Internal Recruitment: Advantages And Challenges To Consider
Job openings in businesses often put in motion recruitment processes that can last from a few weeks to several months. But is it possible to shorten the time required to find a suitable replacement by recruiting within your company? The truth is that many organizations take this route when it comes to hiring for several reasons, including reduced costs, shorter onboarding, and a higher likelihood of retaining high-performing and motivated employees. These are only some of the benefits of internal recruitment that make it a popular choice among companies. In this article, we will not only explore the advantages but also the challenges that might lead you to opt for external recruitment in some cases.
Types Of Internal Recruitment
When we talk about internal recruitment, we refer to the process of filling open positions with current employees of the organization. This process often makes things easier for the HR department, as they already have access to these resumes and can easily see whether an employee from one department may be better suited for another. Recruiting internally can occur in various ways, the most common ones being:
- Transfer – This can involve a transfer from one department to another or a relocation. Transfers are typically lateral moves, meaning that employees move to positions that are at the same rank as their current jobs. Consequently, they often don’t come with a salary increase.
- Promotion – Possibly the most common type of internal recruitment, promotions allow talented employees to advance to higher positions that come with more responsibility and a higher status and compensation.
- Rehiring – When a position opens, companies sometimes contact former employees. Although these individuals are not currently employed by the organization, they are still familiar with internal policies and practices, thus minimizing the time it takes to onboard them.
- Referrals – In this case, although you are not hiring from within the organization, you are finding applicants using the suggestions of trusted employees. This method works because employees understand how the company works and will, therefore, refer candidates who will be a good fit.
- Previous applicants – Companies often “click” with candidates but end up not hiring them for one reason or another. These applications are retained for some time and can be revisited when a new position becomes available. Since these individuals have already gone through the vetting and interview stages, contacting them is much more efficient than launching a new recruitment process.
4 Benefits Of Internal Recruitment
1. Streamlines The Hiring Process
A complete recruitment process involves multiple stages, such as drafting a job description, vetting different resumes, evaluating candidates, and conducting multiple interviews. Then, and only if a good fit is found, you can proceed with hiring them and initiating onboarding. These steps add up to a significant amount of time for a company. With internal recruitment, you can skip the majority of them. You are already choosing from a pool of professionals who are a good fit for your company and have a proven track record of success. As a result, the time to hire is sliced down, allowing you to quickly fill the vacant position.
2. Reduces Recruitment Expenses
Recruitment doesn’t only take time; it also costs a lot of money. Only some of the costs associated with recruitment involve fees to promote your job advertisement and subscribe to professional websites, additional work hours that the HR department spends on the recruitment stages described above, as well as the necessary equipment for newcomers. Not to mention that hiring externally increases your headcount and, in turn, employee-related expenses. Therefore, an essential benefit of internal recruitment for a new position is that it limits most of these expenses, making this recruitment method a great choice for businesses with tight budgets.
3. Leads To Faster Onboarding
Onboarding is an essential part of a new employee’s hiring journey. Through this process, organizations ensure that their latest addition has the necessary skills, tools, and knowledge to take on their new role successfully. However, effective onboarding takes time, which not everyone can afford. Sometimes, organizations need certain positions filled as quickly as possible to maintain productivity. In these cases, recruiting someone who already knows and understands the practices and processes of your organization can be very beneficial. Specifically, it guarantees that they will need significantly less training to be able to perform at a satisfactory level, as they may already be familiar with the nature and responsibilities of their new role.
4. Increases Employee Engagement
The final benefit of internal recruitment you need to remember is that it keeps your employees happy and engaged. Hiring within your company when a position opens up instead of immediately launching an external recruitment process can send a strong message. It lets employees know that you appreciate them and their hard work and are willing to help them advance their careers and grow within your organization. This is especially true for higher-ranking positions, although same-level positions may allow them to explore different interests and skills. In general, employees who see a future full of growth and advancement are more likely to be productive and engaged.
Challenges Of Internal Recruitment
Despite its many benefits, not everything about internal recruitment is positive. In fact, there are quite a few reasons that might drive you to select external instead of internal recruitment.
Firstly, hiring internally limits your applicant pool. Although your employees are skilled and talented, that doesn’t necessarily mean they are a good fit for any open role. Hiring someone new might give you access to the exact skillset that your company needs. Another challenge is the aftermath of an internal hire. Other employees may believe that the transfer or promotion was not deserved, causing resentment and negativity. Moreover, some managers may be upset about losing a valuable team member and having to cover the gap they left behind.
Earlier, we mentioned that internal recruitment can protect your company’s culture by preventing the introduction of new people who may not be a good cultural fit. But you need to be careful not to create an echo chamber. Relying heavily on internal recruitment practices may result in a stagnant culture that lacks new perspectives, opinions, and ideas. It’s important for new people to enter your organization to offer a new perspective on things, drive innovation, and perhaps shed light on potential issues or problematic practices that long-time employees may have grown “immune” to.
Conclusion
Hiring is a complicated process that can become easier when you opt for internal recruitment. This approach can help talented employees within your organization grow and advance their careers while helping you reduce recruiting costs and fill vacant positions quickly. While the benefits of internal recruitment are multiple—hence, it is a popular practice among organizations—there are also challenges to consider. Don’t rely heavily on this method but make sure to prevent knowledge gaps, resentment, and a lack of innovation within your organization.