Internal recruitment – the act of using current employees to fill a new job opening, is a widespread phenomenon in many organisations. It is also called internal hiring or an internal promotion. Due to the many advantages of internal recruitment, this practice has become a standard talent acquisition process over the years.
This article will explore the advantages and disadvantages of internal recruitment, how it can benefit your organisation, but also how to deal with its disadvantages.
What is internal recruitment?
Internal recruitment is like searching for treasure within a company. If you’re looking for specific talents, finding them within your existing talent pool would be easier than going outside (read here about how to announce a job internally). You are already familiar with all the nooks and crannies. This idea is what internal recruitment is all about.
Imagine that you have a pizza joint where you already have a team of talented pizza makers. These guys already know your signature recipe and secret sauce and have created a relationship with your customers. They also know the kitchen like the back of their hands.
Who would be the ideal candidate if your company has an opening for a new chef? The pizza makers who already know the ins and out of your business, or a new candidate from outside who doesn’t know how you run things around here? Your guess is as good as mine.
Most companies would promote one of the internally experienced pizza makers instead of hiring an outsider. That is precisely why some companies opt for internal recruitment. Let’s explore the advantages and disadvantages of internal recruitment and how to do it right.
Advantages of internal recruitment
One of the main advantages of internal recruitment is that it saves costs. External recruitment often require investing time and resources – creating and putting out advertisements, hiring an HR firm to oversee the process, performing background checks and more interview stages. You must also organise training and onboarding sessions for the new hires. All of these add up to make the entire process expensive.
With internal hiring, you don’t have to spend as much because the candidates already know the company’s culture and policies. You have also long done all the background checks in the past, so they just need a little orientation to fit into the role.
Shortened onboarding time
It’s easier to onboard existing employees into new positions than to do the same for new starters. Since they already know the company operations and have a relationship with fellow employees, internal candidates will easily fit into new roles. This short onboarding time entails that there’ll be only a minimal disruption to workflow, which would have been longer if the company had hired an outsider.
Strengthened employee engagament
Another advantage of internal recruitment is that it motivates employees and increases their engagement with the organisation. When one person gets promoted to a higher role, it gives others the impression that they can climb the ladder if they work more impressively. Consequently, there’ll be a higher level of loyalty, increased productivity, and heightened staff retention.
Disadvantages of internal recruitment
Other employees may become resentful
One of the main disadvantages of internal recruitment is that it may breed envy and resentment. The staff who weren’t selected for the promotion may become envious and suspect a form of favouritism. They may also feel overlooked, undervalued, and demoralised.
This may lead to decreased productivity, conflict, and even acts of conspiracy within the staff. To avoid this, companies must see internal hiring as a delicate process and handle it as such. Hence, there is a need for clear communication and transparency so that everyone knows the person who got promoted is the most qualified candidate.
Limited pool of applicants
Another downside to internal recruitment is that sticking to in-house talent might narrow down your options for potential applicants. While it is advisable to promote deserving employees, you may have a better and more qualified candidate in the out-of-house talent pool. If you don’t throw the application open publicly, you risk missing out on the vast array of talented applicants. These external candidates may better fit this role than your already existing talents.
Can lead to a lack of new ideas and input
If you don’t bring in fresh minds, your organisation may be stuck with the same old ideas and perspectives for a long time. This isn’t ideal for any company that seeks to grow. Hiring external candidates gives room for fresh ideas, diversity of perspective, and new ways of doing things. Your company may need these things to achieve a higher level of growth.
How to deal with the disadvantages of internal recruitment?
Now that we have laid out the odds, let’s talk about how to recruit internally and how to tackle the challenges that come with it. These key points also apply to recruiting in general.
How to recruit internally
- Make the job requirements clear: When announcing the opening (learn how to announce an internal job), you should make the job requirements clear. This will streamline the application pool and ensure that only qualified people apply.
- Make the policies clear: It helps when you clarify the hiring policies for that position. For instance, stipulating a minimum number of years of experience within the company and milestones achieved will ensure that qualified candidates apply for the role.
- Be strict and impartial: There’s no need to announce a vacancy if you already have a candidate in mind. Instead of wasting everyone’s time conducting an interview, why not promote your most-preferred candidate? To get the best out of your internal recruitment, you must shun favouritism and give every qualified candidate a fair interview and evaluation process (learn here how to write an interview invitation email).
- Conduct multiple interviews and evaluations: No matter how long an employee has worked with your company, you may not be able to entirely vouch for their competency until you see them react in multiple scenarios. Conducting multiple interview stages to arrive at the best candidate and carefully choosing your internal interview questions and tests is advisable. Also, create different scenarios and case studies, and assess how they’d handle various challenges. Apart from helping you to identify the best candidate, this multi-level interview process also shows staff that the process was transparent and credible.
- Communicate the results: After hiring the best candidate, you must communicate the result with the other applicants and the entire workforce. Provide feedback on your reasons for not hiring those who didn’t make the cut. Endeavour to be respectful, empathic, and professional even when sending them rejection emails or any other means of communication. Remember that your approach may set how they’d interact with their newly promoted colleague.
Conclusion on the advantages and disadvantages of internal recruitment
In conclusion, internal recruitment has many advantages, such as cost-cutting, ease of onboarding, and increased employee motivation. However, it has some demerits, like a limited applicant pool, a lack of new ideas and perspectives, and possible employee animosity. To effectively manage your internal recruitment process, you should use recruitment technology, such as a recruitment software.
Teamdash is a highly-customisable recruitment software that offers businesses like yours all the recruitment tools you need to hire faster and smarter. It helps you streamline the recruitment process and hire top talent fast.