What Is Internal Recruitment? 5 Ways to Save Time and Money While Hiring
What is internal recruitment?
Internal recruitment occurs when a company looks at existing employees to fill open roles within the organization.
In 2023, BambooHR surveyed 1,500 U.S. employees about their job prospects—and shockingly, we found that nearly 1 in 5 think about quitting their current job on a weekly basis. In fact, 1 in 10 are so unhappy that they consider quitting daily.
Within companies just like yours, plenty of employees are qualified and ready to seek new challenges. They're just waiting for the right opportunity to come along.
Internal recruitment is an oft-overlooked aspect of hiring—and yet, hiring from within is a great way to save time and money. Most importantly, internal recruiting shows your employees that you value them and are actively looking for ways to help them advance their careers.
Failing to capitalize on internal recruitment can result in good, qualified people slipping right through your fingers while you struggle to attract and onboard someone else. To better understand the ins and outs of internal recruitment, keep reading.
What Is Internal Recruitment?
Internal recruitment is the process of hiring someone from within your existing business structure to fill a vacant position for your company.
Some of the main types of internal recruitment include:
- Employee referrals
- Moving temporary employees to full-time positions
Setting up a hiring system for internal candidates can make your job much easier and cut down on your time filling vacant positions.
External recruitment is the process of hiring people from external organizations to fill your vacancies. In some cases, this involves “headhunting,” or having recruiters directly reach out to qualified people. In others, it involves posting a job description and evaluating those who respond until you connect with the right candidate.
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How Does Internal Recruitment Work?
Internal recruitment may seem complicated, but it isn’t. It all comes down to knowing your in-house talent and understanding your employees' long-term aspirations.
While specific circumstances may vary between organizations, there are a few key principles that apply across the board. Before you pick your next hire, make sure you:
- Establish who will make hiring and job posting decisions.
- Outline a policy for how to post job positions.
- Create an internal recruitment policy.
- Use an Application Tracking System to keep track of candidates throughout the hiring process.
- Let employees know about open positions. This could be through email, internal newsletters, internal job boards, or chatting with managers.
- Provide details of the job description. Even if you hire internally you want to make sure you get the best applicants for the position.
- Screen candidates. Hold internal candidates to the same standard as external candidates.
- Promote employees fairly by maintaining transparency throughout the process.
- Provide feedback to applicants who didn’t get the job on what skills may help them qualify in the future. Don’t send them a generic rejection letter.
The 5 Biggest Advantages of Internal Recruitment
1. You Already Know Internal Candidates
Internal recruitment carries less risk. While you may never have seen the given employee doing that specific job before, you have seen that employee work within your organization. You have firsthand knowledge of how they perform, how they fit into the company culture, how they handle conflicts and problems, and so on, which means you can be confident in whom you’re hiring.
By contrast, external candidates for a job come with a significant amount of risk. Even when they come highly recommended from reliable sources, there’s still a chance that they’re not going to measure up, stick around, or fit the culture, and that can prove costly. Some experts claim that hiring a new employee can cost 2-3x that employee’s salary. Mis-hiring is a common—and expensive—problem, and many companies have higher turnover rates as a result.
Even the best interview questions or the most thorough reference checks can’t always solve this problem, as it’s hard to get a feel for how someone performs without actually putting them to work. In many situations, the only way to truly put their performance as an employee to the test is to give them the job and put them on the payroll. And if they don’t meet expectations, you have yourself a mis-hire.
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2. Internal Recruitment Reduces Hiring Costs
A major benefit of hiring internally is that not only do you avoid a lot of the cost and risk of a bad hire—but you also save on other costs during the onboarding processes.
Internal recruitment reduces cost because you don’t have to post—and pay for—ads on job boards, use resume databases to find employees, or pay for background checks on internal hires. Presumably, if your internal hires needed a background check, they should already have one.
Saving costs on sourcing your next employee and reducing your risk of losing them because they’re not a good cultural fit are all reduced by using internal recruiting for your next position.
» Read More: What's the True Cost of Onboarding?
3. Onboarding Internal Candidates Is Much Easier
Internal candidates already know whether or not they like the company—they’ve already decided whether or not it’s worth sticking around. That’s a big deal when 17% of new hires leave after the first month. If they’re applying for an internal position, it’s usually a sign that they’re willing to invest more career time into your organization. Otherwise, they would be applying for jobs elsewhere.
This means you’re less likely to have to replace them soon after hiring because the job, the team, or the organization wasn’t what they expected.
It also means you’ll spend less time on training and onboarding because the candidate is already familiar with some or all of the systems they’ll be using in their new position. (Note: We said less time on onboarding, not no time on onboarding. It’s still important to onboard your internal hires!)
4. Internal Recruitment Saves Time
Recruiting externally requires a great deal of searching. Putting lines in the water via different channels can be tedious and time-consuming. You may have to sift through dozens or even hundreds of applications, just to find a small handful of candidates that might fit. Or worse, you may not attract any applicants and therefore never find the right candidate.
In-house recruitment, however, can be much easier.
You can broadcast the open position to the whole company in minutes if you choose; then, interested employees know where to take their resume and information if they want to apply. While you may still see some unqualified candidates and have to do a little sifting, your options are usually far better, and the applications come in with much less effort.
5. Internal Recruitment Boosts Company Loyalty and Engagement
Most importantly, internal recruiting is crucial for morale and engagement.
Your employees want opportunities for growth, learning, and progress. As they continue to work for your organization, they will be looking for ways to move up—to increase their status, to better their pay, and to expand upon their current talents and responsibilities. Hiring from within your workforce is one way to provide such opportunities.
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