Internal Versus External Staffing in Nigeria: Cost-Benefit Implications

The internal recruitment is perceived in some quarters as the most favourite source of staffing an organization in stable and developed companies. The system needs a strong support from other HR processes in order to enhance morale and promote productivity otherwise it could yield disappointed and unproductive employees in the organization. Such HR processes include effective succession planning and consistent performance management to ensure success of the internal staffing. Though internal staffing may not bring new skills, competencies and fresh blood into the organization but it could build a strong loyalty as the employees have a chance to change their positions after a period of time and are not pressed to look for opportunities in the external labour market. The external recruitment on the other hand, brings new people to the organization. It allows the organization to define the right requirements especially where the labour market is full of potential candidates and to select candidates that best suit the organization¡¯s demands. There is no gain saying the fact that external staffing system with effective campaigning or advertisement could increase the popularity and enhance the image of the organization in the labour market, however, the system is expensive and takes a lot of energy from the HR functionaries in the course of handling job candidates in the selection process. In the light of the pros and cons of the two system of recruitment, this paper seeks to determine the cost benefit implications of internal vis-¨¤-vis external system by considering the issues involved from four perspectives: economic, socio-psychological, financial and political context. It concludes that the usage of either internal or external staffing system to fill vacant positions should be determined by availability of qualified candidates, size of the organization and the desire to maintain and promote organizational culture.