Internal recruitment is when an organization fills an available role with an existing employee rather than an external candidate. Included below are some examples of internal recruitment.

• Promotions: Where an employee moves into a more senior role—usually with more responsibilities and potentially higher pay.
• Transfers: Where an employee is moved to a different location, with or without a promotion.
• Temporary to full-time transitions: Where temporary employees—such as trainees— become full-time employees.
• Employee referrals: Where existing employees refer qualified candidates for the role.
• Lateral role change or reorganization: Where an employee is moved into a different role that better suits their skills and knowledge, or as a result of an organizational restructure.

Why Should You Recruit Internally?

Recruiting from your existing workforce offers several advantages over hiring externally.

Less onboarding required

Gallup research indicates that new recruits take an average of 12 months to reach their full potential in a role. This time is reduced by hiring internally.

Existing employees already have a good understanding of the organization and its policies and procedures. Internal recruitment retains this institutional knowledge, which cuts down the amount of general onboarding required. Instead, onboarding can focus on any specific technical training the employee needs.

Familiarity with company culture

Cultural fit is an important consideration when hiring a new employee. When the values, beliefs, and attitudes of a company and employees align, collaboration and job satisfaction—and, therefore, productivity—increase. A poor cultural fit can be costly to an organization, especially if the new employee leaves as a result and needs to be replaced.

By recruiting from within your organization, you can hire employees who you know are a good fit with your company culture.

Demonstrates opportunity for career growth

The Work Institute’s annual Retention Report in 2022 cited decisions relating to careers—including opportunities for better career development, a career change, or a  promotion—as the top reasons why employees leave a job.

By internally posting job ads, you show your employees that promotional pathways exist within the organization. Providing this opportunity for career development demonstrates you value your employees. This can help to increase employee loyalty and engagement, which can be beneficial for improving retention.

Reliability of hires

When hiring internally, you are often already familiar with an employee’s prior experience and work achievements. It’s also easier to verify work references when compared to external recruitment. You can speak directly to the employee’s current supervisor to get any information you need that is relevant to the recruitment process.

Saves time and money

Hiring internally can save you time and money. You don’t typically need to go through as many steps in the hiring process for an internal hire. These steps also tend to be quicker and easier than for external candidates—such as conducting background checks. Notice periods can also be shortened by agreement between departments.

Posting a job internally avoids the overheads of external recruitment, such as recruiter fees or external advertising costs.

Disadvantages of Internal Recruitment

It’s not always suitable to advertise a role internally. Here are some disadvantages of internal recruitment to consider.

Risk of internal politics

You need to manage an internal recruitment process carefully to avoid any company politics arising. Employees who feel overlooked for a role may develop resentment towards the organization. This can affect employee morale and eventually company culture.

Internal recruitment can also cause issues between departments—for example, if one manager perceives another department as “stealing” their employee.

To avoid these issues, ensure you have a clear internal recruitment policy and transparently manage your internal recruitment processes. You should also try to create a positive culture around internal recruitment and focus on the benefits for the overall organization.

May limit the candidate pool

Your current employees don’t always have the specialized knowledge or skills needed for a new role. As a result, you may end up putting someone in the role who isn’t the best fit.

External recruitment allows you to target candidates with the necessary specialized knowledge and skills. It also gives you access to a diverse pool of candidates and allows you to bring fresh ideas and perspectives into the organization.

If you do hire internally, you need to be prepared to provide the employee with the necessary technical training to address any skill shortages they may have.

Creates gaps in your workforce

Internal recruitment creates a need to backfill an employee’s previous role. This generates additional hiring processes and can lead to workforce “musical chairs” as you move employees around to fill roles.

Internal vs. external recruitment

Both internal and external recruitment approaches have their respective pros and cons. The two are not mutually exclusive and you can choose the type that suits each role you’re looking to recruit for.

For example, suppose you need someone with specific technical skills that your existing workforce doesn’t have, but you don’t have the time to run the recruitment process yourself. In that case, hiring externally via a recruiter may be more appropriate.

If you need to fill a role quickly or for a short period, posting an internal job ad allows you to find someone who is already familiar with the organization and can hit the ground running.

You can also use a mix of internal and external recruitment practices when hiring for a role to widen the candidate pool.

Tips for Internal Recruitment

Develop an internal recruitment policy

This sets out any rules around internal promotions or transfers—for example, the minimum length of time an employee must be at the organization before they can apply for another internal role.

A clear internal recruitment policy can help minimize the risk of any internal politics arising during the process.

Design a clear process

Develop a step-by-step process for your internal recruitment, including how internal positions will be advertised and who is involved in the decision-making. Doing so before starting any internal recruitment processes ensures they are fair and transparent.

Promote the role widely

The best starting point for promoting opportunities within your organization is with an internal job posting. You can then distribute this widely across the organization’s intranet and internal job board, as well as via a company-wide email or employee newsletter.

Word of mouth is also an excellent way to promote internal job opportunities. Let managers know about available roles so they can promote them within their team.

Use an Applicant Tracking System

An Applicant Tracking System (ATS) allows you to register, sort, and track applicants for a particular role. Using an ATS to manage your hiring process saves you time and money— when compared to doing it manually—and ensures you don’t overlook any candidates.

Comprehensively screen employees

While you may be familiar with an existing employee’s background, it’s still important to screen them in the same way you would an external candidate. This contributes to a fair internal recruitment process.

Give your employees feedback

Providing unsuccessful candidates with specific and timely feedback on the process and their application is essential. This ensures a positive applicant experience and can help employees to understand how the process was conducted transparently. It also communicates your interest in supporting their ongoing career progression.

Conclusion

Internal recruitment involves filling vacancies within your organization with current employees, rather than external candidates. This approach can save you time and money compared to external recruitment and helps you to fill a role with someone already familiar with your organization’s culture, policies, and practices.

However internal recruitment can also create friction between employees—especially with unsuccessful applicants. For these reasons, it’s essential to develop a clear internal recruitment policy to ensure your process is transparent and fair.