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HR GLOSSARY

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HR Glossary | What is external hiring?

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What is external hiring?

External hiring is looking outside of a company’s current employees to recruit from other sources. 


Pros and cons of external hiring

Hiring managers often overestimate the value of external hires when filling open positions. There are, of course, some benefits to hiring externally. External candidates may have more experience with certain aspects of the job, may have competencies that the organization doesn’t currently have, and can bring in new perspectives on issues a company is facing.

There are downfalls to external hiring as well, though. Hiring externally can serve to demotivate current employees who feel they do not have opportunities to grow within the company. It can also be more expensive. And, of course, there are no guarantees that the “unknown” candidate will be a cultural fit or will perform well in the position.


Alternatives to external hiring

An alternative to hiring externally, of course, would be looking within the organization to fill open positions. This, philosophically, can be done from the most senior positions down through the organization to focus on hiring external candidates only for entry-level positions. Or a company may choose to hire externally on the front lines and at the C-level.

The decision of external vs. internal hiring, though, isn’t a black and white decision. Often some combination of the two may make the most sense for a company—helping them balance an approach that both leverages external talent while growing internal talent over the long term.


Managing the external hiring process

It’s important to create and communicate a company’s approach to filling open positions. Some companies, for instance, have a policy and practice of first posting or announcing an open position internally and only going outside if no qualified internal candidates emerge. Other companies may advertise open positions both internally and externally, giving existing employees an opportunity to be considered. Companies may have a policy to err on the side of hiring internal candidates when they are qualified for the position—or to always fill the position with the most qualified candidate, whether internal or external. 

Having and communicating a policy—and following it—can help to minimize employee dissatisfaction with the process. Filling positions with internal staff, especially senior-level positions, can send a very strong signal to employees that advancement opportunities are possible. 


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About the author: Visier Team

People-centered ideas and insights by the editorial team at Visier.

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