Published: Nov 15th, 2023

Should you recruit internally? It can be a nail-biting decision. You already have good people on your team — maybe the best ones for the job. You don’t want to lose them or alienate them. But how can you be sure if the right new hires are already inside the company, or waiting just outside your doors?

The good news is, internal recruitment isn’t complicated. It’s a tool — one of many in your hiring toolbox. It’s not hard to know when you should recruit internally, and when you shouldn’t. It all comes down to your hiring strategy and the roles you’d like to fill.

What is internal recruitment?

Internal recruitment is choosing to fill job vacancies or specific roles from within your existing workforce. It doesn’t matter if you’re hiring for a new position, a promotion, or even a succession plan. Internal recruiting follows the same process as interviewing and hiring from external sources.

Hiring the right person into the right job is a business imperative. That challenge is on steroids in today’s job market. To win more often in this talent competition, you MUST include internal recruitment (not just job posting) in any successful recruiting strategy.

When to use internal recruitment

Use internal recruitment to boost workforce diversity, build engagement with your employees, grow your internal skill sets, and retain your best employees before they look elsewhere for personal fulfillment.

Diversity

If you’re concerned about diversity, equity and inclusion, (as you should be), think about how to develop and move your current diverse employees into roles that add the most value. Make sure those new roles add value both to you and to them.

Retention and employee development

Think about pay equity with internal candidates. Don’t take these folks for granted or get cheap — they’ll know it and resent it. Are you concerned about having too many internal candidates filling positions and not enough “fresh blood?” Then take a good, hard look at your recruiting practices.

Determine the percentage of hires you want as internal vs. external, in what roles, and on what timeline. Successful internal and external recruiting practices have similarities and key differences that hiring leaders must consider. The decision to go internal, external, or both needs to be a thoughtful one in every recruiting effort.

Benefits of internal recruitment

Internal hiring can be a powerful retention strategy for your internal workforce. It can encourage existing employees to step up and out of their current roles. Internal recruiting can challenge your team members to expand their knowledge and skills — without leaving your company.

Here are the advantages of recruiting internally:

Hire faster, cheaper

When you focus on internal recruits for a particular position, you're likely to save time and money compared to a full-blown recruitment process. This is particularly true for job openings you’d normally fill via a professional recruitment firm.

Build on loyalty

Internal candidates know you, your business, your customers, and your culture — warts and all. When you recruit internally, employees will stick around longer and reach full productivity faster in their new roles vs a new-to-you hire.

The message you send current employees is, “We appreciate and believe in you. You belong here, and we want you to continue to add value in new ways.” I know how that message affected me when I was internally recruited for my last position at Cornell University – I was all in and stayed in!

Create engagement

Lateral internal recruitment can be very attractive to your employees. They’ll get to work with a new team, new leader, and gain new challenges that offer an opportunity to expand their knowledge and skill sets. They’ll also broaden their experience, networks, and skills. Wouldn’t you want to work for an organization that tangibly demonstrates how it values its employees with professional growth and development?

Send the right message

If one part of your organization has had workforce reductions, recruiting laid-off employees (potential or actual) sends a positive message throughout your culture. You’re saying that even in tough times you’re still loyal, and you value the skills and experience they bring to the table.

Save time

Internal recruits are “known” to your organization. They have a reputation, internal track record and history that can speed up your selection process.

Disadvantages of internal recruitment

Knowing when not to hire internally is as important as knowing when to dig for gold in your current workforce. Being aware of the pitfalls of internal recruitment can help you make the right decision about which method of recruitment to use, and when.

Smaller candidate pool

When you limit your search to internal recruits, you significantly reduce your pool of candidates and diversity. Do you really want to build a workforce that reflects your goals for inclusion, or is that just public posturing? Exclusive internal recruiting can make diversity harder to achieve — depending on the diversity of your current workforce. On the flipside, internal recruiting can retain employees who already add to your workforce diversity by moving them into the best roles.

Jealousy

When a co-worker/peer becomes a leader, it can cause conflict. When two internal peers vie for the same position and only one gets the job, resentment can explode, or even sabotage. However, when the internal search is seen as fair, when communication among all parties is done well, and when all candidates are treated with dignity, this con can turn into a pro.

Culture of the clique

Homogeneity in backgrounds, skin color, gender, perspectives, and attitudes can and often does create an environment for groupthink. When you reinforce the status quo, people hesitate to disagree with each other and may fail to handle conflict productively. Internal recruitment can encourage a culture of “in crowd vs out crowd.” In that situation, anyone new or different from the majority may feel unwelcome.

Stagnation

Stagnation and resistance to change are more common among employees when recruiting is limited to internal candidates too often. Failure to innovate can result, as can behaviors that demonstrate a low tolerance for risk taking.

Selection bias

Internal recruits are “known” to your organization. This can create bias in the selection process because of a positive or negative “halo” effect. That halo can make one or a few viewpoints weigh too heavily, so you don’t end up hiring the right candidates.

10 tips to get internal recruiting right, time after time

It’s vital to manage internal recruiting as fairly and transparently as external recruitment. Commit to adhere to your values and hiring practices. If you don’t, you’ll risk a reputation for either favoring or discounting internal recruits. Here are some key elements to a clean internal recruiting process:

Internal recruiting needs a strong plan, with clear goals, communication, and information shared freely with employees."

1. Be clear in your postings. Explain whether you’re hiring exclusively from your existing workforce, using internal sourcing, or both. Make sure all employees have access to that information and understand your internal recruitment methods.
2. Be clear in internal communication. Make it clear that moving around your organization is good for your business, not something to fear discussing with a supervisor.
3. Let internal recruits meet the team. Give them an opportunity to meet key players informally before they formally apply. This will let them learn up front about the internal position.
4. Build a strong internal pipeline. Create growth opportunities for internal employees.
5. Encourage employee development. Ramp up internal development opportunities as needed to create more diversity and inclusion from the front line up. Then, remove institutional blocks to employee growth and skill building.
6. Maintain a rigorous process. Internal recruitment candidates want to know they were offered a job because they earned it. That means your internal recruitment process should be as rigorous as it would be for an external candidate.
7. Consider skipping the search. Weigh the value of posting a job when there’s a “strong internal candidate” in a department or division. Instead, determine if a waiver of search is better. For an internal recruitment example, let’s say the person has been in an acting role for six months and has been highly effective. Don’t waste everyone’s time on a “faux search” when you’ve already decided to choose that person.
8. Create incentives for managers to grow their best people. Then either promote or let them go. The message should be, “When anyone lifts the boat, everyone in our business benefits.” Managers need to believe it’s a win — not a loss — for them when one of their employees is internally recruited.
9. Check references. Reference-checking for internal recruits should be as strict as for external candidates. Then listen to a wide variety of people who know the candidate. Pay close attention to what’s said and not said. Don’t depend on the internal candidate’s list of references. Go deeper.
10. Encourage and reward lateral moves for internal candidates. This enhances their skills and add value to your business.

Summary

Internal recruitment candidates and internal recruiting efforts will always be part of the workforce recruiting efforts of any organization. It’s not if, but how you recruit from inside your employee base that matters to your overall success. By taking the pros and cons into account and paying close attention to the above “how to” list, your likelihood of getting it right — with the right person in the right job — will increase exponentially.