What Is Internal Recruiting & How to Leverage It at Your Company

How do we even begin to approach the problem of finding bright new talent for our businesses?

It is thought that up to 70% of applicants lie to some degree on their resumes. 79% of hiring managers spend less than 3 minutes reviewing the resumes that land on their desks. Companies often spend significant time and resources on external recruitment, overlooking potential candidates within their existing team.

Strengthening internal hiring practices and offering opportunities to existing staff can save the organization time and money while also increasing employee morale and engagement. While not every new job opening is suitable for internal candidates, many are. We get that recruitment sometimes makes it seem like you cannot see the wood for the trees. However, choosing to promote internal recruiting best practices can deliver a range of advantages to your company.

What Is Internal Mobility?

Internal recruitment is an internal mobility strategy for an organization to fill roles and/or talent gaps with candidates who already work for the business.

Many companies choose to look to external recruitment when they have job openings that need to be filled. However, the advantages of internal recruitment cannot be overlooked. If you already know that external candidates will not necessarily offer you the type of person who you think will really thrive in this role, you might want to look amongst your existing employees instead.

What are the main types of internal recruitment?

Just as you wouldn’t hire just any external candidate for a specific role, so you need to think carefully about who might step forward for an internal position. The main types of internal recruitment include:

Promotions

The most common type of internal hire tends to be a promotion. A successful candidate for promotion will move into a new role that will grant them additional responsibilities and potential supervision over junior colleagues. In return, they will often get a higher salary and more benefits than their previous role.

Transfers

A large company with multiple offices in different states or even worldwide can move their workers between these offices with relative ease. Some employees may also want to put in a transfer themselves if they wish to move to be closer to family or to support a partner or spouse with dreams or a new job in that city. Transfers don’t necessarily mean a promotion or a change in responsibility, but they might require an employee to switch teams and work with a new set of colleagues.

Temporary to permanent

Not every employee starts with a permanent contract. However, if they do decide to step up to a permanent contract, this could come with more rewards and more conditions of service, such as a greater notice period and a 401(k) plan.

Employee referrals

When senior management is considering internal recruitment, they will often ask for employee referrals. These can be for promotions, transfers, or even changes in contract as with temporary to permanent. Mentors and other managers can play a key role in referring employees to internal job adverts that might be a good fit, and they can also make referrals to hiring managers on behalf of employees.

Advantages of internal recruiting

Choosing to recruit internally over externally does carry some advantages. You have to consider the role you wish to fill and the pool of candidates that are available to fill it. Some of the key benefits of internal recruiting are:

The company knows the candidates—and vice versa

When hiring external candidates, you sit down with strangers and spend a good portion of the interview just trying to get a feel for them. Internal recruitment means you choose from your existing workforce, from people you already know. Hiring managers can ask managers and colleagues for referrals and insights more easily than with external applicants, and they might already have an impression of a specific candidate if they have worked with them on a prior project.

Since the candidates are current employees, they also have a clear understanding of the company culture and values. In choosing to apply for this position, they have demonstrated a commitment to the business and the employee value proposition offered by management. Rather than move on and find a new role, they want to advance within the company’s hierarchy.

Recruitment times are reduced

Creating external job adverts and posting them to relevant job boards can be very time-consuming. While LinkedIn and Indeed have always remained popular, there are now many industry-specific job boards where companies can list their openings. However, this results in a massive stack of applications that needs to be sorted. Though most applicants are likely to be unqualified, it will still take time to find the relevant ones, offer them interviews, conduct those interviews, and decide on a final candidate.

The internal hiring process has a much smaller pool of potential candidates, and so it will take less time to sift through applications.

Onboarding takes less time

A big part of onboarding is making sure that the new hire fits in well with their team and the company’s culture. This is the perfect time to introduce mentoring or make sure that they have a buddy to help them settle in when we are discussing external candidates, but internal ones have already gone through onboarding.

A small onboarding period is needed, as they will likely have a change in responsibilities, and they might benefit from a buddy in their new team if they have never worked with those colleagues before. However, the overall onboarding period should take a lot less time.

Internal candidates are more cost-effective

Recruitment isn’t just a lengthy process; it is also expensive. Hiring an external candidate can cost somewhere between $4000 and $20,000, and that figure doesn’t even include salary and benefits. While most job boards allow you to post your roles for free, getting more eyes on them and potentially netting more applicants will require a fee of some sort.

Internal recruitment might be handled by a part of your company’s internal communications and/or HRIS, so the platform already exists. You also don’t need to pay for background checks or resume databases or any of the other things you might need usually when recruiting externally. In short, recruiting internally might be more cost-effective than you imagined!

Hiring internally can lead to higher employee engagement

Internal recruitment frequently forms a key part of maintaining company morale and engagement. When creating their career maps, most employees imagine that they will be able to advance and gain promotions or new responsibilities in a couple of years.

If they don’t, they will inevitably begin to look elsewhere, and that will cost you, literally. Gallup’s State of the Global Workplace 2024 Report estimates that low engagement costs the global economy 9% of global GDP, or $8.9 trillion. You need to be able to offer your workforce options for them to change and grow if you want them to succeed. We all like variety and the opportunity to challenge ourselves with something new. Giving promotions and transfers will create that culture of trust that then leads to high engagement and motivation.

Tips for effective internal recruitment

You may have some form of internal hiring process already, but it might not get a lot of interest. Here are three of our tips for effective internal recruitment drives that employees actually want to engage with!

Be transparent

Honesty is always the best policy!

Be honest with employees about what the hiring processes look like. Will the company also be considering external hiring? Candidates should be able to know this before submitting their applications.

Hiring managers also need to lay out expectations for the role so they can be sure they are putting the right employee into the new role—even if the employee has already worked there for years. Clarity and honesty can really go a long way.

Invest in staff learning and well-being

It shouldn’t just be all about getting a promotion or moving to a new city. Employees need to have a wide range of opportunities in front of them beyond the potential to move up to leadership positions. Investing in employee well-being and development opportunities means that even those not dreaming of management can still gain useful skills that could help them in their role.

Plus, it can be great to point candidates towards if they are turned down for a role they applied for. External hires are given rejections, feedback, and then part ways with the company. Internal candidates can be given their rejection and feedback, then assigned a mentor and a learning plan to help better their candidacy. When a similar job opening appears in the future, the candidate can reapply with renewed confidence and new skills and experience to back them up!

Create specific internal job boards

Employees should not have to apply through the same portals as external talent. Hiring teams need to create their own internal recruitment job boards.

These are especially useful for positions that will only be for current employees. There is absolutely no point in creating a job post on a site like Indeed if external applicants can’t apply, and a company-wide email detailing open positions can just get lost in inboxes.

What are the disadvantages of internal recruitment?

Just for balance, we thought we’d take a look at a few of the drawbacks of internal recruitment. While it is a great way to recognize the talent you have amongst your ranks, internal candidates might not always be the best fit for a role. Sometimes, an external candidate might be the right option, so weigh up the pros and cons carefully before you decide which path suits the company.

Some of the most common disadvantages of internal recruitment are:

You can be left with gaps in your workforce

When one employee moves up to a new role, they can end up leaving a hole behind them that you might have to fill with additional recruitment. This, in turn, can cause disruptions to operations until the unbalance can be addressed.

You don’t gain fresh perspectives

A diverse company is a high-performing company; research consistently shows us this. While recruiting internally does give you the benefit of a new mind in that particular position, the existing employee might not be bringing much to the table in terms of a fresh perspective for the whole company. You will only get this if you choose to hire externally, even if your company has a robust DEIB policy.

You might not have a wide pool of candidates to choose from

Depending on the size of your organization, you might not have too wide a pool of candidates to choose from. If there is only one or two, neither may have the skills and experiences you need. This can then lead to the other two issues listed above.

Support internal hiring practices with your mentoring program

You know your workforce has the potential to turn out some fantastic internal hires, and you want to see your employees thrive as they move throughout the company. Yet, you want to ensure that they set off on their best foot possible to secure the training opportunities ahead of them. Whether you want to start them on a high-potential leadership track or you think they could benefit from shadowing a more senior team member, learning and development opportunities are key in helping your employees become their very best selves.

Mentoring is the answer. MentorcliQ’s #1 employee mentoring software takes the guesswork out of mentoring matches, so you can be confident that your workforce is paired with precisely the right mentor to help them reach their goals.