The Shift in the Hiring Process from External to Internal


Your hiring strategy is an important strategy that keeps the cogs of your organization moving. And, hiring the right people will help you grow and move the organization forward expertly and innovatively. But when you hear hiring or recruitment, you first think of getting an entirely new employee. That does not necessarily have to be the case. Sometimes the best-suited talent that the job requires may already be working for your organization.


Internal Recruitment is an occasionally overlooked but extremely beneficial practice. It would easily save costs and time by recruiting internally. Studies show that compared to an external recruit, the starting salary of an internal recruit is 18-20% lower. But that is just money talk. There are other reasons why Internal Recruitment is beneficial that outweighs the monetary benefits.


Employee Motivation

Once the precedent is set for internal recruitment and such a culture is built, your employees will be automatically incentivized to stay motivated to put in the effort for promotion. Looking externally for senior or leadership positions can disincentivize top performers who feel they deserve to be next in line. A study by LinkedIn found that 24% of employees who sought a job change wished to do so because of being overlooked for a promotion by their current employer. During the era of the “Great Resignation”, creating more opportunities for internal mobility can vastly increase employee loyalty.


Developing and Upskilling the Workforce

Boredom is another huge deterrent for employee demotivation. According to a study by Udemy, 46% of respondents cited the lack of opportunities to learn new skills as the biggest reason for them to leave a job. The second biggest reason is unchallenging work. It is often forgotten nowadays that an employee-employer relationship is not limited to being transactional. We as humans are not programmed to be in a rut for a very long period. Especially for millennials, if there is no opportunity for upskilling and growth, they will seldom stay.


Cross-Disciplinary Knowledge Sharing

When looking for talent in your organization, it is understood without saying that the scope includes all the other departments. The function in which a particular person works should not stand against them in your consideration. People have multiple talents and interests. Maybe the sales rep is also a proficient writer. When a content marketing position opens up, who better to look for than somebody who knows the value proposition like the sales representative. This is one way of effectively breaking down silos within an organization, where multiple functions come together for a unified goal.


Better Performance

When all of this is said and done, at the end of the day, the question remains – Who is the better hire? An internal recruit or an external hire? With an internal recruit, there is of course no need for onboarding and induction. They will still need training for the new position but they have a much lower learning curve as they may already be familiar with the business. A study by Wharton School of Business revealed that while an external hire will incur higher salaries, they also show lower scores on performance reviews. This of course may also be due to the learning curve. There is also a work culture to consider as well. An internal  hire is already a cultural fit.