What Is Internal Recruitment? 7 Internal Recruitment Methods (+ Examples)
Given today’s talent shortages and high staff turnover rates, internal recruitment can be a smart strategy. LinkedIn’s Global Talent Trends report found that employees tend to stick around 41% longer in companies that regularly hire from within, while a Hiring & Job Search Outlook Report found that 49.5% of U.S. employers planned to hire from within or promote current employees to fill roles.
Organizations are rediscovering the financial benefits of hiring from within. Workplace learning also helps build skills internally, so there’s less need to import them from elsewhere. What’s more, leveraging existing knowledge and experience within the organization makes good business sense because it promotes employee retention and morale by offering career advancement opportunities.
Contents
What is internal recruitment?
Advantages of internal recruitment
Internal recruitment disadvantages
Internal vs. external recruitment
7 Internal recruitment methods
Internal recruitment examples
Developing an effective internal recruitment process
What is internal recruitment?
Internal recruitment is the process of filling job openings within a company by considering current employees who might be a suitable fit for these roles. Unlike external recruitment, which involves searching for candidates outside the organization, hiring from within focuses on identifying and promoting, or transferring, existing staff.
The process involves a few key steps. Firstly, the job vacancy is advertised within the organization, often through internal job boards, emails, or company intranet. This ensures that all current employees are aware of the opportunity and can apply if they are interested. Employees who apply are then assessed based on their qualifications, experience, and performance history within the company.
Advantages of internal recruitment
- Cost-effective: Internal recruitment can significantly reduce costs associated with advertising job positions, conducting external candidate screenings, and other hiring processes.
- Faster hiring process: Since the candidates are already employees, the process of hiring is generally quicker. There’s less need for extensive background checks or lengthy onboarding processes.
- Improves employee morale: Providing current employees with opportunities for advancement can boost morale and job satisfaction. It shows the company’s commitment to employee growth and recognition of their contributions.
- Reduces training time: Internal candidates are already familiar with your company’s operations, culture, and processes. This familiarity reduces the time and resources needed for training and orientation.
- Lower risk: Employees who have already proven their skills and fit within the company culture represent a lower risk compared to external hires, who might not adapt as well.
- Retention of talent: By offering career progression opportunities within the company, you can retain valuable employees who might otherwise seek advancement elsewhere.
- Encourages employee development: A clear path for internal advancement encourages employees to develop their skills and competencies, knowing that there are opportunities for growth within your organization.
- Informed decision-making: Your organization has more comprehensive information about internal candidates, such as their work history, performance, and professional behavior, enabling more informed hiring decisions.
- Strengthens internal networks: Promoting from within can strengthen work relationships and team dynamics, as employees are often already familiar with each other and the existing work environment.
- Preserves organizational knowledge: Internal recruitment maintains continuity and preserves institutional knowledge, as existing employees understand the company’s history, values, and internal dynamics.
Internal recruitment disadvantages
- Limited pool of candidates: Relying solely on internal recruitment can limit your organization to a smaller pool of candidates, and you may miss out on more diverse or skilled talent available externally.
- Lack of fresh perspectives: Continuously hiring internally can lead to a lack of fresh ideas and perspectives, which is necessary for innovation and staying competitive in the market.
- Employee complacency: Knowing that promotions are available internally might lead some employees to become complacent, relying on their tenure rather than actively developing new skills or competencies.
- Risk of favoritism: There’s a risk that decisions in internal recruitment could be influenced by favoritism or office politics rather than purely on merit or suitability for the role.
- Limited negotiation leverage: Existing employees might have less negotiating power regarding salary and benefits than external candidates, which could lead to issues with pay equity and satisfaction.
- Can stifle external talent acquisition: Over-reliance on internal recruitment can deter talented external candidates from applying, as they might perceive fewer opportunities for external hires.
- May not fulfill all skills requirements: Internal candidates might not possess all the necessary skills or experience required for the role, especially for highly specialized positions.
- Employee turnover: If internal candidates are repeatedly overlooked for promotions, it can lead to dissatisfaction and increased turnover, as they might feel there’s no clear path to advancement.
Internal vs. external recruitment
| Internal recruitment | External recruitment | |
| Source of candidates | Draws from the organization’s current employees. | Looks outside the organization, targeting jobseekers or passive candidates. |
| Speed of hiring | Generally, it is faster as it involves candidates already familiar with the organization. | Typically slower, it includes processes like advertising, screening, and interviewing new candidates. |
| Costs | Lower, due to reduced advertising, onboarding, and training expenses. | Higher, due to advertising, recruitment agency fees, and extensive onboarding and training. |
| Candidate familiarity | Candidates are already familiar with the company culture and operations. | Candidates need time to adapt to the new environment and culture. |
| Pool of candidates | Limited to existing employees, potentially reducing diversity and fresh perspectives. | Broader and more diverse, potentially bringing in new ideas and skill sets. |
| Risk factor | Lower risk, as the candidates’ capabilities and fit within the company are known. | Higher risk, as external hires may not adapt well to the company culture or role. |
| Training and development | Less training required; candidates already understand company processes. | More extensive training and orientation needed for new hires to acclimatize. |
| Organizational impact | Can boost morale by offering advancement opportunities but may also create internal competition. | Brings fresh perspectives and can stimulate innovation but might disrupt existing team dynamics. |
| Employee turnover | Can reduce turnover by providing clear career paths within the organization. | May not affect turnover rates directly, but well-chosen external hires can improve long-term stability. |
| Career development opportunities | Encourages employee development within the company. | Can offer opportunities to candidates seeking a new environment or career change. |
7 Internal recruitment methods
1. Succession planning
Example: Preparing an assistant manager to step into a managerial role.
Succession planning involves identifying and developing internal employees with the potential to fill critical business leadership positions within the company. This process ensures a seamless transition in leadership roles.
Pros Cons Ensures continuity of leadership. May lead to a sense of entitlement among senior employees. Reduces the time and cost of recruiting external candidates. Can overlook external talent that might bring fresh perspectives.
2. Role changes
Example: Moving a sales representative into a customer service role.
Role changes involve shifting an employee to a different role within the organization. This includes horizontal moves or changes in job responsibilities without a formal promotion or transfer.
Pros Cons Offers employees a variety of experiences. May lead to confusion or a lack of stability if not appropriately managed. Can help find the most effective position for an employee’s skill set. Employees may require training for their new roles.
3. Transfers
Example: Transferring a branch manager to a different branch.
Transfers relocate an employee to a different department, division, or geographical location within the same organization.
Pros Cons Provides employees with new challenges and experiences. Can be disruptive to the employee’s personal life. Helps fill vacancies and balance workloads across the organization. Might lead to a temporary decrease in productivity as the employee adjusts.
4. Promotions
Example: Promoting a team leader to a department manager.
Promotions involve moving an employee to a higher position with increased responsibilities, usually accompanied by a pay raise.
Pros Cons Increases employee motivation and loyalty. Can create competition and tension among employees. Encourages other employees to work towards promotions. Risk of promoting beyond an employee’s level of competence (Peter Principle).
5. Internal mobility programs
Example: Employees participating in a rotational program to experience different departments.
These programs are designed to allow employees to move within the company through various roles or projects. They include short-term assignments, project-based work, and rotational programs.
Pros Cons Enhances employee skills and experiences. Can be logistically challenging to manage. Keeps employees engaged and reduces turnover. May disrupt workflow if not properly planned.
6. Cross-training
Example: Training customer service staff in basic sales techniques.
Cross-training employees to perform tasks or roles outside their usual responsibilities prepares them for a range of roles within the company.
Pros Cons Creates a more flexible and versatile workforce. Can be time-consuming and potentially overwhelming for employees. Helps cover absences or vacancies without hiring temporary workers. May dilute specialized skills if not balanced properly.
7. Skills assessment and development plans
Example: Assessing a marketing employee’s digital skills and providing training in social media management.
This method includes evaluating employees’ skills and designing development plans to enhance their capabilities. It focuses on identifying and bridging skill gaps for current or future roles.
Pros Cons Tailored development of employees. Can be resource-intensive in terms of time and training costs. Ensures readiness for future organizational needs. May create expectations of promotions or role changes that are not immediately available. 
Internal recruitment examples
Here are three examples of companies that have successfully implemented various internal recruitment methods:
Example 1: Succession planning at Microsoft
Microsoft moved from a numbers-focused “People Review” to “Talent Talks” under CEO Satya Nadella’s leadership. The shift focuses on developing talent and planning for the future and was driven by a commitment to lifelong learning and a growth mindset. It’s an approach that examines individual talent needs and organizational talent bench strength.
Talent Talks cover succession planning, external talent cultivation, and the impact of talent inflow and outflow on the team. A key shift has been to ask potential successors if they are interested rather than assuming their willingness. This forward-looking approach helps avoid surprises and encourages career growth.
Example 2: Job rotations at ExxonMobil
ExxonMobil enables its employees to reach their full potential, as reflected in its robust job rotation program, which facilitates over 12,000 internal job rotations annually as part of its employee development plans. These rotations are designed to provide a diverse range of experiences and learning opportunities, aiding in the comprehensive professional growth of staff.
Additionally, ExxonMobil’s focus on continuous learning is highlighted by the delivery of 500,000 courses in 2022 alone, underscoring its dedication to ongoing training and education. This approach enhances individual skill sets and contributes to the overall expertise and adaptability of its workforce.
Example 3: Internal mobility at Schneider
In 2019, to address its retention issues, Schneider Electric, launched the Open Talent Market. This talent marketplace, uses AI to match employees with internal roles, gigs, and mentorships, based on their job titles. The platform was well-received by employees, with 85,000 registering, though it initially faced resistance from managers.
To further enhance its effectiveness, Schneider’s talent team focused on a skills-first approach and developed a skills taxonomy to streamline internal and external hiring processes. This initiative has shown promising results: 85% of eligible employees have engaged with the platform, 1,500 employees gained visibility to over 14,000 roles, and thousands have found mentors and internal gig opportunities.
Developing an effective internal recruitment process
To develop and implement a successful internal recruitment process, HR professionals should consider the following best practices:
- Clear communication of opportunities: Ensure that all internal job openings are communicated clearly and widely within the organization. Utilize various channels like internal job boards, emails, company newsletters, and intranet.
- Transparent process: Maintain transparency in the recruitment process. Clearly outline the application and selection criteria, timelines, and expectations for all employees.
- Fair and consistent selection criteria: Develop and adhere to a fair and consistent set of selection criteria for all internal candidates. This helps to mitigate bias and ensure that the best candidate is chosen based on merit.
- Encourage employee development: Foster a culture that encourages continuous learning and development. This ensures that employees have the necessary skills and competencies for internal opportunities.
- Supportive transition plans: Provide support for employees transitioning into new roles. This could include training, mentorship, and a gradual adjustment period to ensure successful role adaptation.
- Feedback mechanisms: Implement a system for providing feedback to candidates who were not selected. Constructive feedback can help them in future applications and contribute to their professional development.
- Regularly review talent pool: Conduct periodic reviews of the employee talent pool to identify potential candidates for future openings, aligning with succession planning strategies.
- Balancing internal and external recruitment: While focusing on internal recruitment, also maintain a balance with external recruitment to ensure a diverse and dynamic workforce.
- Encourage cross-departmental opportunities: Promote cross-departmental movement to encourage broadening of skills and experiences, which can lead to more well-rounded employees.
- Inclusive and diverse recruitment practices: Ensure that the internal recruitment process is inclusive and allows equal opportunities for all employees, regardless of their background or department.
HR tip
Employee willingness to exceed expectations at work is 27% higher, and employee intent to stay is 33% higher in organizations with a more vibrant internal labor market. Managers also report internal hires perform better than those hired from outside across a whole range of measures, including attendance, collaboration, and meeting expectations.
By following these practices, you can create a robust and effective internal recruitment process that not only fills positions efficiently but also drives employee growth, satisfaction, and retention.
Key takeaway
Internal recruitment is increasingly being recognized as a strategic approach to talent management, especially in the face of talent shortages and high staff turnover rates. A report from LinkedIn indicated that employees tend to stay 41% longer at companies that frequently hire internally. Furthermore, a significant portion of U.S. employers, about 49.5%, planned to hire or promote from within. This approach is not only cost-effective but also capitalizes on the existing skills and knowledge within an organization, leading to better employee retention and morale.
The process typically includes advertising the vacancy internally and assessing interested employees based on their qualifications and performance within the company. This method turns out to be more efficient and cost-effective, enabling talent retention and employee development. It allows for a quicker hiring process due to familiarity with the company culture and reduces the need for extensive training.
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