3 Benefits of Internal Recruiting

It’s no secret that managing the hiring process can be time-consuming for businesses.

Filling vacancies typically requires hiring managers to promote the open position on job boards such as LinkedIn, conduct several interviews to determine candidates’ skill and cultural fit, and complete any necessary background checks before hiring an external candidate.

Even for seasoned HR professionals, this process can be grueling and is far from perfect. In fact, a 2021 Jobvite survey found that the top three concerns among recruiters are improving quality-of-hire, improving time-to-hire, and increasing retention rate.

One way you and your team may look to assuage these concerns is to incorporate internal recruiting into your company’s overall recruitment strategy.

By encouraging the sourcing of current employees for new roles rather than relying solely on external hires, you can remove some of the uncertainty from the process and reap the advantages of internal recruitment. You’ll spend less time hiring and onboarding before your business need is actually met.

This article will define internal recruitment, discuss its advantages and disadvantages, and help determine if looking to fill an open position internally is best for your business.

What is Internal Recruitment?

Before we discuss the advantages and disadvantages of internal recruitment, we first need to define and discuss the internal recruitment process.

Internal recruitment is filling job openings with internal employees rather than bringing in new hires.

Hiring managers can source existing employees in-house for new positions using several recruitment methods. The human resources department can set up an internal job posting, seek out manager recommendations, find candidates in an internal skills database, or reference any transition planning conducted by the team manager with the vacancy.

The alternative approach to recruiting is external recruitment. This practice is defined as the assessment of candidates outside of your internal talent pool to fill an open position.

External recruiting is what most people think of when they hear the phrase “talent acquisition.” Candidates will mostly be found via responses to a public job posting, though some may be sourced via employee referrals.

While internal hiring has been growing in popularity over the past decade, many still see external recruitment as the standard. However, the value of recruiting internally shouldn’t be overlooked by businesses of any size.

3 Advantages of Internal Hiring

Now that we’ve discussed the concept of internal recruitment, you may be wondering what advantages it could hold for you and your business.

Here are 3 advantages internal hiring has over external hiring:

1. Maximizing employee engagement
2. Meeting business needs faster
3. Building a cohesive company culture

Read on for a more in-depth discussion of each advantage.

1. Maximizing Employee Engagement

Employee engagement is a hot topic among managers and HR professionals today. Smart business leaders will take reasonable steps wherever possible to help keep employees involved in, committed to, and enthusiastic about their workplace.

Executives’ interest in bettering engagement has been increasingly evident over time. In fact, engagement rates for US-based employees have seen a gradual rise over the past two decades, from 26% in 2000 to 36% in 2020.

This interest in employee engagement is sensible for many reasons. For instance, research from Gallup shows that companies with the highest employee engagement scores are 21% more profitable than those with the lowest scores.

For individual team members, a greater level of engagement translates to more job satisfaction, a higher likelihood to go above and beyond, and less reason to look elsewhere for a new role.

For the company, greater engagement translates to improved employee morale, increased operational efficiency, and less turnover.

Employee engagement and internal recruitment are directly related. Nearly half of employees surveyed by SHRM indicated that career advancement opportunities are very important to their engagement level. For Millenials in particular, research shows that 87% consider career development necessary.

Internal recruitment allows you to show your full-time employees that clear career paths exist for them at your company, which should help keep them engaged.

A commitment to interviewing and promoting from within demonstrates to all employees, not just those being considered for new roles, that their performance is recognized and valued by management. It also encourages high performance in current roles to develop professionally in the long term.

By leveraging internal recruitment, you can show a commitment to your team’s professional development, drive a greater level of employee engagement, and improve employee retention.

2. Meeting Business Needs Faster

Hiring a new employee often feels like a massive victory for a company. Bringing in a new professional with a diverse background and skill set can help make a team’s operations more cost-effective and more successful.

However, the benefits are seldom realized on day one of the new hire’s tenure. Rather, the new team member must be onboarded and brought up to speed about your business practices and procedures before they can genuinely engage in value-adding activities.

Conventional wisdom dictates that the onboarding process should take about three months. Many companies try to skimp on this mandate to immediately add new employees into the business.

However, recent research conducted on behalf of the OPM shows that onboarding should be a longer process, ideally concluding after the employee’s first year with your company.

Especially for industries and positions with a steep learning curve, the new employee’s talents won’t be fully utilized until relatively deep into their tenure.

If you make an internal hire, this onboarding time can be cut down significantly. While a new role will take some getting used to on the part of the team member taking it on, they won’t have to get accustomed to your company culture or be added to all your tech systems.

By considering existing employees for new roles, you can cut down on onboarding time and have the business need you initially opened the job requisition for met sooner than if you made an external hire.

3. Building a Cohesive Company Culture

Earlier, we discussed how internal recruitment can help promote employee engagement. Along those lines, opening new positions to internal candidates can help you boost a strong, cohesive company culture that will withstand the test of time as your company grows.

By hiring from within and directing team members to new opportunities as their skill sets and professional desires change, you will be able to enhance your retention rates.

LinkedIn’s Global Talent Trends report backs up the importance of internal mobility to retention. The report shows that having internal hiring channels open to employees makes them 12% more likely to stay with a company for 1 year and 19% more likely to stick around for 2 or 3 years.

With team members staying with your company for extended periods of time thanks to internal recruiting, you can ensure that your corporate values are being upheld by people who have been with your company for a long time.

The values will not only influence the employee experience and your ability to hire and retain top talent but also affect your business’ professional relationships with suppliers and customers. As such, retaining employees throughout your organization is key to long-term success.

2 Disadvantages of Internal Recruitment

We’ve established that internal recruitment has clear advantages for companies of any size and in any industry. However, overlooking the practice’s drawbacks would be negligent.

Here are 2 disadvantages of internal recruitment that should be considered for any opening:

1. Taxing your internal talent pool
2. Limiting fresh perspectives

Keep reading to see how these disadvantages may apply to open positions within your company.

1. Taxing Your Internal Talent Pool

While we’ve discussed the benefits of moving existing employees to new positions at length, hiring managers should consider how an internal candidate leaving their current position will affect the business at large.

By hiring an internal candidate, you’re effectively creating a new job opening in their current role with the added skill gaps that might open the door to external recruitment.

If this candidate is stepping into a more senior position or taking on a more specialized set of responsibilities, this shift will probably be a net positive. Additionally, candidates interviewing for internal roles may very well consider external ones.

Still, you and your HR team should ensure that a backfill plan for an internal candidate’s role can be easily implemented before extending an offer. You can minimize operational hiccups as the team member’s responsibilities shift.

2. Limiting Fresh Perspectives

The need for an external hire may feel clear when the skills your business needs are specialized and not found within your current team.

Even for roles you may be able to fill internally skill-wise, looking externally can be a boon to diversify the perspectives among your employee base.

Through the research of many, including MIT Professor Evan Apfelbaum, diversity has been proven to improve the decision-making capabilities of a group. A more diverse group will have been exposed to a wider array of experiences that will help them arrive at a better conclusion than a homogenous group would when posed with the same challenge.

In line with this research, bringing in external hires can help promote diversity of thought and stronger decision-making within your workplace.

Internal hires will typically be more inclined to conduct business like your company always does due to their comfort with your current processes. External hires, on the other hand, will bring a wealth of prior experience with them to open roles that can help drive process improvement.

By looking externally, you can ensure that your business has the fresh perspectives necessary to keep innovating and operating as effectively as possible.

Internal vs. External Recruitment — Which Should I Use?

After reviewing the advantages and disadvantages of internal recruitment at length, you’re probably wondering which tactic would be better for you to use the next time you kick off the hiring process.

As you can guess, there’s no blanket answer to this question.

While positions that require niche skills may lend themselves better to external hires and positions that need to be filled quickly may lend themselves better to internal hires, you’ll most likely see the most significant degree of success in filling open positions by considering both internal and external candidates for all openings.

To encourage internal candidates to apply for open positions, though, you’ll want to make sure you communicate your commitment to the internal recruitment process clearly. Maintaining an internal job page that includes information only current employees can access is one way to do so.

Another way to increase your team’s involvement in internal and external hiring processes is to set up an employee referral program. This program would provide a bonus to any current employees who refer a candidate who is eventually hired for an open position.

With a referral program, employees will feel invested in the hiring process even when an external hire is made. Additionally, when a referred candidate is hired, the referring employee will know that your organization values their opinions.

Internal Candidates Can Improve the Recruitment Process

As we’ve demonstrated throughout this article, incorporating internal recruiting into your business’ talent acquisition strategy can help you excel as your business grows.

Internal hiring promotes employee engagement and a cohesive corporate culture throughout your business while ensuring that new business needs are met promptly.

While internal recruiting may strain your internal talent pool and limit the diversity of thought present in new positions, embracing the approach in conjunction with an external recruiting program can help businesses of any size meet the changing needs of their marketplace effectively and sustainably.

Additional Reading

• Benefits of Using a Healthcare Recruitment Firm
• 5 PR Trends for HR Providers