What Is the Difference Between Hiring and Recruiting?

As your organization evolves, bringing in the right people becomes essential to sustaining momentum and reaching new goals. This often involves both hiring and recruiting, two related strategies that serve different purposes in workforce planning.

To clarify how and when to use each, here are the key differences between hiring and recruiting and best practices for both.

Hiring versus recruiting: What's the difference?

The act of hiring involves soliciting and reviewing applications for an open position. You might post an ad on LinkedIn or other job posting sites, alerting the public that you’re looking for workers with specific criteria. Essentially, hiring involves seeking and evaluating candidates when you need to fill a specific role at your company.

Recruiting, on the other hand, involves continuous research to find the best employees for your company—not just when you need to fill a position. In fact, 48% of organizations say building a talent pipeline is their top recruiting priority. It’s all about building awareness of your company among talented professionals and convincing them that your organization is the right fit for their goals and skill set.

When you find someone you think would be a good fit, whether through networking, social media, or a referral, you can reach out and talk about your company, its culture, and the type of talent you typically seek. In essence, recruiting allows you to build a list of people who already know your brand and want to work for you, so you’re never scrambling when you need to fill a job.

[Read more: 6 Recruitment Strategies to Help Your Business Stand Out]

When to hire internally vs. externally

There are benefits to both promoting an existing employee and bringing in someone new. Here’s when to take each approach.

Hire internally if:

• You are looking to fill a role on a budget. Internal hiring helps you avoid advertising expenses, recruitment fees, and the time-consuming process of onboarding someone new. Additionally, existing employees require less training, and they’re already familiar with company tools, methods, and culture.
• You want to boost employee morale and retention. Promoting from within signals that hard work and loyalty are rewarded. This can increase engagement, motivate employee growth, and reduce costly turnover.
• The role requires deep institutional knowledge. Internal candidates have an advantage for positions that rely on a solid understanding of your company's policies, culture, and internal systems. They can hit the ground running and are less likely to require a lengthy training and acclimation period.

Hire externally if:

• You are looking to fill a skills gap. External candidates bring fresh ideas, new skill sets, and different experiences that can spark innovation and strengthen your team’s capabilities. This is especially useful when entering new markets, adopting new technologies, or upscaling.
• You want to improve workplace diversity. Bringing in talent from outside your organization can enrich the company's culture, enhancing diversity of thought, background, and perspective. This can lead to stronger business outcomes and better decision-making.
• Your internal pipeline is limited. Sometimes, the right internal candidate simply doesn’t exist. Whether due to experience gaps or lack of interest, external hiring allows you to reach a broader talent pool to find the best fit.

Best hiring practices for your business

When you need to find a talented candidate quickly, here are some best practices to follow based on current hiring trends:

• Start with a strong job description. Provide a clear summary of the role, its requirements, and the environment in which they’ll be working. This not only helps attract qualified candidates, but also ensures everyone’s expectations are aligned from the start.
• Hire based on soft skills, not degrees. While you want to consider an applicant’s education, it shouldn’t be your deciding factor. Skills like communication, creativity, and adaptability are crucial additions to the workplace, but cannot be easily taught.
• Focus on your business’s reputation. Since you’re accepting applicants of any sort, you’ll want to perfect your business’s reputation so you attract a qualified pool of candidates. This means managing online reviews and addressing any negative feedback.
• Be transparent about compensation. Most employers are up front about salary, and most applicants accept jobs based on pay. As a hiring manager, aim to be as transparent as possible about compensation.

[Read more: What Is Human-Centric Hiring and How Can It Help Your Business?]

Best recruiting practices for your business

Recruiting is a never-ending process that can bring the most qualified workers to your business. Here are some top recruiting practices:

• Involve your team. Even if you outsource a recruiter, recruiting should be a collective effort. Ask for referrals or your current employees’ opinions when crafting job descriptions.
• Promote your workplace culture. Today, company culture is everything. Prospective employees aren’t just interested in monetary compensation or lots of PTO; they want to feel like they’ll serve a purpose and will fit with the rest of the team.
• Attend (or host) industry events. From professional mixers to job fairs to panel discussions, industry and networking events are a great way to build connections with both passive and active candidates.
• Tempt, tap, and retain. Not only do you want to tempt prospects with a hefty benefits package and an enticing company culture, but you’ll also want to focus on retaining them long after hiring. Invest your time in onboarding, training, and developing your new employees, and be sure to make all employees feel like they’re irreplaceable.

How recruitment software can help

Recruitment software offers small businesses a powerful way to streamline hiring, reduce time-to-fill, and compete for top talent more efficiently. These platforms can automate time-consuming tasks like resume screening, interview scheduling, and candidate communication, freeing up valuable time for business owners and HR teams. Many tools also include analytics to help improve decision-making and optimize your hiring process over time.

The right recruiting software can have an enormous impact on your business, so ensure the solution aligns with your business size and goals. Consider the user experience, scalability, integration potential, and whether it offers tools like applicant tracking or recruitment marketing.

[Read more: AI for Hiring: How to Use AI to Find the Best Employees]

Metrics to measure hiring and recruiting success

Tracking performance is essential to improving your hiring and recruiting strategy over time. Here are some key metrics to help identify what’s working and where there’s room for improvement.

• Time to hire: Measures how long it takes to move a candidate from application to offer. A shorter time can reduce costs and ensure you don’t lose top talent.
• Quality of hire: Evaluates the long-term impact of a new employee through performance reviews, retention, and productivity. This metric helps assess whether your process is attracting the right candidates.
• Source of hire: Shows which channels—job boards, referrals, and social media, for example—produce the best candidates, helping you allocate resources more effectively.
• Candidate satisfaction: Collecting feedback from applicants on the interview and hiring process, providing valuable insights and potentially enhancing your employer brand.
• Cost per hire: Tracks the total cost of hiring, from job ads to recruiter fees, and is vital for accurate budgeting.

Hiring and recruiting the right talent is crucial, and building and retaining a diverse and skilled team will help improve all business areas. With these tips and techniques, you’ll ensure your business always has a pipeline of talented, qualified individuals ready to take your next job opening.

Sean Peek contributed to this article.

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