The hiring process can be exhaustive but it doesn't have to be. When you consider hiring from your current employee pool it slashes onboarding time in half. The easy access to their current manager means less time playing phone tag with references. 

Despite the benefits of internal recruitment, there are some disadvantages to relying on internal recruiting. 

In this guide, we'll cover the pros and cons of internal recruiting as well as some tips to help manage the recruitment process. You'll figure out everything you need to know before you complete your next hire.

Internal vs. External Recruiting

This hiring process relies on internal candidate applications rather than recruitment strategies. 

The internal candidate may self-promote within their current team or the open role may be on a new team with an unknown hiring manager.

External recruiting means sourcing qualified candidates from an outside talent pool. The hiring process may include posting job descriptions, hiring third party recruiters, or attending job fairs to attract niche talent.

Types of Internal Recruiting

There are many ways human resources make the most of the skillsets of the existing workforce.

  • Promotions: Promotions are a common method for internal recruiting. It involves moving current employees up in seniority. Often they know the existing team so it can make for a smooth transition.
  • Transfers: This involves lateral moves for existing employees who may have interests in other departments, locations, or teams. More often than not, this type of move doesn't translate to a promotion.
  • Internal job postings: This allows for open positions to be available to the existing workforce across the company. Internal candidates apply at their own discretion according to the job description.
  • Temp to perm status changes: This is when a freelancer who has worked for the company applies to be a full-time employee. Most contract employees will consider stability alone a promotion.
  • Employee referrals: A current employee refers an internal candidate or even ex-employee for an open job posting. This is often considered a safe bet for matching new hires to the workplace culture. 

Advantages To Internal Recruiting

The advantages of internal hires are clear. Most human resources teams prefer to hire from within. This saves time investing in external candidate screening and selection. Here are a few of the reasons why it's popular among talent acquisition teams.

You Make a Cheaper and Faster Hire

When qualified candidates pop up from internal talent pools it requires less work for the hiring team. Not having to spend budget on advertising, third party recruiters, and pre-employment screening saves a lot of coin. 

It often means less (if any) interviews too which can save the hiring manager's time.

It Makes Onboarding Easier

The internal hire is half-trained already — they're used to the work environment. Depending on whether they'll stay working with the same people, it can mean a shorter onboarding process. 

Also, internal candidates already have their technology set up. If you've ever had to set up a laptop on your first day of a job, you know how time-consuming it can be. Instead, internal candidates can jump into productivity faster and easier than external hires.

Good onboarding helps increase employee retention. Companies with internal mobility programs keep talent an average of 41% longer compared to companies without internal mobility programs, according to the 2020 LinkedIn Global Talent Survey

It Builds Employee Engagement

When employees have a clear career path it makes them feel connected to the purpose of their work. Current employees who are given promotions within the company feel taken care of and appreciated. This helps to build employee engagement.

You Create Stronger Company Culture 

When a higher number of employees stay within the company for longer periods of time it creates a strong company culture. It takes time for it to form and with every new hire the company culture experiences shifts. Sometimes this is beneficial and leads to fresh perspectives, other times not so much.

Disadvantages of Internal Recruitment 

The disadvantages of internal recruitment are worth noting. While it can save valuable time to recruit from your existing pool of candidates, there are a few trade-offs.

It Can Create Tension Between Team Members

It's normal that the team wants to see their colleagues promoted. Unless, of course, they were gunning for the same role. This can cause some tension between team members. 

A hiring manager who wants to hang onto their star employee may make it difficult for them to advance along on their career path to a new team. Needless to say, this can cause friction too.

It Limits the Talent Pool

It's easy to overlook the fact that with such an evolving workforce, internal candidates may not be the most qualified for new roles. Saving time and money is great but not at the cost of innovative ideas or fresh perspectives. External hiring allows opportunities to new grads too who bring some zest to the workplace.

It Creates a Lack of Diversity

A strong company culture could be a slippery slope into a homogeneous culture. Diversity makes for more effective problem-solving, greater innovation, and ultimately more profitable organizations. If you get stuck in your tunnel vision of hiring people who think like you, it limits diversity.

Overcome Internal Recruitment Challenges

The disadvantages of internal recruitment shouldn't deter you from promoting your qualified staff. Here are some helpful hints to promote a healthier approach to the process.

Strive To Provide Transparent Communication

Use all that time you saved in the initial hiring process to provide excellent interview feedback. Be clear with internal candidates on why they weren't hired for the open role. If they need more clarity, always make yourself available. You can easily find the right time to chat it through by using Prelude.

Prioritize Career Path Planning

If candidates express interest in an open role that's outside their scope, hiring managers should be encouraged to meet to discuss their career objectives. This helps enhance employee engagement. It also adds insight to performance reviews. They'll feel like it's leading them somewhere. 

Stay Mindful of Employee Morale

Employees may feel jaded if you've led them on for an internal position that they didn't end up receiving. Protect the delicate balance of team morale. It can be difficult to get it back if resentments are festering from poor communication. 

Change Up the Hiring Process

Be flexible with your hiring process. Allow for a balance between internal vs. external candidates and round out the recruitment methods. Use Prelude to manage complex scheduling seamlessly by involving only the most relevant parties. The platform easily and effectively enhances team productivity, which is another big challenge when hiring internally (and externally too).

If you’re struggling on whether to allocate more time to external recruitment, here are some indicators that you should look outside of your current staff:

  • The open role requires a niche or new skill set or language
  • The project requires an unbiased or fresh perspective 
  • Internal candidates aren't self-promoting for the open role
  • The internal role isn't an exciting move for the internal candidate
  • You finally have the time to onboard new hires
  • You're in startup mode
  • It's time for a shift in company culture

A Balanced Approach To Internal Recruiting Wins

Always strive for the "best candidate wins" mentality. Find your balance between speed, quality, and value when making the right hiring decisions.

Start offering existing talent opportunities to upskill with professional development funding to fill gaps. Employee engagement will go up while team members explore topics they're curious about. This may lead to better qualified internal hires later. 

In the meantime, post job descriptions internally and externally for each new job. This will give equal opportunity to job seekers and allow for the best candidate to win.