Pros and Cons of Internal Recruitment

The pros and cons of the internal recruitment process for your company

The pros and cons of the internal recruitment process to your company
Internal recruitment process

The pros and cons of the internal recruitment process for your company

When hiring new employees, one of the main challenges is finding someone who will fit into the team, culture and policies of the company. This is only one of the reasons why external companies often decide on internal recruitment. If you are an employer that is considering internal recruitment, this blog will give you some insight into its pros and cons.

What is internal recruitment?

Internal recruitment is when an organization looks to fill jobs with their current employees, sourcing talent from other teams, departments, and job functions within a company. It is simply a human resource strategy that prioritises hiring current employees for new or open positions within the company. There are several types of internal recruitment:

  • Promotions: Promotions are the most common internal recruitment method. If an employee is performing well and willing to take on more responsibility, you may give them a promotion after conducting an interview.
  • Transfers: Transfers of employees from one department to another are also quite common. The job responsibilities don’t change, but the employee moves to another department within the organisation.
  • Confirmations: An employee on probation, an intern in a temporary position or even an independent contractor who becomes permanent are all examples of confirmation.
  • Referrals: Referrals have become an essential part of the recruitment process. If an employee refers a viable candidate with the right qualifications for a particular job to hiring managers, it could help save lots of time and money during recruitment.

The pros of internal recruitment

LinkedIn’s 2020 Global Talent Trends found that over 70% of businesses are now focused on “internal recruiting”. Among the benefits of this approach are a faster hiring process and a faster time-to-productivity compared to external recruitments. According to the same survey, there are significant benefits to internal recruitment:

  • 94% of respondents stated that internal recruitment improves the retention of their most valuable talent. Employers with active internal career management programs enjoy 41% higher staff retention rates.
  • Internal recruitment also enables organizations to promote growth and is considered by Deloitte as a ‘critical talent initiative’ More than twice as many high performance organizations prioritize internal recruitment compared to low performing businesses.

Sure cultural fit

When hiring internally, one most important thing that saves you time, money and trouble, is ensuring that the candidate will be a great cultural fit. How do you know that? Well, because he already works for you so you’ve had the time and experience to get to know them better, as well as had a chance to get used to the company’s rules and processes.

Reduced hiring time

Companies can spend several days interviewing and conducting background checks. Internal recruitment can reduce hiring times and ensure that new employees are ready to take on responsibilities almost immediately.

Possibility of saving money

Companies spend a considerable amount of money during the hiring process. Recruiting internally can reduce expenditure by a significant margin because companies can use internal resources, can hire candidates from referrals etc. However, it doesn’t mean that it saves money every time! It all depends on the process and resources.

Reduced onboarding time

When you recruit internally, for example when you promote a current employee, the onboarding time can be much quicker as they are already use to internal processes, software, know the team etc. They may start learning their position without having to learn about company culture, benefits and other common onboarding topics.

Improved employee morale

Internal recruitment boosts morale because employees understand there are paths to progress internally. They might feel more passionate about their jobs, more motivated and have more trust to the employer.

The cons of internal recruitment

There are also a few downsides to recruiting internally that you should take under consideration.

Reduced talent pool

When you recruit internally, you reduce your application pool. Rather than exploring additional candidates from other companies or industries, you select from internal employees only. In some cases, an existing employee may be the best fit, but in others an external perspective might be preferable. A new employee may bring with them innovative skills and refreshing ideas that could benefit the role and team. An overreliance on internal hiring could also lead to stagnant company culture and employee complacency.

Another gap to fill

While it’s great to fill a role within an organisation, internal recruitment may result in another gap elsewhere. This could mean turning to external hiring to take on the role of previous employee, incurring the cost and time issues previously discussed. Small and fast-growing companies may not have the option to hire internally at all if their pool of talent isn’t large enough.

Bias concerns

Internal recruitment can cause bias concerns within an organisation. This is because it’s harder for hiring managers to be fair and objective when choosing candidates that are already known to them. These biases – whether implicit or not – may cause prejudice for or against a particular candidate and lead to the most suitable employee missing out on the role.

Internal recruitment can be hugely beneficial for both an organisation and its employees. That said, the downsides to internal recruitment must also be taken into consideration. Best practice is to find balance between internal and external recruitment. If you are still unsure whether you should recruit internally, feel free to check out the candidates of PitchMe!

You can post your job on our platform for free and see the suggested candidates. We match them to your position based on their skills. Compare them to the talent pool from internal recruitment and then decide on the hiring process!

If you like PitchMe, leave us a review on Trustpilot or Google!


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