Table of contents
In this guide, we'll cover the pros and cons of internal recruiting as well as some tips to help manage the recruitment process.
Internal vs. external recruiting
Internal recruitment is a hiring process that relies on internal candidate applications rather than recruitment strategies. Internal candidates may be promoted within their current team, or the job opening may be on a new team with a different hiring manager.
External recruiting means sourcing qualified candidates from an outside talent pool. The hiring process may include posting job descriptions (on the company website and across various job boards), hiring third party recruiters, or attending job fairs to attract niche talent.
Types of internal recruiting
Companies can make the most of the skillsets in their existing workforce in several ways:
Employee referrals: Current employees may refer candidates within their network for an open role. Employee referrals are often considered a safe bet for matching new hires to the workplace culture, and many organizations have employee referral programs to incentivize employees to lend a hand in the recruitment process.
Promotions: Promotions are a common method for internal recruiting. It involves moving current employees up in seniority. Often they know the existing team so it can make for a smooth transition.
Transfers: Transfers involve lateral moves for existing employees who may have interests in other departments, locations, or teams. More often than not, this type of move doesn't translate to a promotion.
Internal job postings: Internal job postings allow for open positions to be available to the existing workforce across the company. Internal candidates apply at their own discretion according to the job description.
Temp-to-perm status changes: Sometimes freelancers who have contracted with the company apply to be full-time employees. Many contract employees will consider stability alone a promotion.
4 advantages of internal recruiting
The advantages of internal hires are clear. Most human resources teams prefer to hire from within, primarily because it saves time investing in external candidate screening and selection. Here are a few of the reasons why recruiting internally is popular among talent acquisition teams.
1. Cheaper and faster hires
When qualified candidates pop up from internal talent pools, it requires less work for the hiring team than bringing on a brand new employee. And not having to spend budget on advertising, third party recruiters, and background checks saves a lot of money.
It often means less (if any) interviews too, which can save the hiring manager's time — and easy access to their current manager means less time playing phone tag with references.
2. Easier onboarding
The internal hire is half-trained already — they're used to the work environment. Depending on whether they'll stay working with the same people, it can mean a shorter onboarding process.
Also, internal candidates already have their technology set up. If you've ever had to set up a laptop on your first day of a job, you know how time-consuming it can be. Instead, internal candidates can jump into productivity faster and easier than external hires.
Good onboarding helps increase employee retention. Companies are 22% more likely to retain an employee for three or more years when there’s been an internal move, according to the 2022 LinkedIn Global Talent Survey.
3. Better employee engagement
When employees have a clear career path, they feel connected to the purpose of their work. Current employees who are given promotions within the company feel taken care of and appreciated.
4. Stronger company culture
When a higher number of employees stay within the company for longer periods of time, it positively impacts company culture. Culture takes time to form, and with every new hire, the company culture experience shifts.
3 disadvantages of internal recruitment
The disadvantages of internal recruitment are worth noting. While it can save valuable time to recruit from your existing pool of candidates, there are a few trade-offs.
1. Potential tension between team members
It's normal that the team wants to see their colleagues promoted — unless, of course, they were gunning for the same role. This can cause some tension between team members.
A hiring manager who wants to hang onto their star employee may make it difficult for them to advance along on their career path to a new team. Needless to say, this can cause friction too.
2. A more limited talent pool
It's easy to overlook the fact that within an evolving workforce, internal candidates may not be the most qualified for new roles. Saving time and money is great, but not at the cost of innovative ideas or fresh perspectives.
3. Potential lack of diversity
A strong company culture could be a slippery slope into a homogeneous culture — be mindful of hiring for “culture fit” versus “culture add.” Diversity makes for more effective problem-solving, greater innovation, and ultimately more profitable organizations. If you get stuck in your tunnel vision of hiring people who think like you, it limits diversity.
How to overcome internal recruitment challenges
The disadvantages of internal recruitment shouldn't deter you from promoting your qualified staff. Here are some helpful hints to promote a healthier approach to the process.
Strive to provide transparent communication
Use all that time you saved in the initial hiring process to provide excellent interview feedback. Be clear with internal candidates on why they weren't hired for the open role. When they need more clarity, make yourself available.
Prioritize career path planning
When candidates express interest in an open role that's outside their scope, hiring managers should be encouraged to meet to discuss their career objectives. Aligning team members’ priorities between company goals and personal goals enhances employee engagement. Regular career conversations give structure to performance reviews and help team members feel like they’re working toward something meaningful.
Stay mindful of employee morale
Employees may feel jaded if you've led them on toward an internal position that they didn't end up receiving. Protect the delicate balance of team morale. It can be difficult to get it back if resentments are festering from poor communication.
Change up the hiring process
Be flexible with your hiring process. Allow for a balance between internal vs. external candidates and round out the recruitment methods. Use Calendly to manage complex scheduling seamlessly by involving only the most relevant parties. The platform easily and effectively enhances team productivity, which is another big recruiting challenge when hiring internally (and externally, too).
If you’re struggling with whether to allocate more time to external recruitment, here are some indicators that you should look outside of your current staff:
The open role requires a niche or new skill set or language
The project requires an unbiased or fresh perspective
Internal candidates aren't self-promoting for job vacancies
The internal role isn't an exciting move for the internal candidate
You finally have the time to onboard new hires
You're in startup mode
It's time for a shift in company culture
A balanced approach to your internal recruitment strategy
Always strive for the "best candidate wins" mentality. Find your balance between speed, quality, and value when making the right hiring decisions.
Start offering existing talent opportunities to upskill with professional development funding to fill gaps. Employee engagement will go up while team members explore topics they're curious about. This may lead to better qualified internal hires later.
In the meantime, post job descriptions internally and externally for each new job. This will give equal opportunity to job seekers and allow for the best candidate to win.
Recruiting Week 2023: A virtual series for talent acquisition professionals
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