Effective hiring tends to be one of the key factors behind any organization’s success—from boosting productivity to amplifying profitability, employees with the right set of skills and experience bring immense value to a business, all of which ultimately sum up to make it prosperous.
However, consistently finding such talent can be a challenge. This is why companies turn to the age-old method of internal recruitment.
💡 Internal hiring has several benefits—a reason why 75% of recruiting pros believe it to become a vital factor in shaping talent acquisition in the coming years.
So today, let’s dive deep into this concept. Read on as we discuss what is internal recruitment, its types, advantages, disadvantages, and everything else in between. Let’s start!
What Is Internal Recruitment?
Internal recruitment is the process of filling vacant job positions in an organization without hiring fresh candidates from outside. In other words, it refers to when companies offer the role to their existing employees.
Here’s an example:
Suppose company X needs an in-house content writer to produce blogs, articles, website content, etc. Rather than going through a full-fledged external hiring process, it decides to hunt for the talent within its organization and offers the role to an existing employee with a flair for writing engaging content. This is called internal recruitment.
What Are the Different Internal Recruitment Types?
Internal recruitment is a versatile hiring method that can be of various types. Here are some of the top ones:
Promotions
When a company offers a higher-level position to an existing employee, it’s called a promotion. One of the most effective internal recruitment methods, promotions involve an increase in the authority, responsibility, and remuneration of the employee.
Transfers
A transfer is when an existing employee is moved from one position or department to another within an organization. However, their responsibility, authority, and remuneration remain the same.
Referrals
Sometimes, existing employees are encouraged to refer their peers for an open position within the organization. This is called a referral. Generally, employees whose referrals are hired get a bonus.
Part-Time to Full-Time
To avoid headhunting, companies may offer a full-time position in their organization to a temporary worker, such as a contractor or a freelancer. This is another very popular internal recruitment tactic.
How Does Internal Recruitment Work?
Internal hiring is a structured process that typically takes place in the following way:
1. Company Identifies a Vacancy
The company finds a need to fill a vacancy in the organization. It could be a newly created position due to business expansion or an old one made vacant due to employee resignation, firing, etc.
2. It Creates a Job Description
Once the need is identified, HR creates a job description for that vacancy. It highlights different aspects of the role, such as its responsibilities, qualification and skill requirements, remuneration, potential perks, etc.
3. It Internally Communicates the Opportunity
Now, the job opportunity and its details are communicated to the organization’s current employees. This is generally done via emails, messages, or simple verbal communication in the office.
4. It Encourages Applications
Once the need is communicated, existing employees of the organization who are interested in the role apply for the position. They submit their resumes and fill out the application form to express their interest.
5. Applicants Are Screened
Now, the HR evaluates all the applications and calls in every candidate for screening. This typically involves taking interviews, skill tests, etc., to understand how well an applicant’s expertise aligns with the job role.
6. The Final Hiring Decision Is Made
Finally, once all the applicants are screened, HR takes the final call and selects the employee that best suits the role. They make an official offer to that employee and discuss salary, responsibilities, etc.
5 Stellar Advantages of Internal Recruitment
Still on the fence about recruiting employees internally? Consider these five advantages of internal sources of recruitment:
Enhances Cost-Effectiveness
Hiring employees from external sources like recruitment agencies or headhunting platforms is not just cumbersome. The cost implications involved in the process are also pretty high. You must pay for the agency’s services and sometimes a set-up fee too.
Internal recruitment eliminates this need. Apart from basic overhead expenses, there are no significant costs involved in hiring an employee from within the organization. So, it’s a much more cost-efficient option.
Boosts Employee Motivation
A satisfied employee is one of the biggest assets for a company—and we’re backed by data here. According to research, motivated employees:
- Work 20% better, increasing productivity and profits
- Are 87% less likely to resign from the company they work for
These are just two instances. There are many other benefits of keeping employees engaged and motivated. Fortunately, internal recruitment is a great way to do that. Since it recognizes an employee’s hard work and provides appropriate career growth opportunities for them, it tends to act as a catalyst for their motivation.
Facilitates Talent Retention
In this cut-throat business environment, creating a skilled workforce is an effective way to excel compared to your competitors. If the employees in your organization are not competent, no amount of tech upgrades or marketing can help you grow. However, finding talented individuals with the right skills in this job market is difficult, if not dreadful.
To avoid this, seasoned hiring managers turn to internal recruitment. It not only ensures you retain the most skilled employees of your organization. In doing so, it also boosts their loyalty, reducing their likelihood of joining your competitors.
Accelerates Hiring
External hiring is a lengthy process consisting of several steps, like posting the job description, waiting for applications, interviewing applicants, and so on. Statistically speaking, it takes approximately 41 days to fill up a job vacancy. However, if the role is complex and requires deep technical expertise, filing the vacancy may take even longer.
On the contrary, internal recruitment is much faster. Although an HR representative has to follow the same procedure, filling the vacancy usually takes a lot less time because everything is done within the organization.
Mitigates Risk
One of the most significant risks associated with external recruitment is hiring the wrong candidate. If the hiring manager is not meticulous in vetting applicants, they may recruit someone incompetent. This tends to have several repercussions, spanning cost, profitability, growth, innovation, and whatnot.
However, internal recruitment prevents this. Recruiting employees who are accustomed to the organization’s requirements, goals, and culture ensures you hire someone who’s the best fit.
5 Lesser-Known Disadvantages of Internal Recruitment
Despite being an incredible method for hiring, internal recruitment is not free of cons. Here are five of its disadvantages:
Limits the Talent Pool
In the case of internal recruitment, you are bound to hire someone from within your current workforce. This can be limiting. If you are hiring for a role requiring niche expertise, this limited talent pool may fail to fulfill the requirement.
Creates New Vacancies
Internal recruitment methods like promotions and transfers involve shifting an existing employee from one job role to another. This creates a ripple effect since you must fill the position vacated by the employee internally recruited to a new position.
Encourages Bias and Favoritism
Internal recruitment can be susceptible to issues such as bias and favoritism. Hiring managers might offer new roles to employees they have a good rapport with, which can negatively impact the morale of other employees and the overall work environment.
Fosters Stagnation
Constant innovation is one of the key requirements for any business’s growth. However, this may be adversely affected if a company recruits employees internally. Without new individuals, cultivating fresh ideas and perspectives will eventually be challenging, leading to stagnation.
Causes Employee Resentment
Employees not selected for the new position in the organization may feel dissatisfied with the work. They may even start feeling jealous of the employee selected for the new position. This can create tension in the organization and negatively affect employee morale.
Strategies to Develop an Internal Recruitment Process in Your Organization
Having reviewed the advantages and disadvantages of internal recruitment, here are some tips to help you build a robust framework for hiring employees from within your organization:
Define the Role and Its Requirements
Sometimes, capable employees hesitate to apply for internal recruitment opportunities because they believe they lack the necessary qualifications or skills. To avoid this, clearly define the position’s requirements.
Craft a detailed job description that highlights key qualifications, knowledge, skills, experience, and the ideal candidate profile to attract the most suitable internal applicants.
Maintain Transparency
Since bias and favoritism are two of the main deterrents to effective internal hiring, avoid them by assuring maximum transparency throughout the process. Implement an internal job board or communication system to ensure open positions are visible to all and promote equal opportunities.
Develop a Structured Selection Process
Maintaining fairness in selection is another critical feat in internal recruitment. So, standardize your internal recruitment process. Define guidelines for application and selection to ensure consistency and equity within the organization.
Set Certain Hiring Criteria
Minimize the likelihood of employee resentment by setting criteria for internal hiring. Especially when it comes to promotions, establish metrics that highlight aspects based on which the opportunity is awarded to an employee.
📜 Suggested Read: Build an Effective Recruitment Strategy with 10 Proven Tactics
Wrapping Up
Internal recruitment is an incredible way to fill job vacancies in an organization. With a plethora of benefits, it ensures you align the right person with the right job.
However, internal recruitment also has its fair share of drawbacks. To make the most of internal recruitment, carefully evaluate your hiring needs and implement a strong process. This way, it’s possible to ensure seamless and effective internal hiring.
In this regard, you can check out PeopleStrong. An all-inclusive SaaS platform, PeopleStrong’s innovative AI-powered recruitment software lets you identify and track the right talent, streamline your internal hiring process, provide metrics for data-backed hiring decisions, and much more!
So, hurry up—get in touch today!
