Internal V External Recruitment: Four in ten UK employers opt for external talent

As the war for talent rages on, nearly 40% of employers in the UK (39%) confess that external recruitment is their preferred hiring method.

That’s according to new research from SD Worx, the leading European HR solutions provider. To collect this research, SD Worx surveyed 16,000 businesses in sixteen countries across Europe, including the UK, France, Germany, Italy and Belgium.

The findings shed new light on the age-old HR debate about whether internal or external recruitment is the best course of action to fill urgent vacancies. Across Europe, it appears that a new consensus has emerged, with external recruitment being the frontrunner for 39% of European businesses. 

The countries most likely to look for talent beyond the company’s existing talent pool are France and Norway (48%) closely followed by Spain and Poland (46% each), then Italy, Ireland and Sweden (41% each). Meanwhile, the country most likely to turn to internal talent development as a solution is Finland (34%), and hot on its heels are the Netherlands, Denmark and Croatia (33% each).

Recent SD Worx research revealed that 46% of employers in Britain are facing a shortage of workers to get the necessary work completed. However, despite the impact of the talent drought businesses are far from flying blind without a grasp on their talent needs. SD Worx’s latest research into Europe’s preferred recruitment practices shows that over two thirds (67%) of UK based employers are aware of their needs in the long-term. The findings, coupled with the insight that European businesses are voting firmly in favour of external recruitment, now raises interesting questions about how and why internal recruitment is falling down the business wish list across Europe as a whole.

Internal mobility struggles

One-third of companies across Europe are experiencing challenges in moving their employees to other positions within the organisation. The finding suggests that a primary reason why companies are favouring external recruitment is a lack of knowledge as to how to implement a culture of social mobility. France struggles with internal mobility the most (43%), followed by Belgium, Sweden, Norway and Finland (all 39%) and finally Italy (37%). Employees are also struggling to see the appeal of internal mobility with 65% confessing to no immediate interest in taking on a new job within the same company. The findings may offer up a whole new rationale for why internal mobility isn’t jumping out at either businesses or employees as an attractive option.  

A lack of insight

Businesses still lack critical insight into the career paths employees really want to explore. Although six in ten European companies know what types of talent they need in the long term, only half have an actual overview of their employees' career goals and professional ambitions. Meanwhile, employees are also struggling to navigate their own personal career journeys within their companies. Only 43% of employees say they know what job they could advance into and how they should go about this.

Rachel Clough, UK Country Lead at SD Worx, comments: “Businesses have long mulled over whether internal or external recruitment represents the best and most cost-effective means of filling a vacancy. As with most things in life, there are pros and cons with both approaches, but one thing’s for sure, executing an internal mobility strategy can pay big returns for employees and businesses alike.

In a working world where employees expect personalised approaches and purpose at work, businesses should be mapping out how they can give employees greater control over personal career development. This has a key role to play in boosting employee engagement and strengthening your hand in a job market that’s in constant flux.

It’s an approach that requires investment in time and money from a top down level and one which necessitates the right mix of human interaction, and the modern tech tools employees crave. It won’t happen overnight but those prepared to put the work in will benefit from increased visibility into the skills and talents of their workforce. This will undoubtedly provide a real agility and a level of resilience whatever surprises the economy has in store for us.”