Recruitment, especially for management or executive positions, is one of the most important parts of human resource management. Hiring the right staff is a crucial business decision.
Recruitment can be internal or external, open or closed. Internal recruitment means hiring exclusively from within a company. This has the advantage of costing far less and a guarantee of hiring someone who is familiar with company culture. It can also boost employee morale and loyalty by showing that there is a path for internal promotion or career development. On the down side, it obviously generates a far smaller applicant pool than external recruitment and can lead to an inbred corporate culture.
In open recruitment, the information concerning an opening is made widely accessible (either internally or externally) and anyone who feels qualified can apply. In closed recruitment, a job opening is not announced and application is only by invitation. While closed recruitment is sometimes used for sensitive executive recruitment situations, where, for example, a board might not wish to make public their plans to defenestrate a CEO, it has several disadvantages. It can perpetuate an old boys' network, excluding women, minorities, and people of diverse backgrounds, and it can make employees suspect that promotions are not an open and transparent process but instead secretive and based on cronyism. While closed internal recruitment can facilitate an orderly succession in a case where an executive has been grooming a successor, it does not always result in as good a hire as might result from a more open process and wider applicant pool.