Dissatisfaction among existing staff: External recruitment may lead to dissatisfaction and frustration among existing employees. They may feel that their chances of promotion are reduced.

Lengthy process: Recruitment from external sources takes a long time. The business has to notify the vacancies and wait for applications to initiate the selection process

Costly process: It is very costly to recruit staff from external sources. A lot of money has to be spent on advertisement and processing of applications.

Limitations of Internal Sources

The spirit of competition among the employees may be hampered;

 Frequent transfers of employees may often reduce the productivity of the organisation.