I. Internal Sources

Internal recruitment consists of two main resources that are transfers and promotions. 

• Transfers: Transfer refers to the moving of an employee from one job to another, one department to another, or from one shift to another without any significant change in a person’s responsibility, status, or pay. In some cases, it may bring about some changes in responsibilities, or working conditions, but it cannot result in a change in the salary of the employee. Transfer can help fill vacancies with employees from departments that are over-staffed. It is the horizontal movement of employees. If employees are insufficient in one branch or department, it can be filled through transfer. It is also important in avoiding termination and helping solve the employee’s problems. During the transfer, it should be kept in mind that the employee who is transferred to another job is capable of performing it. Transfer also helps the employees learn about different jobs as well.
• Promotions: In most business organizations, there is a practice of promoting the employees from a lower level to a higher position. It is the movement of employees from a lower level to fill in the vacancy of a higher authority. Promotions influence the employees greatly as a promotion at one level leads to a chain of promotions in the levels lower than it.

Merits of Internal Sources

Internal recruitment or filling vacancies within the organization have the following advantages.

1. Higher Motivation level: Internal recruitment may help the employees to boost their performance. Promotions at a higher level lead to a chain of promotions at the lower levels. This also increases their status and pay, and motivates the employees to improve their performance. This increases their motivation and commitment to the organization. The employees, thus remain loyal and satisfied with the organization.
2. Simple Process: Internal recruitment makes the process of selection and placement simple. The working of the employees can be evaluated in a better way. This type of recruitment is better as the employees know about the organization well.
3. Develops future managers: Transfer is a method through which employees are trained for higher jobs. The people who are transferred within the organization do not need induction or orientation training.
4. No over or under staffing: Another benefit of transfers is that the organization can shift employees from one department to another where there is a shortage.
5. Economical: The process of internal recruitment is cheaper in comparison with external sources.

Demerits of Internal Sources

The limitations of internal sources are as follows:

1. Lack of fresh talent: The internal sources reduce the opportunity of getting fresh talents. Therefore, being completely dependent on internal sources can give rise to the danger of inbreeding by not letting new people join the organization.
2. Decrease in enthusiasm level: The employees tend to become lazy because they know that they will be promoted.
3. Low productivity: The productivity of the organization may get hampered due to the frequent transfer of employees.
4. Lack of competition: The employees may lose their motivation and spirit of competition as there is no competition from the outside world. 
5. Limited choice: All the organizations cannot fill in all their vacancies through internal sources of recruitment, especially new organizations.

Recruitment can be defined as the process of publicizing information about various job vacancies in the organization. It is a process of searching for prospective employees and encouraging them to apply for the job in the organization. Recruitment is a positive process because it stimulates people to apply for the job. It is an important part of staffing, and it is also an ongoing process. Its main aim is to attract a large number of qualified candidates to apply for the job. For this purpose, an organization communicates the vacant position through different sources of recruitment. This process of staffing brings together the job giver and the job seekers.