What Are the Nine Major Advantages of Internal Recruitment?

What is Internal Recruitment?

Internal recruitment is a strategic process wherein an organization fills its vacant positions by considering current employees. These could be individuals seeking a promotion, an employee from a different department looking for a change, or even someone interested in part-time roles that recently opened. 

Rather than casting a wide net externally to attract applicants, companies turn inwards, tapping into their existing talent pool. Primarily, internal recruitment promotes the utilization and advancement of existing talent within the organization. It encourages employees to grow, nurtures loyalty, and ensures continuity of company culture.

Nine Advantages of Internal Recruitment

Internal recruitment provides a host of benefits to companies, making it an attractive strategy for many. Let's delve into some of these advantages that make internal recruitment a compelling approach:

1. Promotes Employee Engagement and Retention

By offering opportunities for growth and advancement to current employees, internal recruitment bolsters morale and motivation. Over 80% of talent professionals agree that internal recruiting improves retention. It sends a clear message to the team that the organization values their contributions and is committed to their career development. This increases job satisfaction, employee engagement, and ultimately, retention rates.

2. Saves Time and Resources

External hiring can be a time-consuming and expensive process. It involves advertising, screening, interviewing a wide array of candidates, and lengthy onboarding. Internal recruitment, on the other hand, significantly reduces these time and cost elements, as the company already has access to the candidates' work history, skills, and performance levels. Over 60% of talent professionals say that using internal recruitment can accelerate the hiring process.

3. Shortens Onboarding Time

Internal recruits have already been through training and onboarding for your organization, and they’re aware of company policies and team workflows. This familiarity dramatically reduces the onboarding time compared to external recruits, allowing the newly promoted or transferred employees to hit the ground running in their new roles. The shorter onboarding process not only saves time but also allows for quicker productivity.

4. Boosts Knowledge Continuity

Internal recruits are familiar with the organization’s policies, systems, and procedures. This familiarity leads to quicker transitions, minimal training requirements, and preserves the institutional knowledge, fostering efficiency and continuity within the organization.

5. Enhances Employer Brand

An organization known for providing growth opportunities to its employees is perceived positively in the job market. This reputation can improve the employer brand, making the company more attractive to high-quality external candidates in the future.

6. Lower Risk

Compared to external recruitment, internal recruitment often carries a lower risk. The organization has a detailed, firsthand understanding of the candidate's skills, work ethics, and overall performance. This information significantly reduces the likelihood of selecting an unsuitable candidate.

7. Encourages Skill Development

When employees see that there are opportunities for career progression within the organization, they are often motivated to learn new skills and take on additional responsibilities. This proactive upskilling can lead to an overall improvement in the talent base of the organization.

8. Enhances Succession Planning

Internal recruitment serves as an effective method for succession planning. By identifying and grooming employees for future leadership roles, organizations can ensure a smooth transition and continuity when key employees retire or leave.

9. Strengthens Team Morale

When employees see their colleagues moving up within the organization, it can boost overall team morale. Over a quarter of employees who voluntarily resigned from jobs in 2022 did so because there were few opportunities for advancement or growth, according to Forbes. But internal mobility provides those opportunities, not just for individuals but for the entire team. It provides a sense of optimism and assurance that hard work is recognized and rewarded, fostering a positive work environment. 

Six Disadvantages of Internal Recruitment to Know

While internal recruitment offers many advantages, it's not without its drawbacks. It's essential to weigh these disadvantages before implementing an internal recruitment strategy:

1. Limited Pool of Candidates

By its nature, internal recruitment restricts the talent pool to existing employees. This limitation can hinder the organization's ability to infuse fresh perspectives or new skills that could be available in the external job market.

2. Risk of Stifled Innovation

If an organization solely relies on internal recruitment, there's a risk of organizational inbreeding. This term refers to the situation where the company's ideas and practices become homogeneous, stifling innovation and adaptability.

3. Vacancy Chain

When an internal candidate is promoted, it creates another vacancy in their previous position. Unless there's a robust internal pipeline at all levels, this can lead to a recurring cycle of unfilled positions within the organization.

4. Potential for Bias

Internal recruitment could potentially result in biased hiring decisions. Personal relationships within the organization can unduly influence promotions, leading to perceived favoritism and discontent among the workforce.

5. Overlooking Skill Gaps

There can be a tendency to overlook skill gaps or training needs with internal hires. Since these employees are familiar, they might not spend as much time working on gaps in their skillset, which could potentially hinder their future performance or growth.

6. Slower Adaptation to Industry Changes

Organizations that predominantly use internal recruitment might find it challenging to adapt to evolving industry trends and standards. Without bringing in external candidates, there tends to be less infusion of current practices or fresh ideas from outside sources.

How to Set Up an Internal Recruitment Program

Creating an effective internal recruitment program requires careful planning and implementation. Here are key steps you can follow to build a successful program:

1. Create clear job descriptions and career paths: Straightforward job descriptions and well-defined career paths for all roles are foundational. These should include responsibilities, necessary skills, and opportunities for advancement. Employees can then identify potential growth areas and align their personal development goals with these opportunities.
2. Implement a skill development program: A comprehensive skill development program is crucial for preparing employees for future roles. This could include workshops, online courses, mentoring, or job rotation experiences. Providing avenues for skill enhancement ensures your employees are equipped to take on new roles when they arise.
3. Establish a transparent application process: Transparency is crucial to avoid perceived favoritism or bias. Clearly communicate the process of applying for internal positions and ensure it's consistently applied. This includes the application process, selection criteria, and timelines for decision-making.
4. Offer constructive feedback: Not all internal applicants will be successful in securing a new role. It's essential to provide constructive feedback to these employees, helping them understand what they can improve or work on for future opportunities. This approach fosters continued learning and development.
5. Balance internal and external hiring: Finally, while having a robust internal recruitment program is advantageous, it's crucial to balance this with external hiring. Bringing in external talent can inject new ideas, perspectives, and skills into your organization, enhancing its overall capabilities and adaptability.

It’s helpful to think about the purpose of your internal recruitment program as less about filling vacancies but about cultivating a culture that values growth, development, and talent retention. 

Enhance Flexibility and Morale Through a Wellbeing Strategy

Internal hiring is great for your workforce because it offers employees the chance to develop in their careers and move up in your organizations. Many employees value this type of flexibility and growth professionally — and you don’t need to limit this to career development.

By investing in employee wellbeing, you can find other ways to offer these perks to your workforce. You might consider offering flexible scheduling or a hybrid work environment, so that employees can focus on their individual needs or goals. Or you can offer health education classes, such as around nutrition or fitness, to encourage personal growth around wellbeing.

No matter how you choose to do it, there’s no denying that wellbeing programs have a positive impact on employee retention and productivity — just like internal mobility. Find out how you can add to your own wellness offerings by speaking to one of our Wellbeing Specialists today!