Internal recruiting is the process of filling vacancies within a business from its existing workforce. On the contrary, external recruiting is how a business looks to fill vacancies from outside.

Companies today use internal recruitment to fill roles in their business that are best suited to having an insider’s view or knowledge, as well as encourage loyalty and a sense of progress for employees. Internal recruiting is an important aspect of any business as it can save time, money and resources when compared to recruiting externally.

Types of Internal Recruiting

  • Promotions: The most widely used form of internal recruiting is the one everybody hopes for – a promotion.
  • Transfers: A transfer typically entails moving to the same job at a different location or a similar level job in a different department.
  • Temporary to Permanent: Similar to a promotion, this involves making a temporary position holder or intern a full-fledged employee.
  • Employee referrals: A hiring managers dream – and an often overlooked type of internal recruiting. Employee referrals are a great, cost-effective way to get qualified candidates in front of hiring managers. Having a system in place to encourage and gamify the employee referral process will help to ensure you see a constant stream of employee-referred candidates.

Advantages

So, why would you want to hire internally versus looking for talent outside the company? Here are some of the main reasons companies might prefer internal recruiting:

  • Reduces training costs – by leveraging employees that you already have, you don’t need to train new employees. Even if new systems or other small processes need to be taught, not having to go through the entire training and onboarding process is a significant time and money saver.
  • Boost employee morale – everybody wants to feel like they matter in their organization. Promoting from within and/or getting people into roles that they are passionate about will boost both morale and your bottom line.
  • Reduce job posting and screening costs – by recruiting from within, you cut the need to have the hiring manager or recruiter post/advertise jobs and screen unqualified candidates.
  • Decrease employee turnover – in most cases, unplanned turnover is a negative event in an organization. A high employee turnover rate can be a sign that something is wrong in your company. By matching internal candidates with roles that fit their passions and unique skill sets, you can increase the chance that they will stay with your company for the long haul.

Disadvantages

Adversely, why would a company be hesitant to use internal recruiting? Here are some of the most often cited reasons:

  • Lack of fresh perspectives – one of the benefits of external recruitment is hiring employees with fresh ideas and perspectives that can result in new insights for your company. By recruiting from within you might miss out on these innovative perspectives.
  • Workplace jealousy – humans are emotional beings. Assuming you make a strong hire, recruiting externally can help you avoid some of the workplace jealousy that results when someone loses out on a promotion that goes to a coworker.
  • Replacing the employee you promote/transfer – in many cases, when someone gets promoted or transferred to a new role the previous position doesn’t magically go away. You are still going to have to find somebody, either internally or externally, to fill that role. Recruiting internally can seem like a quick way to fill open positions on the surface, but if you don’t have someone in mind who is readily available to backfill the old position it can open up an entirely new can of worms.

When to Recruit from Within?

Using an internal hiring process can be very beneficial, but doing it at the right time and in the right situation is key. Here are some best practices to ensure your company is in the right place to recruit from within:

  • You have a system in place to differentiate your internal candidates from external candidates. The last thing you want to do is send a generic rejection email and risk sending a bad signal to valuable current employees, prompting them to look elsewhere.
  • You have determined that having an insider’s perspective for the role would be more impactful and timely than a new perspective.
  • You have an internal job board and/or career ladder so current employees know what is available, and they have a clear understanding of the next steps in their career path at your company.
  • You have evaluated the internal prospects and determined that the candidate up for promotion is truly qualified and not being favored for improper reasons. This will reduce the chance that their coworkers feel unfairly overlooked for the promotion.
  • You have spoken with the management team to decide on logistics for your internal hiring process. For example: would a manager from the design team be able to encourage a sales team member to apply for an open role?

How to Recruit from Within Your Own Company

Taking into consideration the advantages, disadvantages and best practices outlined above, here is a step-by-step guide for how you might go about implementing an internal recruiting strategy.

  1. Set up your processes – get your internal job board running; decide who should be included in making these decisions; and make a clear and concise policy for both managers and employees. Having all of these set up before you roll it out to your employees will save you a lot of time and headache in the future.
  2. Use an ATS (Applicant Tracking System) – adopting an internal recruitment strategy could potentially inundate you with applicants. Have an ATS in place to easily keep track of the entire hiring process of both internal and external candidates. This is paramount to hiring in the most efficient way. A great ATS will also come with employee referral features built right in.
  3. Encourage Your Employees – this strategy only works if your employees actually know you want them to apply internally. Have a meeting with the managers at your company and advise them to encourage employees to look at the internal job board regularly. This will ensure you have a constant stream of qualified internal candidates.
  4. Screen – just because candidates are already employed at your company does not mean the screening process should be any less rigorous. Make sure that people are applying for jobs that fit their skill sets, and that your company would benefit more from a current employee in a new role versus their current role.
  5. Be Fair – the last thing you want is for your nifty new internal recruitment strategy to backfire and cause negativity in the workplace. Have multiple stakeholders involved in the interview and promotion process to quickly weed out internal candidates using a fair and transparent process.
  6. Give Constructive Feedback – not every person who applies for an internal position is going to be qualified or a good fit for that particular role. You want to let unsuccessful internal candidates down easy; a generic copy-pasted rejection email isn’t going to cut it. Offer advice on skills to work on or certifications to pursue that would make them better suited for the role. Suggesting other roles that may be a better fit is also a good way to ease the disappointment of being rejected for a particular role.

 

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