Internal Recruiting: The Advantages for Employers

Internal recruiting is like choosing from your work family for new opportunities, and it comes with a bunch of great perks. You'll save money, make the hiring process a breeze, keep your coworkers happy, boost loyalty, and find the perfect fit for your company culture. Plus, you get to keep all that valuable inside knowledge in-house, and it's a smart way to plan for the future by grooming potential leaders. So, it's not just about finding a candidate; it's about nurturing your talent and your business growth.

What is Internal Recruiting

Internal recruitment means hiring people who already work for your company for new or open roles. It requires informing your employees about the available opportunities and using their existing skills and knowledge from various areas and levels of the organization to fill their needs and support their career development. It includes promotions, making temporary or contract workers permanent and full-time, and rehiring former employees. Aside from that, employee referrals are also considered internal recruiting because you don’t have to search for your employees outside.

Benefits of Internal Recruiting

1. It costs less

You can help your organization reduce the expenses of advertising, screening, testing, and interviewing external candidates through internal recruiting. It helps shorten the rather long recruiting and hiring cycle and avoid the risk of losing out on good candidates to other employers. Plus, you can save on training and orientation costs, since these employees are already familiar with the company policies, procedures, and systems.

2. They understand the company

Since existing employees are already working for you and have developed experience over the years, they will have a better understanding of your company's culture and values than a new recruit. They know what is expected of them and how to work well with their colleagues and managers. Plus, they also share your vision and mission and are more likely to align with your goals and strategies. This way, you don't have to worry about employees not being a cultural fit.

3. Happier Hires

Statistics show that 40% of workers are leaving their jobs because they are unhappy with the opportunity for career advancement. [1] No employee wants to be stagnated with their career development and if they can't move forward in their career path with your company they will likely resign.

When you demonstrate that your company is willing to offer promotions, it boosts morale and shows your employees that you value their contributions and potential. It can also create a culture of learning and development, where employees are encouraged to acquire new skills and take on new challenges. By offering internal opportunities, you can increase employee satisfaction, engagement, and loyalty.

4. You know them and they know you

Hiring from within your organization is less risky. You have seen the employees work in your company, even if not in the same role, they have established relationships with coworkers and clients which make them capable of making immediate contributions in their new role. You know their skills, their cultural fit, their problem-solving abilities, and so on, which makes you trust their potential.

You can also verify their qualifications, experience, and references more easily than external candidates. For example, a content writer can easily be promoted to head of content since they have previously worked with the person who handles the position and has experience in the role. This implies that internal hires can quickly adjust and perform better and faster in their new positions, which benefits both their personal career goals and the company’s overall achievements.

5. Retention and loyalty

Internal recruiting can help you retain your best talent and reduce staff turnover. By providing career advancement opportunities, you can prevent your employees from leaving for other employers or competitors. You can also foster a sense of loyalty and commitment among your employees by rewarding them for their hard work and dedication. This can enhance your employer's brand and reputation as well as your productivity and profitability.

As you can see, internal recruiting has many advantages that can benefit your business in the long run. However, internal recruiting also has some challenges that you need to be aware of and address effectively. keep reading to learn more about the drawbacks and best practices of internal recruiting.

6. Upgrade your institutional knowledge

"Hiring from within often helps keep your best employees around longer, reducing the risk of losing institutional knowledge of platforms, processes, and workflows. Your organization is able to avoid churn and turnover that could disrupt large projects,” says Geoff Whiting, Content Strategy Manager for Hubstaff.

"Even better is the chance to turn people with strong institutional knowledge into leaders. Part of their new role should include documenting processes and developing training for their previous role — especially when teams go remote. It always pays to prevent there from being a single individual who knows how to do any given process."

Internal vs External Recruiting

Since you are now familiar with the concept of internal recruiting, let's go ahead and take a look at how it compares with external recruiting which involves looking for candidates outside your organization.

The decision between internal and external recruiting will depend on various factors, such as the type of position, the availability of candidates, the urgency of hiring, budgets, and the goals of your organization. The best way to decide is to weigh the pros and cons of each option and use a balanced approach that suits the needs and objectives of your company.

Internal Recruitment:

• Pros: Cost-efficient, quicker onboarding, boosts employee advancement.
• Cons: Limits candidate choices, potential for employee dissatisfaction, reduced diversity.

External Recruitment:

• Pros: Widens candidate pool, brings in new ideas and skills, enhances competitiveness.
• Cons: Costly and time-consuming, risk of hiring mismatches, potential employee dissatisfaction.

Here are some examples of when each method might be more suitable:

• Internal recruitment: You might want to use internal recruitment when you have a high-performing employee who is ready for a promotion or a career change within your organization. For instance, if you have a sales representative who has excellent writing skills and knows your product well, you might consider them for a content marketing position. This way, you can reward their performance, motivate them to learn new skills, and leverage their existing knowledge.
• External recruitment: This technique might be used when you need to fill a new or specialized role that requires skills or expertise that are not available within your current workforce. If you are launching a new product that requires a different technology stack or a new market segment that requires a different language or culture, you might look for external candidates who have the relevant experience and qualifications. So you can access a wider and more diverse talent pool, bring in fresh perspectives and ideas, and increase your competitive advantage.

Internal Recruiting Methods

Here are five effective internal recruitment methods that can help you identify and promote your most promising employees, ensuring a seamless transition and maximizing the potential for success within their own ranks:

1. Vertical

Promotions are one of the most common internal recruitment methods. When you want to retain high-performing team members, you give that individual a promotion. You assign them more tasks, a new role name, and a higher salary. This helps you show that you value their work and encourage them to grow in their career which will eventually boost the engagement and trust of the employee with your company. As an HR Manager, you can utilize internal job boards, intranets, or company newsletters to inform employees about available positions.

However, you should also provide them with adequate support and training to help them adjust to their new role since they will be adjusting to the new role which can sometimes be overwhelming.

2. Transfers

This method is usually used by larger organizations especially those that have offices in more than one country. It involves relocating your employees to a different location or department within your company. This can help them develop new skills, expand their network, and experience a different work environment. Although, you should also consider their preferences and needs, as well as the impact on their current team.

3. Former employees

Reaching out to former employees who have parted with your company on good terms can also be a good internal recruitment strategy since these people are already familiar with the way you do things. You can reach out to talent who completed their tenure or apprenticeship and invite them to rejoin your organization. They may have gained new knowledge, skills, or contacts that can benefit your company. But before you do so, it is a good idea to assess their current situation, expectations, and why they left in the first place.

4. Referrals

Referrals can be considered a part of internal recruiting, but they are typically categorized as a subset of it. This method is sometimes ignored by many HR Managers because it can sometimes lead to favoritism and biases. However, employee recommendations are an excellent, low-cost method of putting eligible prospects in front of hiring managers. You can encourage your current employees to suggest their friends or contacts who might be suitable for working in your company. They can help you find qualified candidates who have similar values and fit your company culture. However, you should check the credentials and compatibility of the referred candidates, as well as try to avoid any favoritism.

5. Talent Management Programs

Talent management programs involve identifying high-potential employees within your company and providing them with growth opportunities and career development plans. By investing in the development of talented individuals, you can nurture their skills and prepare them for future openings within the organization. Talent management programs also contribute to employee engagement and retention by showing employees that their growth and advancement are valued.

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Tips For Managing Internal Recruitment Process

• Create an internal recruitment policy that defines the eligibility criteria, application process, evaluation methods, and feedback mechanisms for internal candidates.
• Use an Application Tracking System (ATS) to keep track of candidates throughout the hiring process and ensure fairness and transparency. An ATS like Manatal, for example, can help you post your job openings on your company’s intranet or career page, collect and store resumes and applications from internal candidates in a centralized database, and filter and rank candidates based on keywords, skills, qualifications, or other criteria.
• Let employees know about open positions through various channels, such as email, internal newsletters, internal job boards, or chatting with managers. Provide details of the job description, qualifications, expectations, and benefits.
• Employee referrals are a great way to get qualified candidates in front of hiring managers and increase employee engagement. So, encourage employee referrals by offering incentives, recognition, or gamification.
• Promote employees fairly by maintaining transparency throughout the process. Provide feedback to applicants who didn’t get the job on what skills may help them qualify in the future.

Conclusion

Internal recruiting can be a great way to fill roles quickly and retain talent within your company. However, it should not be the only option for hiring. External recruiting can also bring fresh ideas, skills, and perspectives to benefit your company in the long run. Therefore, it is advisable to use a balanced approach of both internal and external recruiting to achieve the best results.

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Citations

1. Fortune