What is internal recruitment: advantages and disadvantages

What is internal recruitment: advantages and disadvantages

Before going for external recruitment, have you ever thought about considering the people who already work in your company? Find out in this article how to do internal recruiting, the pros and cons.

The search and selection of personnel is a process that is anything but simple and easy, but it is increasingly crucial, nowadays, to grow the business of a company. This is why in the recruitment process, for reasons of time but also to enhance the value of people who already work within the company, what is called internal recruitment can be increasingly crucial.

As you can imagine, this is a different type of selection from external recruitment, which, instead, aims to look for talent outside the company. But what does it mean to do internal recruitment? Are there any advantages? And what disadvantages can you encounter instead? In this article we will try to give you a broad overview of this type of recruitment to understand if it could be the most useful solution for the company you work for.


Internal recruitment: what it is and its main features

Before going into the matter, it’s good to give a definition and clarify what the main aspects of internal recruitment are. If we wanted to summarize the concept with a slogan, we could try to “find the right person by simply… looking inside”. Basically, internal recruitment is the process whereby a company decides to open a vacancy not externally, but only by advertising it internally, thus allowing employees, but also collaborators, to apply without having to “compete” with the outside world.

This can apply to top positions, as is usually the case – it is much more likely that a manager has made the entire career path within the same company rather than coming from outside, except in a few cases – as well as for any vacant position.

internal recruitment what is

Let’s say that internal recruitment is a real talent management tool that allows the company to: save time, first of all, but above all to grow internal resources and retain the best talents who, in this way, feel more motivated to stay in the company because they realize that their working life is not limited to the role they were previously assigned.

From an HR perspective, internal recruitment, unlike in the past when it was used only in emergencies (you couldn’t find the right person externally and so you started to consider internal staff), is slowly becoming a trend and is set to grow.

This is because many HR professionals believe that internal teams are better equipped to respond to the demands of a particular role and, more importantly, they already know the company, its people, management, culture and values. In addition, internal recruitment allows candidates to be assessed by HR who know exactly what it’s like to work for the company and what is required to do the job successfully.

In short, of advantages as you can guess, there are several, but internal recruitment also has limitations. Let’s look at everything in even more detail.

The benefits of internal recruitment

Among the many benefits, first and foremost, is that of enhancing and developing internal talent, improving growth, increasing retention levels and employee engagement.

Opening up positions only internally means not only considering employees suitable for roles of a certain type, such as management, but also strengthening the sense of belonging to the company.

A company that gives credit to the people it already has, that shows that it values them so highly that they are the first choice, shows itself to be solid and attentive to human resources, even in fact. In this way, then, it counteracts staff turnover, a problem that all companies have to deal with sooner or later.

In addition, with internal recruitment, a career path becomes more and more evident, which perhaps at the time of onboarding was not so clear: in this way, an employee can get the idea of actively contributing to the growth of a company. In addition to generating greater trust in the company itself, this can lead to employees making a commitment not only to fill the vacant role for which they are hired, but also to develop increasingly different skills. Even if the selection process does not go well, an employee may feel that the next opportunity may be the right one.

An internal recruitment can give a push towards upskilling (acquisition of new skills) but also towards reskilling, i.e. updating the skills that you already have, something towards which, often, employees show a certain reticence.

internal recruitment retention

In addition to those that strictly relate to staff, there are several benefits for the company itself as well as HR. First and foremost, the savings in time and money. By opening the vacancy only internally, timelines are much quicker and less time is lost in managing the candidate experience.

You don’t need to design it in every detail or at every touch point, as you might do for an external candidate, but you can rely on the fact that candidates already know the company, have chosen it and are unlikely to be distracted by anything else. And this also means saving money by using fewer resources to run the selection process.

In addition to this, internal recruitment brings another advantage: less uncertainty and fewer fears. When hiring an external candidate, on the other hand, there is always the fear, not even too latent, of making a bad decision and hiring a person who will turn out to be unsuitable or who will leave the job after a short time, making the search and selection process start all over again.

Summarizing the advantages already mentioned, internal recruitment leads to:

  • Increased retention and engagement
  • Strengthening of the corporate culture
  • Increased employee motivation
  • Growth or updating of skills
  • Less time and resources spent
  • Fewer risks and fears

If these are the pros, what are the cons of such a choice? Let’s look at them in detail.

The disadvantages of internal recruitment

The first one will immediately jump out at you: having to choose between people from within the company, it goes without saying that the recruitment process is very limited. It is true that less time and resources are spent, but the selection will always be among the people currently available, so you may also encounter difficulties in finding the right candidate.

Another disadvantage relates to skills: while we saw the positive side of having to update or reschedule earlier, it is also true that this training process is not immediate, so by the time employees apply, they may not be as experienced. Maybe they are in their current job, but for the new vacancy they may not be up to the task right away.

Also, what happens to their old position? It may remain vacant and there may be a need to have to hire new, outside staff to fill it. In short, that time and resources that seemed to have been saved could instead prove to be a boomerang.

A strong-willed person might work harder to be ready for the next selection. A person with perhaps a less strong personality, however, might become demoralized, and this could cascade into two other consequences. It could worsen her quality of work and also undermine the unity of a group by contributing to a climate of mistrust, jealousy and fostering unhealthy competition among workers.

Disadvantages, then, include: 

  • Limited recruitment
  • Candidate skills not up to standard
  • Resentment and demotivation of employees
  • Creation of a climate of distrust and jealousy

Internal recruitment vs. external recruitment

The positive and negative aspects are even more valuable when comparing internal recruitment with external recruitment. The latter has a number of benefits, including the fact that external employees usually bring a breath of fresh air to the company, bringing innovation and different solutions to problems.

Sometimes the company culture, as well as a certain modus operandi, can risk being limiting, and it is good that there are external hires. This may be people who have worked in larger firms, abroad or who have focused on a certain type of training.

External candidates can bring technical and specific skills that internal employees don’t have, and they can also enhance the company’s employer branding, i.e. its attractiveness as a brand in the world of work. If a company focuses only on internal recruitment, it risks becoming a company that is closed in on itself.

So what is the way forward? Consider both processes, but be careful.

Tips for internal recruitment

Here are our final tips for internal recruitment.

Digitize your recruitment process

The ideal solution? Definitely use ATS software like Inrecruiting that, based on data, simplifies the hiring process and integrates the best of what comes from recruiting questionnaires (submitted to employees) to create job description templates and facilitate access to job boards. In addition, this allows you to monitor the progress of the recruitment process and ensure that hiring complies with current legislation, such as privacy and data capture under GDPR.

Make sure you involve all members of the HR team

This is a crucial aspect. For a successful recruitment process, it is necessary for the entire HR team to behave in the same way, for example in treating candidates and ensuring the best candidate experience. Therefore, by training employees, you can limit the risks associated with recruitment. If everyone has a certain modus operandi, it is certain that each person on the team will know how to choose the right candidate.

Always consider internal candidates first

Even if you want to do an outside search, “looking in” is always a good solution, so favor internal applications and make sure employees know there is a vacancy. If employees get involved, even if no one ultimately turns out to live up to expectations, they will still feel a part of the selection process. Not least because the new hire will still be working with those already at the company.

Use digital communication tools

Whether the company you work for is small or large, it can happen that you miss internal news. Therefore, on a monthly basis or when a vacancy arises, it’s a good idea to send an email or, if the company has a weekly or monthly newsletter, sent to internal staff, to report the news of the vacancy. The use of an intranet, if any, or the same social media, even if directed externally, are also useful: you can post the job offer on the Facebook or LinkedIn page, and then send an internal communication to say that priority will be given to the internal staff of the company.

These are some tips that will allow you to improve internal recruitment and better manage the process of recruitment and selection of personnel by enhancing the talents you already have “in house”.