Internal recruitment: advantages and benefits

Internal recruitment is a strategy that allows companies to make the most of their talent pool and reduce recruitment costs.

In today’s labor market, where companies are aware of the need to introduce their teams to a dynamic of continuous improvement, internal recruitment has become a cornerstone for effectively filling vacancies. 

It also proves to be an essential resource for improving employee satisfaction, increasing their productivity and consolidating their long-term commitment. 

Therefore, in this article we invite you to take a closer look at the advantages and benefits of internal recruitment so that you can make the most of it.  

What is internal recruitment?

Internal recruitment is the process by which job vacancies are filled within a company with existing talent, i.e., new profiles are not recruited by increasing the workforce, but by promoting employees. 

This way of proceeding takes advantage of the company’s existing knowledge, makes training plans profitable and promotes professional growth that builds employee loyalty.

Thus, employees increase their commitment by seeing that they can opt for internal opportunities for lateral mobility, and hierarchical promotions or that they can participate in challenging projects that make them evolve professionally.  

Types and examples of internal sources of recruitment

Internal recruitment can come from 3 main sources within the company:

1. Hierarchical promotions. 

This is a vertical career growth within the company whereby an employee is promoted to a position of greater responsibility and hierarchy. 

This type of internal recruitment fosters employee loyalty and commitment and takes advantage of the knowledge acquired throughout their performance in the organization. 

An example of this would be how an HR assistant is promoted to HR manager by having successfully led inclusion initiatives in the company.

2. Horizontal transfers. 

In this case, the movement of talent is cross-functional rather than vertical. In other words, the person will remain at the same hierarchical level, but with different responsibilities. 

This allows them to gain experience in different areas and increase their employability by acquiring new skills.

It is a promotion that offers a quick solution to an urgent need and favors talent retention by allowing employees to face new challenges.

To illustrate this scenario, think of a customer service manager who is transferred to the product development department to improve the user experience by bringing his or her knowledge of customer needs and suggestions.

3. Professional development programs.

In this last modality, internal recruitment is done through proactive strategic training that improves the quality of a company’s talent through training, performance appraisal and mentoring. 

This is the case of an administrative secretary who participates in an internal leadership program to become an executive secretary. 

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Advantages and benefits of internal recruitment

Internal recruitment provides a series of benefits that can be strategic for your project, such as those listed below.

Resource savings

Using internal talent reduces the cost per hire and recruitment time since it requires virtually no investment in recruitment costs and allows you to improve the workforce of a company without increasing the headcount. 

In the same vein, you will save time, especially if you have implemented continuous assessment programs that facilitate the retention of appropriately segmented and updated internal talent.

Optimize productivity

Since the new vacancy will be filled by an employee familiar with the company’s organizational culture and processes, all that part of onboarding will not be necessary. In addition, the company’s culture will be reinforced. 

On the other hand, the company knows the employee’s way of working, which will reduce the learning curve of their new responsibilities by being able to adjust their training process more accurately.

Increased engagement

When employees feel valued and see that they can thrive within the organization, they strengthen their attachment and stay motivated. 

Keep in mind that engagement is closely linked to a company’s productivity and competitiveness. 

Risk reduction

Undoubtedly, if you promote an employee whose performance and relationship with the company you know, you are avoiding the uncertainty caused by new hires. 

At the same time, you are going to favor the reduction of turnover rate and avoid the employee flight risk that, if it is high, can jeopardize the continuity of your project.

Career development in the company

By promoting the development of professional careers in the company, you will improve the employee experience, one of the great values in Human Resources Management, since it increases the commitment and performance of the teams, and reduces absenteeism.

Disadvantages of internal hiring

Relying solely on internal talent is not advisable in the sense that it can restrict the entry of fresh, innovative and disruptive ideas into the company, which tend to come largely from external candidates.

Likewise, it can fuel an overly competitive climate and create resentment among employees, especially if the necessary transparency is lacking. 

Another aspect to consider beforehand is that internal promotion creates a vacancy in the evolved person’s position, so it is essential to analyze the repercussions proactively to calculate the full implications of the process.

Hiring internal vs. external, which is better?

To an absolute degree, keep in mind that there is no one recruitment better than another, because in each case you must evaluate different factors such as:

• Need. When there is an urgent need to fill a position in a company, internal recruitment is more efficient, especially if it has fostered polyvalence in the organization. 
• Specialization. If what the organization needs are highly qualified profiles to play strategic or leadership roles, it is common to focus recruitment on attracting external talent that also has experience. 
• Productivity. Some theoretical studies, such as the Prisoner’s Dilemma Theory, show that recruiting exclusively internally can reduce employee productivity. On the other hand, if they have to face external pressures, embodied in competitive profiles, they would increase it.
• Innovation. In highly competitive environments, external profiles, by introducing new ideas and procedures, boost the creativity of teams and make them more dynamic. 
• Investment in training. Companies with solid training and qualification programs have an updated and high-quality internal talent pool.

How to develop a successful internal recruitment strategy?

If you want to enhance internal recruitment in your organization, be transparent, invest in training and development, seek balance with external recruitment, and conduct regular performance evaluations to detect the potential of your employees. 

In short, foster a culture of growth and ensure that processes are fair, transparent and secure. 

To help you achieve this, Smowltech has developed innovative proctoring plans that adapt to each type of project. 

If you ask for a free demo (it will only take a few minutes), we will be able to take you on a virtual tour where we will talk to you about the solutions that can boost your remote recruiting strategies.

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