Hiring for a new or recently opened position can be a complicated and stressful process.

A lot of effort goes into attracting, vetting, interviewing, and ultimately securing a candidate for the job. Even after all that, sometimes you end up with a candidate who isn’t a good fit, and the process starts all over again. It’s time-consuming and costly, and when you’re hiring a stranger, it can be a crapshoot.

Internal recruitment, on the other hand, takes the guesswork (and much of the cost) out of the hiring process. So what is internal hiring and how does it work? There are a few advantages of using internal sources for recruitment. It’s a hiring strategy that helps you avoid many of the pitfalls and disadvantages of traditional external recruiting and fill your vacancies much faster. That’s why it’s important to look internally within your organization as much as any other recruiting channel—you could have fully qualified, talented, and reliable candidates just a few desks away.

If you’ve struggled with traditional hiring in the past, it may be time to build an internal recruitment process. Take a look at what internal hiring is and how internal hiring works as well as the six biggest benefits of this strategy, and see if it could help your organization.

What Is Internal Hiring?

Internal hiring simply refers to the process of hiring someone from within your existing business structure to fill a vacant position for your company. Some of the main types of internal hiring include promotions, transfers, employee referrals, and moving temporary employees to full-time positions. Setting up a hiring system for internal candidates can make your job much easier and cut down on your time filling vacant positions.

How Does Internal Hiring Work?

In order to hire internally, you need to know what internal hiring is and have an established process for internal candidates. A one-size-fits-all solution for job applicants, both internal and external, won’t work when it comes to internal hiring. Before you start handpicking your next hire, make sure you:

• Establish who will make hiring and job posting decisions.
• Outline a policy for how to post job positions.
• Create an internal hiring policy.
• Use an Application Tracking System to keep track of candidates throughout the hiring process.
• Let employees know about open positions. This could be through email, internal newsletters, internal job boards, or chatting with managers.
• Provide details of the job description. Even if you hire internally you want to make sure you get the best applicants for the position.
• Screen candidates. Hold internal candidates to the same standard as external candidates.
• Promote employees fairly by maintaining transparency throughout the process.
• Provide feedback to applicants who didn’t get the job on what skills may help them qualify in the future. Don’t send them a generic rejection letter.

With a solid understanding of how internal hiring works, you can find the best internal candidates to fill your position and create a streamlined approach for how to handle your internal hiring process. Here are the six biggest benefits of internal recruiting to consider.

6 Advantages of Internal Recruitment

#1 You Already Know Internal Candidates

External candidates for a job come with a significant amount of risk.

Even when they come highly recommended from reliable sources, there’s still a chance that they’re not going to measure up, stick around, or fit the culture. According to a CareerBuilder survey, the average cost of a bad hire can be as much as $11,000 in small businesses (fewer than 500 employees) and up to $24,000 in large businesses (more than 1000 employees).

Mis-hiring is a common—and expensive—problem, and many companies have higher turnover rates as a result.

Even the best interview questions or the most thorough reference checks can’t always solve this problem, as it’s hard to get a feel for how someone performs without actually putting them to work. In many situations, the only way to truly put their performance as an employee to the test is to give them the job and put them on the payroll. And if they don’t meet expectations, you have yourself a mis-hire.

Hiring internally doesn’t carry the same level of risk. While you may never have seen the given employee doing that specific job before, you have seen that employee work within your organization. You have firsthand knowledge of how they perform, how they fit into the company culture, how they handle conflicts and problems, and so on, which means you can be confident in whom you’re hiring.

#2 In-House Recruitment Costs Less to Hire

A major benefit of hiring internally is that not only do you avoid a lot of the cost and risk of a bad hire, but you also save on other costs during the onboarding processes. Internal hiring reduces cost because you don’t have to post—and pay for—adds on job boards, use resume databases to find employees, or pay for background checks on internal hires. Presumably, if your internal hires needed a background check, they should already have one.

Saving costs on sourcing your next employee and reducing your risk of losing them because they’re not a good cultural fit are all reduced by using internal recruiting for your next position.

#3 Internal Candidates Already Know the Company

Likewise, internal candidates already know whether or not they like the company—they’ve already decided whether or not it’s worth sticking around. If they’re applying for an internal position, it’s usually a sign that they’re willing to invest more career time into your organization. Otherwise, they would be applying for jobs elsewhere.

This means you’re less likely to have to replace them soon after hiring because the job, the team, or the organization wasn’t what they expected.

It also means you’ll spend less time on training and onboarding because the candidate is already familiar with some or all of the systems they’ll be using in their new position. (Note: We said less time on onboarding, not no time on onboarding. It’s still important to onboard your internal hires!)

#4 Internal Candidates Are Easier to Find

Recruiting externally requires a great deal of searching. Putting lines in the water via different channels can be tedious and time-consuming. You may have to sift through dozens or even hundreds of applications, just to find a small handful of candidates that might fit. Or worse, you may not attract any applicants and therefore never find the right candidate.

In-house recruitment, however, can be much easier.

You can broadcast the open position to the whole company in minutes if you choose; then, interested employees know where to take their resume and information if they want to apply. While you may still see some unqualified candidates and have to do a little sifting, your options are usually far better, and the applications come in with much less effort.

#5 In-House Recruitment Boosts Company Loyalty and Engagement

Most importantly, internal recruiting is crucial for morale and engagement.

Your employees want opportunities for growth, learning, and progress. As they continue to work for your organization, they will be looking for ways to move up—to increase their status, to better their pay, and to expand upon their current talents and responsibilities. Hiring from within your workforce is one way to provide such opportunities.

#6. Hiring Internally Reduces Hire Time

Hiring a new employee is time-consuming. External recruiting requires hours of posting jobs and sorting through dozens, if not hundreds, of resumes until you find a handful of promising applicants. Once you’ve found them you must interview, evaluate, and extend them an offer to work for your company. It’s a time-consuming process to hire an employee you can only hope works out.

Internal candidates are easier and quicker to find because they’re already in your office space or organization. The time to contact and assess them for the position is faster because you can easily reach out to them, get manager feedback, and check their employee performance. You may not even need to conduct a full interview if you are already familiar with the employee. Plus, you’ve already had time to assess their cultural fit because they already work for your organization.

Conclusion

Hiring is an important part of an HR professional’s job, and doing it right takes a great deal of effort. While some external hiring will always be necessary, taking the time to build an effective internal recruitment process can really pay off in the long run.