When hiring for an open position, you may be wondering if your best bet is internal recruitment or to hire a newcomer.
This article makes the case for internal hiring and how it can be a great morale booster, resource saver, and culture builder.
What is Internal Recruiting?
HR leaders use internal recruitment to fill positions with current employees. Internal hiring can be across job functions, managerial levels, teams, and departments.
Internal recruitment is the preferred hiring strategy for most companies. Internal hiring has been found to be 6 times more effective than all other types of hiring. Since the pandemic, internal hiring has increased by about 20% across the world.
Internal Recruiting as a Corporate Culture Key
Want better performance at the top?
Your first step may be to promote from within.
Your current pool of talent has already received tons of time, money, and resources so why not leverage that and build loyalty simultaneously?
Recent studies show that talent recruited from current staff members led to more productivity and improved employee engagement.
According to SHRM, “87 percent [of companies] said that having a strong internal mobility program—where employees are encouraged to apply for new roles within their organization—would definitely help with attraction and retention efforts. However, only one-third reported that their company has such a program.”
As we’ve talked about before, all businesses should be encouraging their employees to further their career skill set. The logical next step to this further training and experience is to move employees up through the company’s ranks – as far as they’re interested in going.
Internal Recruitment Methods
Here are the most common methods of internal hiring.
If you have an employee that you know would be a good fit, consider giving them a promotion! Career growth and the potential for promotions are huge for many employees.
2. Lateral moves
Moving someone from one department or team to another (while maintaining their current job level in the org chart) would be a lateral move. The appeal for many employees is the opportunity to shake things up a bit by working with a new team and manager. They also allow employees to expand their skillset.
Lateral moves are more common in large organizations.
Offer a referral bonus to employees that recommend a great new job candidate for you. This could be a cash bonus, an extra day off, a gift card… anything you think would motivate your team the most.
Referrals are also a huge time saver – they narrow the hiring pool significantly.
4. Part-time to full-time
Moving a 20-hour per week worker to a full-time job can be a clever way to fill an open position. This is especially common in smaller organizations and startups.
5. Bring ’em back
If your company recently went through layoffs, consider bringing one of those employees back to your team.
Before following through with any of these methods, it is essential for HR leaders to document their internal hiring policy. The policy should be fair to internal applicants, set clear expectations for prospects, explain the job posting and employee screening process, and layout the selection decision process.
It is important to clearly communicate to your team when a position has been taken as well. Employees don’t want to hear that a position they applied for was taken by someone else through an email to the entire team! Let them know one-on-one.
Disadvantages of Internal Recruitment to Keep in Mind
While internal hiring is a great strategy for many companies, we wanted to bring some disadvantages of internal recruitment to your attention.
1. It can be awkward
For some, shifting job responsibilities within your organization can lead to some weird situations. Think about being managed by someone that used to be your peer. Imagine if you applied for the same managerial position, but your coworker got it instead of you.
If you choose to promote within, it is important to have a plan for transitioning that person into their new role. If circumstances allow, you can slowly give that person more responsibility over time instead of giving it to them overnight.
The bottom line: keep your culture in mind as you decide how to approach internal recruitment. How would employees in that department handle it?
2. Reduces your options
Hiring from within reduces your options. If you are in a rapidly growing business environment, it may be best to hire from the outside. It is important to bring new ideas and skillsets to the table.
Referrals are a way to expand your hiring pool while still saving time.
3. Limits outside perspectives
Similar to #2, hiring from within can limit the flow of new ideas. It is good to keep things fresh! Brand new employees from different industries, backgrounds, education, and skillsets can be worth the hard work to find. Hiring externally also allows the opportunity to expand team diversity.
4. Leaves a hole to fill
Lateral moves and promotions can leave a gap in your organizational structure. Unless a job becomes obsolete, you may need to hire someone from the outside at some point anyway.
Lateral moves and promotions need to be planned strategically. Make sure you have mapped out your org map and any potential holes that may need to be filled.
5. Employees may get too comfortable
If employees keep seeing many others get promoted from within, and fewer new ideas are brought to the table, employees may start to become too comfortable. It may be harder to bring about true changes within the organization since everyone will be used to working with the same people.
What Does Internal Recruiting Do for Morale?
It truly depends on your company culture and how you handle the internal recruitment process. Promoting internally rather than hiring outside the company can be an impactful way to bring team members closer together. When an outsider is brought into a position a longtime employee has been vying for, tensions will mount, and morale will sink. The resulting feeling for that employee is: why bother?
Internal recruiting can have the following benefits:
- reduce hiring and onboarding timeline
- increase employee morale
- increase employee loyalty
- increase employee engagement
- increase employee retention
- save money in training a new employee from the ground up
Boosting employee morale is a key part of creating a winning culture. And a company’s hiring practices can have a direct impact on that morale. If internal recruiting isn’t possible for some reason, at least involve current employees in the hiring process. You can do this by letting them be part of their new team members’ interviews and selection.
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