The Advantages of Internal Recruitment

What is Internal Recruitment?

The internal recruitment process is an invaluable talent acquisition approach that brings plenty of benefits for both the company and the employees. Employees can benefit from having a clear career path and advancement opportunities to move upward into positions that align with them professionally.

On the other hand, companies spend less time finding the right talent and advance and promote full-time team members who are the best for an upcoming job opening. Internal recruitment revolves around promotions and, in some cases, turning contract-based employees into permanent internal employees.

Advantages and Benefits of Internal Recruitment

There are numerous advantages to promoting internal candidates that can help mitigate risks associated with hiring and recruitment. One of the key advantages is eliminating all the pain points the recruitment process carries. Recruiting candidates internally saves time and costs in the short term because companies hire people they know and trust. This means they don’t have to pay external recruiters and hiring fees to find the right talent for their open position.

Reduced Cost

Reducing costs is one of the most significant advantages of internal recruitment. The monetary costs you can save are an advantage, including paying recruiting agencies, forming tests, and conducting interviews. There is no need to spend money on AI recruiting software or advertisements. Internal recruitment saves time and money.

Statistics also show that external hiring costs about 1.7 times more than internal hiring because companies do not need to:

Post ads on job boards – companies can quickly inform internal candidates about job openings through email, newsletter or even internal job boards
Pay for background checks – companies have already performed a background check for candidates, and there will be no need for a new one
Subscribe to various resume databases – rather than finding passive candidates in resume databases, company managers can find team members in their databases or adopt employee referral practices

Familiarity with Company Culture

Existing employees who have been with a company for longer already fit in with the company culture. Hiring external candidates may sometimes not be a cultural fit as they might not adjust to the organisation. Statistics show that 73% of employees leave their jobs because they don’t fit the company’s culture. One method that can help you avoid this challenge is to consider someone who is already part of the culture.

Talent Development and Retention

Training employees is more straightforward and cost-effective than training and investing in someone new. Talent development is also beneficial for current employees as they can gain new knowledge and skills that can lead towards a higher position, but also, company-wise, it helps to increase retention rates.

Steps like talent development are directly correlated to higher employee retention rates as they demonstrate to the employees that they have many opportunities for career growth. This sense of progression and encouragement leads to higher job satisfaction and loyalty and reduced external recruitment costs. Companies cultivate a more committed and motivated workforce by actively investing in development.

Improved Cultural Fit

Another significant advantage of hiring internally is preserving your organisational culture. This is because the existing employees are already familiar with the values and mission of the company. Integrating new hires can pose risks of disrupting the current culture, although the hiring managers will work hard to find the perfect fit for the company. However, this is only sometimes guaranteed, which is why internal recruitment helps promote and transfer employees to maintain the continuity of the company culture.

Employee Morale and Retention

Employees will require opportunities for growth, progress and learning. As they work in the same organisation, they will look for ways to move up the ladder and receive better pay, new skills and expanded knowledge of their current responsibilities and talent. Hiring within your workforce is one way to provide these opportunities.

Promoting your current employees will convey that you value and want to invest in them. Giving employees more opportunities to advance in their careers is crucial for good morale and higher retention rates. The employees who wish to change their roles will continue developing professionally and unlock more opportunities in the future. This can also build a new culture of trust, enhancing employee engagement and retention.

When companies consider assigning more significant responsibilities to employees, it may boost their morale and make them see your faith in them. The chances of higher productivity are also more meaningful as they will share their passion for uplifting juniors and newcomers with the same energy you provide for them. Internal recruitment work will help build stronger rapport among employees and bring long-term benefits to the organisation.

Growth Opportunities to Your Employees

Employees in different positions will have other priorities pushing them towards accepting or rejecting a job. When the company provides growth opportunities, plenty of internal candidates will be suitable for the position, which increases the likelihood of that internal hire staying within the organisation for a more extended period. It also reduces the turnover rates and adds to the increased employee retention rates.

Faster Onboarding

Most employees will need some time to adjust to a new role. However, internal hires are usually quicker to onboard because:

They know how the company works
They understand all the company’s policies and procedures
They are familiar with the people on their team
They understand the context and content of their new roles

Internal candidates know whether they like the company, as they have already decided whether they want to be here in the long run. The statistics show up to 17% of the new hires leave after the first month. Recruiting internally means you will spend less time onboarding because the candidate is already familiar with the entire system and way of operating.

Conclusion

Internal recruiting has a few downsides, like having a limited talent pool from which to choose. However, there are plenty of pros for internal recruitment, such as reducing costs, time, and turnover.

If you want to conduct internal recruiting effectively, you can contact our team at Olive Recruit to help you create a strategy that will benefit both candidates and companies. Olive Recruit can streamline the process and help you find the right talent for your open position when you recruit internally.