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Advantages and Disadvantages of Internal Recruitment

When it comes time to hire your next best employee, there are many choices to be made. One of them is whether to go with internal recruitment. Just what makes this method unique? What should you be aware of before trying it? Here are the pros and cons of starting with your own talent.

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What is Internal Recruitment?

When a company tries to find the best employee to fill a spot by looking at their own workers first, they are practicing internal recruitment. Even if you don’t end up moving or promoting one of your current employees, you give your internal candidates priority before you search outside of your talent pool. How it’s done can vary by business.

Internal recruitment is in contrast to external recruitment, where your company looks to external sources outside of your company to find, interview, and hire job candidates for a new position.

Advantages of Internal Recruitment

There are many perks to looking to your existing talent first. From money savings to employee engagement, here are some of the positives you can expect from the internal recruitment process.

1. Reduces Time to Hire

Compared to external recruitment, which requires you to start a square one with fresh faces that you know nothing about, you’re already familiar with your internal candidates. This allows you to skip many of the steps of full life cycle recruiting, including external job postings on job boards and elsewhere, and the evaluation process.

You also already have access to their pay history, past performance reviews, and background checks. With fully vetted candidates who are familiar with your company culture, you save time and can get your positions filled quickly. And you can do it without much of the training and onboarding of a brand-new hire.

2. Shortens Onboarding Times

Unlike an outside hire, you won’t have to spend months explaining how payroll works or setting employee behavior expectations. Your internal hire already knows the overall company rules and fits in well with the culture. They’ve made connections, too, so you won’t have to spend extra time helping them form relationships. Even if the role is brand new to them, they understand its place in the larger picture of your business, because they know your business.

3. Saves Money

What happens when you reduce time to hire and shorten onboarding times? You save money. In addition to resources saved on finding and training staff or hiring managers, you cut back on cash used for things like using outside recruiters, conducting external recruiting, attending job fairs, and running background checks. If you factor in that many internal employees are up to speed on their new jobs and producing faster than new hires, that’s an additional value you can add to your bottom line.

4. Strengthens Employee Engagement

Do you know what happens when word gets out that a company is looking to hire within? Employees get excited about the prospect of a future of career growth. When investing in people becomes part of your brand, good things happen. It creates positivity in the work culture and sends a message to those outside of the company that working for you has long-term benefits.

Employees who know that they will be prioritized over outsiders will trust you. It’s a morale booster that can improve employee retention and create a loyal workforce.

Disadvantages of Internal Recruitment

While the benefits of this practice shouldn’t be ignored, it’s not a perfect plan. There are some drawbacks to an internal recruitment strategy that everyone involved with the hiring process, from Human Resources teams to managers, should know about before they begin.

1. Creates Conflict Amongst Colleagues

In any situation, it can be difficult to embrace a new boss. But what happens when the new boss is someone who used to be a peer? Hiring internally can cause hard feelings among co-workers who can’t adjust to the new shift in roles and responsibilities. Those who applied for the job, but didn’t get it, can become bitter over time.

You may also have instances where departments are reluctant to give up good team members to allow them to experience career growth. Interpersonal relationships can be affected when internal hiring isn’t handled with care. Knowing about these possibilities and preparing for them are necessary for a smooth transition.

2. Leaves a Gap in the Existing Workforce

While internal recruitment is an effective way to fill new roles, it almost always leaves a vacancy. How do you plan on filling the role that the promoted employee left behind? In the end, you could use internal recruitment to fill that role, leaving yet another hole. It’s an endless cycle of shuffling employees that may ultimately end up with you seeking external candidates to stop the swap.

3. Limits Your Pool of Applicants

Let’s face it. Your employees, while talented, may not have everything you’re looking for in a new hire. That means you may need to look outside of your company to find someone with very specific or technical skill sets. Not only that, but someone from a different industry may be better suited to bring a fresh perspective to a role as well.

If you do business in a quickly-changing industry, like wellness or tech, there are very real dangers that your talent could stagnate. Consider how internal hiring could limit your available options in some scenarios.

4. Results in an Inflexible Culture

One other danger of only hiring from within is that things may get too comfortable for your employees. When groups aren’t refreshed with new faces every now and again, cliques can form and workers may become resistant to change. This type of inflexible culture may bring out the worst in your workspace, because change can be seen as a threat to how they’ve always done things. Consider how to implement new ways of doing things, even with the same people doing the work.

5 Ways to Mitigate the Disadvantages of Internal Recruiting

Now that you know some of the drawbacks of hiring from within, what can you do to stop them? Some tactics that have worked for other businesses include:

1. Communicate How Hiring Works

Let your internal candidates know how you came to a hiring decision. If they wish to know more, consider setting up a meeting to discuss what they could do to strengthen their position next time. Consider building an internal employee referral program, additionally, to further incentivize employees to stay engaged in internal hiring.

2. Provide Other Ways for Mobility

Give employees opportunities to learn and grow within your organization, even if they aren’t a good fit for promotion. Some employees may not be suited for management positions, but they should have plenty of ways to stay challenged in their job and feel relevant to their work. Good work should be rewarded with bonuses, for example, even for employees who don’t move up.

3. Only Share Actually Open Positions

If you have someone in mind for a job opening, don’t communicate the opening, at all. Giving employees false hope that they could be considered may cause conflict. Only send out a call for internal applicants if you’re truly considering all internal applicants.

4. Give Managers Tools for Creating Succession Plans

If you haven’t already trained your leaders on how to look for suitable internal candidates, do so. Get your next managers in place before they are needed, and make it easy for employees to move up and further their career path. This way, when an opening happens, you can check in with department heads to see who is already suited to fill the gap.

5. Don’t Rely Solely on Internal (or External) Recruiting

For best results, mix up your hiring practices to include fresh faces with solid company performers. A solution that balances internal recruiting with external support systems is doable. Comeet’s Elastic Recruiting, for example, provides a remote recruiting team that works directly with your hiring managers to make the best hire. 

Internal recruitment can work for businesses of all sizes. It’s just one of the ways nimble companies stay productive, even when unemployment is at an all-time low. One other way is to make external hiring more efficient with an applicant tracking system like Comeet. Learn how we can help you get the results you need.

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Adrienne Smith

Adrienne Smith

Adrienne Smith is a content strategy consultant working with high-growth businesses on their brand messaging, content strategy, and content creation. A digital nomad, she's exploring the world's cultures and cuisines as she works.

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