What are the Demerits of Internal Sources of Recruitment?

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There are certain demerits of internal sources of recruitment. It can hinder organizational growth. This recruitment process limits the pool of potential candidates. It results in a lack of fresh ideas within the company.

It creates a sense of favoritism and bias. Certain employees may be given preference over others. This can impact employee morale and team dynamics. Internal sources can limit diversity within the workforce. There is a lack of new skill sets and expertise.

Through this blog, readers will learn about the concept of internal recruitment. Readers will understand the aspects, advantages, and drawbacks of the types of recruitment. Continue reading to know more.

In the competitive world of business, finding the right employees is crucial. Organizations turn to internal sources of recruitment for filling positions. In this article, we will delve into the demerits of internal sources of recruitment. Let’s shed light on the limitations of internal candidates.

Internal sources of recruitment are the practice of filling job vacancies with existing employees. This method offers certain benefits. But, potential downsides can arise.

Internal recruitment lacks fresh perspectives and new ideas. They miss out on bringing individuals with diverse backgrounds. This decreases innovation. Internal candidates lack the knowledge or skills required for certain positions. This can prevent the organization from using a broader talent pool.

This blog covers:

  • Meaning of Applicant tracking system
  • Demerits of Internal Recruitment
  • Advantages of External Sources of Recruitment
  • Drawbacks of External Recruitment

What is an Applicant Tracking System?

It is a software tool for streamlining the hiring processes. It helps manage job postings. It also helps collect and track applicant data.  It helps in communication between recruiters and candidates.

Here are some features of a tracking system:

  • Job Posting: It allows recruiters to create job postings on various platforms. It simplifies the process of advertising job openings. Recruiters can reach a wider pool of candidates.
  • Resume Parsing: ATS uses a parsing feature to extract relevant information. It brings out contact details, work experience, and education. It stores them in a structured format for review.
  • Candidate Database: The system stores applicant data in a database. It is convenient for recruiters to search candidate profiles. Recruiters can view candidate information. It can be used to avoid the demerits of internal sources of recruitment.
  • Screening and Filtering: The system helps recruiters screen and filter applicants.  This saves time by narrowing down the candidates.
  • Interview Scheduling: It simplifies the process of scheduling interviews. It provides automated tools. Recruiters can send interview invitations and receive confirmations.
  • Communication Management: The ATS allows recruiters to communicate with candidates. They can send emails regarding their application status. This gives a better candidate experience.
  • Collaboration and Feedback: Recruiters can share candidate profiles. They can leave comments, and provide feedback. It helps in better decision-making. The system reduces the chances of overlooking candidates.

What are the Different Demerits of Internal Sources of Recruitment?

Internal sources of recruitment are the process of filling job vacancies within an organization. It chooses current employees for promotion or transfer. Internal recruitment has its advantages.

Here are some of the demerits of internal sources of recruitment:

  • Limited pool of talent: Internal recruitment restricts the organization. It cannot access a diverse pool of talent. The organization misses out on fresh ideas. This can lead to a lack of innovation in the organization.
  • Limited scope for growth: This process can limit opportunities for professional growth. It can lead to demotivation among employees. They see lesser chances for career advancement.
  • Office politics and favoritism: Managers may have personal biases. They could have preferences towards certain employees. This can lead to unfair choices in the selection process.
  • Inbreeding of ideas:  One of the demerits of internal sources of recruitment is a lack of diversity of thought. Different ideas and fresh approaches may be overlooked. This reduces the chances of organizational growth. The company can become outdated.
  • Skills gaps and stagnation: Existing employees lack the necessary skills for job positions. This can result in choosing the wrong employees. They cannot handle the responsibilities of the new role.
  • Reduced adaptability: Such organizations can’t accept changing market conditions. External candidates bring fresh industry knowledge. It helps the organization stay competitive in a dynamic business environment.
  • Lack of diversity and inclusion: Organizations may struggle to achieve a diverse workforce. The organization is unable to reflect different backgrounds. They don’t have new perspectives and experiences.

Internal sources of recruitment offer advantages such as reduced hiring costs and improved employee morale. But there are certain demerits of internal sources of recruitment. Organizations must adopt a balanced approach.

What are the Advantages of External Recruitment?

External recruitment refers to the process of hiring candidates from outside an organization. There are a number of advantages and disadvantages of External Recruitment. Such hiring can contribute to the success and growth of a company.

Here are some of the benefits:

  • Fresh Perspectives and Diversity: This type of hiring brings in new talent. They have diverse backgrounds. These individuals can offer fresh ideas and different approaches to problem-solving.
  • Access to a Wider Talent Pool: It allows them to reach a broader range of qualified individuals. They have the special skills required for the job. Accessing a wider talent pool increases the chances of finding the most suitable candidate management system for the position.
  • Infusion of Specialized Skills: External recruitment helps organizations bring in individuals with new skills. This may not be available internally. Hiring externally helps meet skill requirements better. It helps curb the demerits of internal sources of recruitment.
  • Enhanced Competition and Performance: It helps existing employees perform their best. New hires bring a high level of motivation to excel in their new roles. External recruits bring their networks and relationships which can benefit the organization with new business.

External recruitment of candidates can bring in the best possible talent. It helps avoid the demerits of internal sources of recruitment.

What are the Drawbacks of External Recruitment?

External recruitment sources candidates from outside the organization. This recruitment can bring new skills to an organization. But, it has several drawbacks.

Here are some of the drawbacks:

  • Limited familiarity: External recruits lack knowledge about the organization. It takes time for them to adapt. They can take time in becoming productive members of the team.
  • Costly process: External recruitment can be expensive. Organizations spend money on advertising job openings. They also give training to new hires.
  • Higher risk of turnover: External hires leave the organization within a short period. This process can lead to increased turnover costs. This also comes under the demerits of internal sources of recruitment.
  • Longer adjustment period: New hires require more time to adjust to the organization. They may need additional training and guidance. It takes time to understand the company’s policies.
  • Impact on employee morale: Existing employees can have decreased morale. It could reduce job satisfaction. They even dislike new hires.
  • Skill gaps: External recruits may not have the exact skills required for the job. Such candidates can require training sessions.
  • Time-consuming process: External recruitment takes longer. This can result in delays in filling vacant positions. It can affect the organization’s growth.


Internal sources of recruitment have their disadvantages. Companies miss out on fresh perspectives and different skill sets. This recruitment may create a sense of favoritism among employees. Some individuals perceive the process as unfair. It can impact morale and employee satisfaction.

The demerits of internal sources of recruitment limit the organization’s ability to adapt. Organizations must strike a balance. They should consider external sources as well. This helps create diversity and maintain a competitive edge.

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