It’s easy to view hiring from within your organization as straightforward, especially since the candidates are already employees. While this is true, executing internal recruiting processes without proper strategizing can lead to negative side effects like skill gaps and a stiff organizational structure. When implemented properly, however, internal recruiting can bring numerous benefits, including reduced time to hire and fewer costs.
So, if you want to harness the benefits of internal recruitment and minimize the challenges, you need some guidance. Fortunately, this guide has all the direction you need to carry out a successful and effective internal hiring process.
But before we begin…
What is internal recruiting?
Internal recruiting means filling open positions within your company with talented people from your existing workforce. Companies that practice internal recruiting tap into their immediate talent pool instead of posting job descriptions on public boards for external talent to apply.
In 2020, internal hiring processes reached an all-time high, with around 40% of hires coming from the process. However, AMS reports that this number reduced to about 24% in 2023. This decline is majorly attributed to the fact that external talent has been readily available after the pandemic. The only catch is that these external hires, while talented, don’t always fit the company’s culture, and they cost a fortune to recruit and onboard.
Hiring within your company solves this problem, hitting two birds with one stone. On the one hand, it saves you costs, and on the other, it prevents you from hiring someone whose work culture doesn’t align with your company.
Typically, internal recruiting functions by promoting, reassigning, or transferring employees within an organization across teams. In so doing, the company can fill up empty positions, close skill gaps within teams, and hire people who already have the company’s culture at heart.
Benefits of internal recruiting
Recruiting from within your company comes with many perks, including cost-effectiveness and shorter hiring cycles. Below, we’ll explain these benefits and analyze what they mean for your company even after the recruitment process:
1. It is cost-effective
According to Indeed, hiring a new employee can cost between $4000 and $20000 on average, excluding salary and benefits. Companies that hire externally, especially through recruitment agencies, are more likely to spend an amount close to the expensive end of the spectrum. This is because it comes with added costs like recruitment agency fees and training equipment costs.
With internal recruitment, you can significantly reduce this cost since you don’t have to incur extra costs like paying for job postings and onboarding. This allows you to channel this funding into other organizational projects. You can even improve the experience your employees have with your company by providing more working equipment and increasing their benefits.
2. It speeds up the hiring process
The process of external hiring sometimes takes several months. From developing your hiring strategy to crafting a job description, finding a great place to post it, and assessing candidate skills, these multiple steps can be time-consuming.
To curb this, internal recruitment allows you to skip some steps and make your hiring decisions quickly. For example, when hiring internally, you don’t have to search for a job posting platform or assess candidates for culture fit. With these steps out of the way, you can focus on other time-consuming parts of your hiring, like comprehensive skill testing to ensure the candidate is fit for the open post.
3. It encourages employee retention
Internal recruitment methods, like a promotion system, allow your employees to advance in their careers within your company. This boosts employee retention because your workforce views it as your company’s way of showing that it values their time, effort, and professional goals.
By displaying your company’s dedication to its employees through internal mobility structures and promotion systems, you can improve employee satisfaction. This also gives you a great reputation among potential employees, making it easier to attract talent even when hiring externally.
4. It boosts organizational productivity
One major benefit of internal recruiting is that you don’t have to spend as much effort onboarding your hires since they’re already accustomed to your company’s processes. This means that your new hires are already aligned with your company’s mission and vision and know how to use important software and equipment.
So, while they might require some training on using tools unique to the new role, you don’t have to start from scratch with them. This smoothens the learning curve and makes it easier to adapt to the new position, encouraging them to be more productive. In turn, this propels your organization faster and further toward its goals.
5. It ensures cultural fit
Bringing external hires into your already existing team can sometimes disrupt their dynamics, which can also affect their collaboration and efficiency. This happens because the new hires might not fit into the team’s culture, resulting in widely different views and work styles.
Internal recruitment prevents this by mobilizing employees who already fit your company culture to the team. This way, the new hire can easily collaborate with the team and present new ideas and work approaches without disrupting existing dynamics.
Key processes and best practices for internal recruiting
While internal recruitment offers compelling advantages, implementing it successfully requires careful planning and well-designed processes. Let’s explore the essential steps and best practices that will help you build an effective internal hiring system.
1. Set clear policies for your hiring process
Before starting the actual recruiting process, you must outline the policies, rules, and regulations. This will guide both your recruiters and the candidates on what you want from the ideal candidate and the process as a whole.
To properly set these policies, you should start by defining the goals of your recruitment process. These goals could be to fill up skill gaps within your company or to redistribute talent across teams. Based on your recruitment goals, you can determine the prerequisites for employees to apply for the positions and the structure of the candidate screening process.
2. Consider succession planning
With succession planning, you can set the right people in place for a specific role before the role even gets open. This internal recruiting method lets you train employees for a different or higher position for a period while they’re still in their current post.
Succession planning lets you identify high-potential employees, train them for positions, and offer them the post once they’re ready. When implemented correctly, this process can ensure your company is always equipped for its future talent needs.
To properly set up your succession model for internal recruitment, you must develop a process to identify candidates with high potential. For this, you can use skill evaluation methods, referrals, or a combination of both. You must also develop career pathways for selected employees using training programs, mentorships, or even rotational assignments.
3. Implement a promotion process
Promotion processes, while similar to succession planning, have different principles. Unlike in succession planning, employees aren’t assigned and trained for promotions beforehand. Rather, based on their performance and proven skill, the company awards select employees a higher position.
When implementing promotions, the first thing to do is set the criteria. This could include specific skills and performance metrics, like work efficiency, that make an employee qualified for promotion. Once this is set, create a transparent screening process to vet employee skills before granting them a promotion.
4. Utilize referrals
Although employee referrals are typically considered for external recruitment needs, they’re also valuable in internal recruitment. It’s one of the easiest ways to tap into the network of your current employees and find those performing excellently in their positions. These referrals can come from managers, team leads, or even teammates.
When utilizing referrals for internal recruitment, be sure to create an easy but effective platform for revising them. For example, you can use a referral portal for employees to recommend others anonymously for various positions.
5. Apply skills testing
Skills testing is an effective way to assess your employees’ necessary skills and qualifications for the open role. By using objective testing methods and a reliable skill testing platform, you can evaluate employees’ technical skills, such as knowledge of a specific tool’s operation. You can also use these tests to check their problem-solving skills and general job fit.
Before using a skills test, be sure to identify the skills necessary for the role and then select a testing platform that suits your needs. Vervoe is a good place to start when selecting an assessment tool, especially since it offers numerous skills tests for various positions. From job simulations to an extensive assessment library, it is equipped with everything you need for a comprehensive evaluation process.
Common challenges with internal recruiting and how to tackle them
While internal recruiting certainly has its benefits, before adopting it, you should consider the possible challenges that could arise during the process. As a result, you can set measures in place to tackle these obstacles and ensure a seamless recruitment process.
In this section, we will explore these potential challenges and the ways you can tackle them accordingly:
1. Limited candidate pool
Since internal recruiting involves hiring people within your company, the candidate pool might not be wide enough to find the talent your company needs. This limited candidate pool can restrict diversity within your company, leading to reduced culture add and stiff processes.
To curb this, it’s vital to set up career development paths that ensure you always have enough talent to redistribute where necessary. You can also implement promotions and training programs for more seamless internal mobility.
2. Unrealistic employee expectations
With internal recruitment, there is a chance that employees might develop an inflated sense of qualification for promotions, salary increases, or career developments. These expectations sometimes might not match their performance, resulting in some friction if they don’t get the open position.
Ideally, clear communication and set guidelines for the recruitment or promotion process can help ensure employee expectations are in check. Additionally, if you don’t select a candidate for a role, it’s always advisable to leave constructive feedback, stating why they weren’t selected and how they can improve.
3. Poor career development planning
Internal recruitment can lead to several employees getting restricted to specific roles or departments. When this happens, employees could start to feel like there is little to no room for their careers to develop.
To solve this, employees should be encouraged to take on different roles within the company that may not be promotion-based but still contribute to their professional development. Also, HR teams should develop a clear succession plan that outlines a pathway for employee growth, even when immediate promotion isn’t available.
4. Potential for bias
Bias is common in the internal recruitment process, especially those relying solely on referrals. This is because managers and even other employees can favor a candidate based on their personal inclination rather than skill. As a result of this hiring bias, the process can become unfair to some employees.
One way to prevent this is to vet the candidates with skill assessments, even after they’ve been referred for the position. Vervoe offers you the perfect platform to host these skill evaluation processes with ease. It also has a personalized AI grading system that marks your candidates based on your set standards.
This gives all the candidates an equal shot at demonstrating their skills and fit for the position.
What comes after internal recruitment?
When a business opts for internal recruitment, it triggers a ripple effect called a “domino effect” or a “vacancy chain.” This effect means that another position might be left open after an existing employee fills a different post.
Here’s how it occurs:
1. Identifying the need: An organization identifies the need for a certain role to be filled internally. As such, the company reassigns an employee from a different team or role to a new one. For example, the employee can move from being the content writer for the social media marketing team to becoming a content strategist.
2. Creating a new opening: While the new role has been filled, this creates an opening in the employee’s former role. In our example, this means that the social media marketing team now lacks a content writer.
3. The chain reaction: To fill the new vacancy, the company might assign another employee to the role, creating another opening in the second employee’s role. If this continues, it creates a chain that only ends if the company hires an external candidate, eliminates the position, or restructures employee roles.
This vacancy chain can have both positive and negative impacts on an organization:
Advantages of the vacancy chain
- As employees move up the chain, they gain more skills and development opportunities that can benefit the company.
- The company retains institutional knowledge while providing room for more skill advancement among employees.
- The chain can help build strong talent and propel them toward leadership roles in the future.
Demerits of the vacancy chain
- It can become challenging to manage and fill multiple vacancy chains simultaneously.
- If left unfilled, these vacancy chains may widen skill gaps within the company.
- As employees transition into newer, more demanding roles, it can lead to a short-term workflow disruption, resulting in inefficiency.
If the vacancy chain progresses and the company keeps promoting lower-rank employees to fill up positions, it would end up with several unfilled entry-level roles. However, these roles are easier to fill since they require less specialized experience and technical skills. Plus, your company can be more flexible with entry-level positions and provide opportunities for career training and development according to their needs.
Overall, dealing with these vacancy chains often requires a proper internal recruitment plan that accounts for multiple vacancies, even as new roles are filled. For example, you can utilize a succession hiring model to prepare specific employees for the role. Cross-training employees is also another great way to deal with these vacancies, as they can step into roles temporarily without disrupting company operations.
Transform your recruitment strategy with Vervoe
Implementing a successful recruitment process might seem pretty easy at first, but it can be challenging if you don’t plan properly. On the bright side, using effective strategies like skill assessments can make the process bias-free and effective.
Vervoe gives you access to over 300 of these skill tests via its vast assessment library, which is fit for various roles. Each test is designed with questions that not only test for technical skills but also evaluate their proficiency level. This lets you accurately predict their performance in a role based on the test results.
With added features like job simulations for scenario-based assessment and customizable tests to boost candidate experience, you can rest assured of a successful hiring process. So, request a demo today and be on your way to a stronger, more productive workforce today!
