The World Wide Web makes recruiting so easy and inexpensive the advantage has shifted towards external hiring. The turnover rate for external hires is almost always higher than internal promotions because the candidates must both adjust to a new environment and they come to us as relative unknowns. Customers may feel slighted if they don't get one of the Firm's current employees. In a tight job market there may be little external talent available or the quality of the limited talent may be poor. Hiring talent away from customers and suppliers may harm your business relationships.
Legal issues can occur when hiring intact teams, top technical talent with non-compete agreements.
In a competitive market you can't hire quality talent without a strong recruiting function. Learning internet recruiting and setting up web pages may be prohibitively expensive or time consuming. The world of external recruiting changes so rapidly and is so competitive that we might end up with lesser talent unless we can afford a strong recruiting function. The likelihood of lawsuits resulting from illegal practices by hard to control managers is high. External hires have already demonstrated their lack of loyalty by leaving their firm.