Complete Guide to Internal Recruiting

The Following is a Guest Post From Newton Software

What is Internal Recruitment?

As many employers already know, internal recruitment is the process of looking within the ranks of the current workforce for a suitable candidate to promote to a new or currently open position.

This process stands in stark contrast to external recruiting, which involves going outside the company to find the perfect candidate.

Which is better?

It depends: both internal hiring and external hiring have their advantages and disadvantages, so simply declaring a winner between internal vs. external recruitment would be disingenuous.

As such, there’s a lot to learn about internal hiring practices, and to lend a hand, our writers at Newton Software have put together this great article that explains everything there is to know about internal recruiting, it’s advantages and disadvantages, how it’s used, and how to do it correctly.  

Types of Internal Recruiting

There are several methods by which a company can utilize internal recruitment to fill a hiring need, some of which are listed below:

  • Promotions
  • Transfers
  • Internal Advertisement
  • Freelance to Full-Time Employee
  • Retired Employees made Freelancers or Part-Time Workers
  • Employee Referrals

Of these methods, a standard promotion is likely something that most of us are already familiar with; however, internal recruitment also entails taking a good look at any freelancers currently on the payroll, transfers from other departments, and even reaching out to ex-employees who might be enticed to come back part-time.

Advantages

Internal recruitment has several key advantages over other forms of hiring, which include items such as efficiency and cost, continuity of operations, and an improved company culture.

Efficiency & Cost

Above all else, efficiency is one of the most valuable aspects of recruiting from within.

By recruiting from within, you’re almost always dealing with a smaller pool of candidates, which should help the process of identifying desirable skill sets, characteristics, and proficiencies much quicker.

Internal recruiting will also cut down on the amount of paperwork you’ll need to fill out, as all that is usually needed is a few forms submitted to HR that tells them of the title change.

Additionally, internal recruiting can save your company a great deal of cash, as many companies resort to hiring external recruiting firms to manage their hiring efforts.

Continuity of Operations

Another key advantage to internal recruiting is continuity.

When a company looks internally to fill an open position, the individual selected is likely to carry few surprises, especially if the individual has been with the company for a few years and is already well acquainted with how the company handles day to day operations.

This means that as an employer, you pretty much know what you’re going to get out of the individual once they’re promoted; however, with external hiring, there is no way to guarantee that the candidate will be a good fit for the company until they are actually in the workplace.

When a candidate is brought in and fails to handle the responsibilities of the role, a company’s entire operation might come to a screeching halt, resulting in a loss of productivity, revenue, and company morale.

Therefore, with the right internal recruit, companies can avoid rolling the dice with a new employee who may not live up to expectations.

Improved Company Culture

Finally, hiring from within can help improve company culture and morale: when an internal employee is promoted to a new position, it lets everyone know that they too can move upwards in the company if they’re willing to put the work in.  

No one wants to start over at a new company and get acquainted with a whole new team just for a pay raise; however, people are hopping from one job to another more frequently than ever before for that exact reason.

As such, if you’re a company who’s looking to improve its employee retention rate, internal recruitment could be just the thing to give your company a spark of positivity.

Disadvantages

While the advantages of internal recruitment are plentiful, employers must remember that internal hiring also carries with it some important disadvantages; after all, if internal recruitment didn’t have any disadvantages, every company on the planet would promote from within whenever they had a hiring need.

Stagnation

All workplaces are an ecosystem of sorts, that, when healthy, produce a wealth of new and exciting ideas by which new products and services can be developed.

However, ecosystems can grow stale if new ideas and methodologies are not brought in on a consistent basis. This is why business owners must ensure that their workplaces foster creativity and open discussions, as these two elements are often the basis for innovation.

Unfortunately, this stagnation of ideas is a real threat when it comes to internal recruitment: by promoting from within, you’re limiting your company’s access to outside knowledge and information, and instead, are recycling ideas and skill sets that your company already possesses.

Of course, this isn’t necessarily true in all cases, but companies should be aware that by recruiting only from within, there is a real chance that the company will be put at a competitive disadvantage that will be difficult to overcome down the road.

Lack of Diversity

Tying in closely with stagnation is diversity.

Our perspective is something that is closely tied to our gender, age, and ethnicity, and by only promoting from within, it’s possible that a company might become too homogenous, which can stifle the flow of new ideas.

To get the innovation machine rolling, a company must get creative with their hiring practices and bring in candidates with different kinds of backgrounds.

This advantage in innovation that diversity brings has been studied by multiple researchers, and it is something that companies who only hire from within are at great risk of losing.

Resentment Between Employees

Resentment in the workplace is unavoidable: if an employee feels they are entitled to a promotion and they don’t receive it, they’re going to have a negative response.

However, with internal recruitment, this negative response could be even greater.

These issues won’t be contained to just the employees up for promotion, as a matter of fact, these sorts of issues can affect the entire company.  

An employee who feels they’ve been cheated out of a well-deserved promotion will take their complaints to anyone and everyone who will listen, spreading poisonous ideas like management incompetence and favoritism, which is never a good thing.  

When to Recruit from Within

Knowing when to recruit from within isn’t necessarily difficult to determine, as most companies will almost always look internally first before deciding to hire outside the company.

The issue here is whether hiring from within is worth it versus hiring externally.

For example, while there might be an ideal candidate currently residing in your workforce, that candidate still might not have the experience to hit the ground running once they’ve been promoted. As a result, the company will have to spend resources training the employee to get them up to speed, which means that there will undoubtedly be a learning curve of some sort where mistakes are likely to be made.

Unfortunately, some companies simply do not have the time or resources to train a qualified candidate for the responsibilities of a new position. Reaching outside the company would be a preferable option as they could simply hire someone who can operate at a more senior level.

Therefore, while internal recruitment is something that should always be considered, employers must be acutely aware of whether the company is set up in a manner that allows for this hiring practice.  

Internal Recruitment Methods: How to Recruit from Within Your Own Company

Now that we understand the advantages and disadvantages of internal recruitment and when to use it, let’s look at some recommended steps on how to successfully recruit from within.  

Design an Internal Hiring Process

As with all company-wide endeavors, it’s best to have a defined process and plan by which everyone involved can refer to when necessary.

This plan should include things like who will be involved in the internal recruitment process, what kind of resources will be allocated towards an internal recruitment effort, and all contingency plans for when an internal recruitment campaign yields poor results.

Additionally, when enacting an internal recruitment plan, it would be beneficial to try and stick to the same plan every time, this will speed along the process of refining your company’s internal recruitment procedure.

Keep Accurate Records

For a company to accurately assess the pool of talent currently residing in their workforce, accurate records, like performance reviews, will need to be kept and updated regularly.

While many managers may think that they can simply fire from the hip and go by “feel” when it comes to internal recruitment, this sort of behavior will often yield both poor results and contempt from other employees.

By keeping accurate records, all internal promotions can be justified and explained quickly, which should help alleviate concerned individuals in the workforce.

Additionally, accurate and up to date records will allow employers to acquire some perspective on both the quality and consistency of an employee’s performance at work, which will translate when they’re promoted to a new position.  

Develop a Job Posting System

Often overlooked in many companies is developing a job posting system.

In short, your employees can’t compete for an open position if they’re unaware that it even exists. As such, it’s important that your company develops a job posting system as part of its internal recruitment process; otherwise, it will be difficult to engage employees and find out if they have the talent and skill set needed for the open position.  

Encourage Employee Engagement

Speaking of engagement, it’s important that employers keep their workforce motivated so that they have an interest in getting promoted.

Employers need to “sell” their workforce on the idea of upward movement within the company, if they don’t employees will feel as if their company is not all that invested in their personal success.  

This means that along with creating a job posting system, employers need to develop a plan for verbally communicating the that there are opportunities for employees to move up in the company, helping to speed up the internal recruitment process.

Screening Employees

Once you have your pool of potential candidates, a screening process will need to be developed so each candidate can be evaluated quickly and accurately.   

Just like hiring a brand-new candidate, it’s important that this screening process is consistent with the responsibilities of the position. For example, if your company desperately needs a Lead Software Developer and you’re looking to recruit from within, all potential candidates should be given the same evaluation and asked the same questions, as this will help employers form a baseline by which all candidates can be evaluated.

Provide Positive & Constructive Feedback

Once the candidates have finished the screening process, it’s important that employers find the time to provide some positive and constructive feedback to the candidates.

This is especially important with internal recruitment because, after the screening process, these candidates are still employees of the company.

Therefore, it’s in the company’s best interest to provide constructive feedback to candidates who were not promoted so that they can better position themselves for when another promotion opportunity arises.

If a company decides not to provide this constructive feedback, then we run into one of the major disadvantages of internal recruitment that we discussed earlier: resentment.

Promote!

Finally, after it’s all said and done, it’s time to make the promotion decision.

Just like hiring a new employee, promotion decisions should be made based on the overall strength of the candidate and whether the company possesses the resources to onboard he or she into their new role.

Newton Software is a modern, easy-to-use applicant tracking system designed to organize and improve internal recruiting. Newton features best-of-breed dashboards that create unparalleled visibility and transparency. And, Newton is the only ATS designed to drive the decisions that drive hiring taking into account all users in the recruiting workflow. Industry leading adoption rates (+90%) ensure easy collaboration. While powerful performance driven metrics and functionality ensure HR and recruiting users are in control.

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