When a position in your own recruitment agency opens up it can be a real challenge to fill it with the right person.

Every applicant for the role brings a unique set of skills and experience. It can be difficult to decide which candidate will be the right fit.

One way of going about this hiring process is internal recruitment. Internal recruitment ensures the candidate you pick is right for the role and enables talent progression within an organisation.

But what is internal recruitment? And what are its advantages and disadvantages? Read on to find out more.

What is Internal Recruitment?

When an organisation needs to hire someone to fill an open position, they have two choices: internal recruitment, and external recruitment.

Internal recruitment is promoting or hiring an existing employee from within the organisation to fill the open position. Even if you don’t fill the position with one of your current employees, you still give internal candidates priority before you look outside of your organisation.

External recruitment, on the other hand, aims to hire a candidate from outside the organisation. This can result in a more diverse range of candidates.

There are a few reasons why a recruitment agency may choose internal recruitment over external recruitment. One reason is an observation that external hires tend to get laid off more often than internal recruits.

When deciding which hiring process to use it’s important to weigh up the pros and cons. Let’s look at some of the advantages and disadvantages of internal recruitment.

6 Major Advantages of Internal Recruitment

There are quite a few advantages to recruiting internally within your recruitment agency. These advantages can be beneficial to both your agency and its recruitment metrics. Here are some of the key advantages-

1. You’re Already Familiar with the Candidate

This is one of the main advantages of internal recruitment. Hiring internally means that the candidates are already known to you. You will already know that the candidate will fit in with the company culture no matter what position they fill.

Hiring or promoting employees who already work for your recruitment agency means that you have already assessed their strengths and weaknesses and you’re already familiar with how they carry out their work.

Since the candidate is already in your agency’s HR management system, managers can quickly and easily access the candidate’s track record and other information.

2. Shortens Onboarding Time

It will take less time and resources to onboard a candidate who was hired or promoted to a position internally. This is because the existing employee should already be familiar with the practices, systems, and culture of your recruitment agency.

The employee can bring the experience they’ve gained at your agency to their new role, even if it’s in a different team or department. This employee’s learning curve will be shorter than a candidate hired externally as the new employee will need to be taught from the ground up.

By hiring internally, you won’t have to spend weeks explaining company systems, workflow meaning, or behaviour expectations. The internal hire will already be familiar with these things and fit in well with the company culture.

3. Saves Time

Hiring internally can save an organisation a lot of time.

We already mentioned above how internal recruitment can streamline onboarding which saves time for both the employee and the organisation. An existing employee can also start a new role quickly without having to give a long notice period.

The time it takes to interview candidates is also shorter than interviewing external candidates.

You can save time since they don’t have to post job advertisements, promote the position externally, or set up a toll-free telephone number. This makes admin easier and improves efficiency.

It’s way faster to communicate internally using all types of communication channels available to tell employees about the position and what the responsibilities and details of the new position are.

Since candidates have already been screened and are familiar with company culture, you save time and can fill positions quickly.

4. Saves Money

Hiring externally is more costly to your recruitment agency. By hiring internally, you use fewer resources finding and training staff or hiring managers. Your agency saves money that would be used on conducting external recruiting and setting up job fairs.

Other costs that you save on by hiring internally include money spent on advertising on job boards and via other recruitment channels as well as necessary hiring procedures such as background checks.

In addition, when you hire an internal candidate you don’t have to budget for purchasing new software, providing training, or allocating desk space. However, these are some of the things you would need to do for an externally hired candidate.

5. Emphasises Opportunities for Growth

By promoting existing employees to higher positions, you highlight your recruitment agency’s commitment and investment in its employees. It enables you to retain your most talented employees whilst also clearly showing a path of progression within the company.

Employee morale is boosted as employees are inspired by the prospect of future career growth.

Investing in your employees will also improve engagement and performance, both of which are benefits to your business. Investing in employees as part of your brand leads good things to happen.

This benefit doesn’t just extend internally as positive work culture and internal growth send a message to job seekers that working for you has long-term benefits.

These qualities are really important for attracting Gen Z to the workforce.

6. Retains Strong Employees

Continuing on from the point above, internal recruitment is also a great way to ensure employee retention and loyalty. By offering career growth and development employees will want to stay with your agency rather than seek employment elsewhere.

Promoting qualified employees is one of the best ways to reward strong work and reduce employee turnover. Promotion can also come along with small rewards such as gift cards, free educational courses, or company merchandise like quality t-shirts with custom prints, although if you want to recognize your best employees, choosing an award from a wide range of glass awards would be a great way of showing recognition and the value an employee brings to the company.

It also has the added benefit of positioning your best employees to have a bigger impact on your business.

Creating a culture of growth and employee investment benefits your organization. Promotions are one method with other ways encouraging exercise in the office also an o

Top 4 Disadvantages of Internal Recruitment

While the advantages and benefits of internal recruitment shouldn’t be ignored, there are some downsides. Here are some of the disadvantages of internal recruitment-

1. A Negative Effect on Other Employees

Internal recruitment may have a negative effect on other employees, particularly those who applied for the open position but weren’t successful. This can cause hard feelings, resentment, and a lack of respect.

These co-workers may also have a tough time adjusting to the new shift in roles and responsibilities.

This can lead to a breaking down of effective communication in the workplace.

Employees could become less engaged in their work and feel less job satisfaction. They may even become open to seeking a job elsewhere because they had been overlooked for a promotion.

This problem could extend to even remote teams. One solution is maintaining an atmosphere of transparency throughout the recruitment process.

2. Reduced Talent Pool

By only looking internally, the pool of possible candidates is greatly reduced. Existing employees may be the best fit sometimes, but other times an external perspective with new skills and ideas may be preferable.

A talented internal candidate will not necessarily thrive in a new role. Their skills and knowledge may not translate and the change of position could hurt their attitude and behaviour. You may also need to provide additional training whereas you could’ve hired an external candidate who already had the required knowledge and skills of the position.

Putting a freeze on external hiring may not always be the best solution for your company.

3. Creates Another Gap Elsewhere

By taking an employee out of one position and placing them in another, it may result in another open position elsewhere. You could use internal recruitment to fill that position but then you would have yet another gap.

You may have to eventually turn to external recruitment which has costs time and money.

4. Can Cause Bias Concerns

Biases can be a concern when hiring internally. It’s hard for recruiters to choose candidates fairly and objectively when the candidates are known to them.

These biases could be implicit or explicit, but either way, they may cause prejudice for or against a candidate. If this occurs then the best employee for the job may not get it.

So Should You Recruit Internally?

Internal recruitment can be incredibly beneficial for a recruitment agency and its employees. This is because you are already aware of the candidates, time is saved hiring and onboarding them, costs are reduced, and it promotes employee growth and retention.

Nevertheless, the downsides shouldn’t be ignored too. Negatively impacting employees who weren’t chosen, reducing the talent pool, causing gaps in the organisation and so on can have a strongly negative impact on your agency.

When planning for a peak hiring season the key is to not solely rely on either recruitment process. You should try to strike a balance between hiring internally and externally, and not limit their options for the sake of internal employee progression.

Written by–

Jessica Day

Jessica Day is the Senior Director for Marketing Strategy at Dialpad, a modern business communications platform and one of the top unified communications providers that take every kind of conversation to the next level—turning conversations into opportunities. Jessica is an expert in collaborating with multifunctional teams to execute and optimize marketing efforts, for both company and client campaigns.