What is internal recruitment?
Internal recruitment allows organisations to fill vacancies within their own business. This process is often appealing for C-suite and senior management roles as they already know the company culture, policies and goals.
However, internal transfers are not always the best option for filling these positions.
What are the different options when recruiting internally?
There are usually 4 ways to use internal recruitment to fill vacancies:
Promoting a member of staff to a higher-level role is one of the most common option. This is often a natural part of an employee’s career progression.
Transferring employees from one functional department to another is a great way for organisations to utilise skills and progress employees without promoting anyone to a more senior (and higher-salaried) role. This also provides opportunities for employees to broaden their skillset, or change direction in their own careers within an organisation they understand and where their skills are already understood, fast-tracking any training requirements
Temporary to Permanent transition
Employees on a temporary contract may be a good fit for permanent roles when they arise since they would have had time to develop an understanding of the company.
While not the most recognised form of internal recruitment, referrals from employees in bigger organisations serve many of the same purposes since candidates will be pre-vetted by someone who knows exactly what the company needs in terms of skills and values, while avoiding the cost and time involved in screening applications that come with recruiting externally.
What are the Pros? How can internal recruitment benefit a company?
1. Saves onboarding and hiring time
The time to advertise, screen and interview candidates, plus the time it takes to onboard them once hired is a drain on company resources. Internal recruitment removes all of these processes as the candidate is known to the hiring manager and already has a sound knowledge of how the company operates.
2. Lower costs to the company
Once you calculate the time and resources needed to recruit and onboard an external candidate, it can cost companies thousands before they even pay the employee a salary. Since none of these processes are involved with internal recruitment, these costs no longer apply.
3. Improves Employee Engagement
Internal recruitment shows employees that you appreciate and reward their work which can boost employee satisfaction, retention and performance since they have a goal to aim for.
4. Mitigates Risk
When hiring someone externally, there is always a small risk that they won’t turn out to be the best candidate for your organisation. They may not have the skills they claimed, they may not perform as desired or they may clash with other members of the business. In these cases, good assessment tools and processes are essential.
When filling a position with someone from within the company, you will already know what skills they have, how they perform and how they work with other team members so much of this risk is removed. It should be noted that when working with an executive search firm like ProSearch, extensive candidate vetting and evaluation also mitigates a lot of this risk.
What are the Cons? Why might external hiring be better than internal recruitment?
1. Leaves gaps in the workforce
Arguably one of the biggest cons of internal recruitment is that you will be left with a vacancy where your internal hire used to sit within the business. This means that all the time and money saved on your previous hire will end up being spent on filling this new role anyway.
2. Reduces innovation
One of the biggest benefits of external recruitment is that you can bring in talent with new ideas, ways of working and approaches to business that could radicalise how you operate. Internal candidates are less likely to have a ‘fresh set of eyes’ and will often continue to approach challenges in the same way they always have.
3. Limits candidate pool
If you only hire from within your organisation, you could be cutting yourself off from the best talent for the role simply because they don’t already work for you. If there is a new role to fill or a new challenge to solve, it’s likely because you don’t have the skillsets or experience internally to solve it already.
4. Can cause friction
Particularly when internal recruitment involves a promotion, candidates who were not considered or successful can be resentful of those in the new role – especially if they feel it was an unfair choice. Senior leadership candidates need to have the respect and appreciation of everyone in the business for it to truly function effectively.
Things to bear in mind
As we’ve highlighted, there are some benefits to recruiting internally but they need to be carefully balanced against the drawbacks.
It’s not the only way to show appreciation – Internal recruitment is a good way to boost employee morale and reward performance. But this shouldn’t be the main reason behind your decision to recruit internally. To show appreciation you can introduce employee rewards schemes, bonuses and other incentives.
Ensure you manage the change effectively – While there isn’t an onboarding process the internal candidate has to go through, there is still a change that needs to be managed correctly to reduce errors, complications and confusion. Be clear at what point their responsibilities and routines will need to change and make sure all the relevant teams around them are prepared for how it will impact them.
You still need to vet internal candidates – One of the most common mistakes made during internal recruitment is promoting someone to a management position because they have experience and skills in their current job that requires no management skills. Remember to vet internal candidates in the same way as you would with external candidates – if they don’t have the skills and experience needed for the vacancy, they shouldn’t get the job.
Consider relationships with other employees – As we’ve mentioned, the relationships internal candidates have with other team members can play a significant role in how successful they are once promoted or transferred. If they are not confident, authoritative and respected or if they have clear biases towards certain teams and employees, you should consider how this will impact them in a new role within the company. Over promoting staff, can lead to bigger issues, especially when they are managing or influencing other members of the team.
Use a mix of internal and external recruitment – As a leading procurement and supply chain recruiter, we know there is no one-size-fits-all approach to recruitment and that each company will have slightly different requirements. This means it’s impractical to tell you to only use internal or external recruitment methods. Instead, we advise that you use a mix of recruitment styles as appropriate for your business. E.g. If you know there is a perfect candidate within your business already then internal recruitment makes sense, but if the role requires some fresh strategic thinking, then external recruitment is likely to be a better option.
There is a time and place for internal recruitment but in many instances, it’s worth exploring all the talent that is available (even if this means looking externally) to ensure you hire the best person to move your business forward.
Do you need to fill a specialist procurement or supply chain role? Our executive search team works with your business to find, assess and recruit the best talent for your business.
Get in touch with one of our advisors to discuss how we can help you and your business. We partner with organisations in a transparent and open approach to ensure they have all the external market knowledge and information needed to make the right hiring decisions.