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Internal recruitment is an approach that many businesses use to leverage the skills and experience that current employees already have. But what is it all about, and how can it benefit your business? From saving time and money on hiring to boosting employee morale, internal recruitment offers several compelling reasons for companies to look inward when filling positions.
In this guide, we’ll cover the advantages of internal recruitment, how it compares to external hiring, and the different methods you can use to find a great fit. Whether you’re new to the concept or looking to make the most out of your hiring decisions, you’ll gain actionable insights that will help you to grow your workforce strategically.
What is internal recruitment?
Internal recruitment is the process of filling a job vacancy with employees from your existing workforce rather than hiring externally. Common methods of internal recruitment include promoting a member of the team to a more senior position, or transferring an individual from one role to another – perhaps even across departments.
As well as helping to save money on recruitment costs, recruiting internally can provide a variety of long-term benefits for your organisation, which we’ll explore in more detail in the next section. This makes it ideal for supporting HR strategies such as employee engagement and retention, as it places more focus on nurturing and developing careers, while also building deeper employer-employee relationships.
Advantages of internal recruitment
There are many different advantages of internal recruitment, which can help your business to operate more effectively in both the short and long term. Let’s take a look at some of the top reasons to embrace internal recruitment for your next role.
Saves time and money
One of the biggest advantages of internal recruitment is how much quicker and more cost effective it can be. It allows you to skip the lengthy process of advertising the role, sorting through a large volume of applications and conducting multiple rounds of interviews. In many cases, internal hires won’t require a notice period, which means that they can start almost immediately.
It also allows you to eliminate the costs associated with external hiring, such as recruitment agency fees and posting adverts on job sites. This can significantly reduce your cost per hire, ensuring that each employee offers a great return on investment and saving money for other HR processes.
Motivates your employees
Offering internal job opportunities is a powerful motivator for your existing team. Employees are more likely to invest in their personal and professional development when they know that they can advance within the company.
Motivation theory suggests that employees thrive when they feel valued and have opportunities for growth, helping to increase the overall productivity of your workforce. Promoting from within therefore helps to foster loyalty and increase job satisfaction, in turn boosting employee retention and productivity.
Simplifies the onboarding process
When recruiting internally, you’re dealing with someone who knows the company’s processes and values, and who’s already familiar with the working environment. This simplifies employee onboarding by drastically reducing the learning curve and allowing them to become productive within their new role faster.
Their existing familiarity with the organisation has the added benefit of minimising disruption and downtime for the managers and team members who are providing training or support. This helps to make the transition smoother and less resource intensive for everyone involved.
Leverages proven performance
Internal recruitment processes allow you to make informed decisions based on proven performance, reducing the risk of a bad hire. By promoting someone from within, you already know in many respects what you’re getting. You’re aware of the individual’s work ethic, skills, strengths and areas for improvement, providing a much better idea of their suitability for the role.
You also know that they’re a good fit for your company culture. Some external candidates may interview well or have all the necessary experience, but may clash with existing members of your team or essential processes. Hiring someone who you know aligns with your company culture supports a healthy working environment and develops stronger collaboration.
Disadvantages of internal recruitment
There are also a few drawbacks to recruiting internally that you need to be aware of before choosing this route. Familiarising yourself with these disadvantages will help you to determine whether the internal recruitment process is the right choice for a particular role.
Risks internal biases
One of the main risks of recruiting internal recruitment is that existing relationships and personal biases could influence hiring decisions. For example, managers may favour certain candidates based on their relationships, rather than their ability to perform the role. This can lead to an unfair recruitment process and potentially leave better-suited candidates out of the running. Blind recruitment techniques can help to create a more objective selection process by concealing the candidates’ previous employment history and focusing solely on their hard and soft skills.
Restricts your applicant pool
Internal recruitment can sometimes prevent companies from finding the best possible fit for a role, particularly if the job demands a high level of expertise, or falls within a niche sector. By their very nature, internal recruitment processes limit your talent pool, meaning you could miss out on exceptional external candidates. Your current workforce may not possess the required competencies for certain roles, hindering their growth potential or leading to skill gaps in the organisation.
Limits business innovation
Fresh ideas are key to staying competitive in any industry, and relying solely on internal recruitment may limit this. Internal candidates are often deeply ingrained in the company’s way of working, which can make it harder for them to introduce new approaches or perspectives. Bringing in external talent can inject new energy and foster innovation, allowing your organisation to benefit from knowledge gained within another company – or a different industry altogether.
Creates internal competition
Promoting someone from within can sometimes lead to feelings of resentment among employees who were passed over for the role. This internal competition can breed dissatisfaction and potentially increase employee turnover if team members feel that their career progression has been stunted. To avoid this, it’s important to communicate clearly and offer development opportunities to all employees, so they feel valued even if they aren’t selected for a particular promotion.
Different methods of internal recruitment
When it comes to filling roles from within, there are several methods of internal recruitment that businesses can use depending on their needs. This allows you to leverage your current workforce, promoting development and mobility while filling vacancies more efficiently. Let’s look at some of the most common approaches.
Promotions
A promotion is when an employee is moved to a higher-level position within the company, usually with more responsibility and a salary increase. This is one of the most widely used methods of internal recruitment, as it rewards high-performing employees and encourages others to aim for advancement.
Transfers
A transfer involves moving an employee from one department or role to another at the same level. This is useful for filling positions where specific experience or skills are needed but doesn’t necessitate a promotion. Transfers allow employees to broaden their skills while helping you to address business needs.
Employee referrals
Employee referral programs encourage current staff to recommend candidates from within the company or suggest external hires. This can be an effective method of internal recruitment, allowing you to identify hidden talent within your workforce. Creating a culture of 360 feedback can help you to encourage peers to recognise their peers’ strengths and potential.
Company restructuring
During company restructuring, employees may be moved into different roles as part of an organisational overhaul. This form of internal recruitment often happens during mergers or downsizing, where positions are reshuffled to better align with the company’s new structure and goals.
What should the internal recruitment process involve?
The internal recruitment process requires a clear and structured approach to ensure fairness and efficiency. While it’s similar to the external recruitment process, internal recruitment often moves faster and requires less time for onboarding.
The steps involved will vary depending on the specific method of internal recruitment, but generally include:
- Identifythe role that needs to be filled and consider whether internal candidates may be a good fit.
- Share the opportunity with your employees through internal communications, job boards, or emails.
- Screen candidates based on their qualifications, experience, and potential to succeed in the new role.
- Interview selected candidates to assess their suitability, taking into account their performance and cultural fit.
- Offer the position to the successful internal candidate, including details about salary, new responsibilities, and any training needed.
- Support them in adjusting to their new role through an effective employee onboarding process.
Streamline your internal recruitment process with PeopleHR
In this guide, we’ve explored what internal recruitment is, its advantages and disadvantages, and the various methods of internal recruitment you can use to uncover talent within your organisation. While recruiting internally offers lots of benefits, it’s important to manage the process carefully to avoid issues and ensure an effective hiring process.
Using software like PeopleHR’s applicant tracking system can help to streamline the entire internal recruitment process, making it faster and more efficient. This allows you to easily manage job postings, review internal applications, and ensure a smooth transition for your team.
Ready to optimise your internal recruitment process? Explore our demo or contact us to learn more about how you can make the most of your existing workforce.
