Look Inwards: How to Build an Effective Internal Recruiting Strategy

BY -

Evelyn Duskey

October 1, 2020

A new position has opened up, and you have 2 options: either hire from the outside or look inside your organization for your next star player. The latter is a practice known as internal recruitment, and according to the Harvard Business Review, is only considered “an important source of people to fill vacancies” by 28% of talent acquisition leaders today — to the detriment of many organizations. 

External recruiting, after all, is costly. And according to the same HBR report, outside hires take three years to perform as well as internal hires in the same job. Whether internal hiring takes the form of promotions, transfers, or the moving of temporary employees to full-time positions, organizations that determine different ways to successfully implement an internal recruitment process fill vacant positions in less time for a lower cost.

Benefits of Internal Recruitment

The advantages of internal recruitment should come as no surprise to the seasoned HR professional. After all, your existing employees have already been vetted and hired by your recruitment team (or third-party recruiter) and withstood the test of time. Hiring from inside brings with it a certain level of surface-level confidence. But let’s dig deeper.

Reduced Time to Hire

External recruitment is a time-consuming and costly process, from posting on external job boards and social media pushes to the meat and potatoes of the actual candidate interview and evaluation cycle. With candidates that are already part of your organization, you get to entirely skip this step. 

In addition, you have the advantage of thorough insight into your potential new hire’s work history, from current salary to past performance reviews and background checks. This makes finding the right fit for the position, from culture to experience level a faster, and more seamless process than starting with hires outside the organization. 

A hand carefully saving his time in a piggy bank

Shortened Onboarding Times

Successful onboarding is both important and rare. Only 12% of employees think their organization does a great job with onboarding, yet those with a strong onboarding process enjoy 82% higher hire retention and 70% more productivity from their employees. This is all to say: if your current employees have made it through your organization’s onboarding process and stuck around, it’s no small achievement. Not only will you save the time of completing tedious paperwork, explaining the basic functions of your healthcare or payroll, or setting expectations, but you’re also ensuring a greater level of comfort for both the “new” hire entering the role and their hiring manager.

As an existing employee, they’ve already navigated your company culture and made connections. Even if this new role is entirely unlike their current one, this established comfort level will ease the transition, and their knowledge of the company will help them understand how the role fits into the larger picture of the business. 

Decreased Hiring Costs

As previously mentioned, hiring is expensive, and onboarding is time-consuming. By reducing and/or eliminating both, your organization saves money. From external recruiters and attending job fairs to the initial training and onboarding of fresh faces, the cost of external hiring adds up quickly. 

Enhanced Employee Engagement

When an organization announces the decision to hire internally, they’re sending a clear message to their existing employees: we see your potential. Internal hiring means that an organization actively seeks to enable career growth, and not just allow employees to perfunctorily perform the duties of a role for a few years before moving on. This fosters the positivity and trust in a workplace that will gain an organization a loyal workforce over time. And not only will your employees think more highly of you, they’ll speak more highly about you to those outside the organization, paving the way for better hires down the road.

Disadvantages of Internal Recruitment

With all of these benefits, you might be asking “why wouldn’t I hire internally?” Well, there are few potential drawbacks to keep in mind when it comes to hiring from within: 

  1. Limited applicant pool: Not every role can be sourced from within your company. If you’re expanding into new areas or industries, it’s likely that your existing employees won’t have the skills or experience necessary. 
  2. Team tension: It’s not just the resentment of passed-over team members you’ll have to contend with. Managers often want to hold onto the star players that are considered for internal recruitment, sometimes to the point of hindering the recruitment process
  3. Possible short staffing: Sometimes you’ll find the perfect internal candidate on an already understaffed team, meaning that you’ll have to result to external hires or further internal recruitment to fill in the gap. 
  4. Stagnation: If you overuse internal recruitment, you miss the opportunity to recruit new talent and fresh ideas from new talent pools into your organization.

An office manager smiling as an employee happily shows his skills on a computer

Implementing an Internal Recruitment Strategy

Having clearly established the advantages and drawbacks of recruiting internally, let’s take our attention to its actual execution. While you’ll want to have a somewhat established process (or at least a few key steps — which we’ll get to in a moment), it’s important to recognize that there is no one-size-fits-all method for internal recruitment due to a variety of reasons. From pre-existing team dynamics that differ from team to team, to the technical or experience level required for a position, the complexities of internal recruitment means that your process needs to have a degree of built-in flexibility for it to function.  

But a good process is still a solid starting point. Before you begin looking for internal hires, take the time to craft an internal hiring policy that determines the following:

  • Basic candidate requirements, such as “must have already completed 6 months in their current position” for example.
  • Who writes the job posting description and who makes the hiring decisions (usually the hiring manager, with the assistance of human resources or in-house recruiters if your company has them), along with any additional approvals.
  • Realistic transitioning, onboarding and training expectations that have a clear timeline outlining how a candidate will handover responsibilities to their team before changing positions.
  • Best practices for publishing and sharing of open positions, whether via email, internal newsletters, organizational social media, or one-to-ones with managers.
  • How the hiring process will be tracked, preferably via an ATS
  • A thorough screening process — internal candidates should be held to the same standards as external.
  • A quality declination process — make sure to provide your employees with quality feedback as to why they didn’t get the position to ensure that they feel thoughtfully considered, and even offer tips to improve their application for the future if appropriate.

A hiring manager sitting at a table with two prospective internal hires

In addition to adhering to a general, pre-arranged process, here are a few general tips to make sure you avoid the common pitfalls of internal recruitment:

  1. Be as transparent as possible: Always clearly communicate the requirements and expectations of an open role, as well as the reasoning behind the final hiring decision. If you already have someone in mind for a particular position, don’t announce it publicly - it will just lead to frustrated candidates. 
  2. Provide alternate avenues for internal mobility: demonstrate that you’re committed to employee growth, even when it doesn’t lead to immediate benefit for the organization. Employees should feel challenged, motivated, and recognized for their efforts.
  3. Train for smart succession: Leaders should always be on the lookout for great internal candidates, and have a “succession plan” in place for their eventual departure/promotion. Train upper management in how to look for these individuals, and regularly check-in with managers that they have updated succession plans in place.
  4. Leverage the right ATS: Hiring, whether internal or external, is always complex. A good ATS will help keep your recruitment process as smooth as possible.

If your organization isn’t taking advantage of the full potential of internal recruitment, begin changing that today by taking a look at our top-rated recruitment software.

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