, thereby increasing
needs of funds (Cook &
Glass, 2014).
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REFERENCES
Books and Journals
Cook, A., & Glass, C. (2014). Women and top leadership positions: Towards an institutional
analysis. Gender, Work & Organization, 21(1), 91-103.
Erickson, B. H. (2017). Good networks and good jobs: The value of social capital to employers
and employees. In Social capital (pp. 127-158). Routledge.
Fracassi, C., & Tate, G. (2012). External networking and internal firm governance. the Journal
of Finance, 67(1), 153-194.
Jacoby, S. M. (2018). The embedded corporation: Corporate governance and employment
relations in Japan and the United States. Princeton University Press.
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