The Pros and Cons of Internal Recruitment - Advance Career

Annie Papadopoulou

Advice, Pros and Cons of internal Recruitment, Recruitment Mar 1, 2024 0

Internal recruitment is happening when a company decides to fill a job opening by choosing someone who already works there. It is like giving someone in the team a chance to step up to a new role within the same company. Advance Career, as a recruitment agency based in Cyprus, have seen this happen quite often. Today, in this blog post we want to dive into the pros and cons of this approach.

Internal recruitment sounds simple, right? Well, it can be, but there’s more to it than meets the eye. Let’s take a closer look at why companies choose to hire from within, and what challenges they might face along the way. By understanding both sides of the coin, we can get a clearer picture of how internal recruitment really works.

The Pros of Internal Recruitment

There are many reasons a company decides to hire internally instead of going through a longer recruitment process to hiring externally. Some other important benefits are:

Right fit for company culture: Hiring managers know that internal candidates will not have any problem adjusting to the company culture because they are already working there. Apart from the company’s culture, they are familiar with company values, and operational dynamics. This familiarity can facilitate a smoother transition into the new role, minimising the learning curve and accelerating productivity.

Cost-effectiveness: As it was mentioned earlier, hiring externally can be a lengthy process but also a more expensive procedure. Internal recruitment can often be more cost-effective than external hiring processes. It reduces costs associated with advertising vacancies, conducting extensive interviews, and onboarding procedures. Moreover, if we look at it in a more holistic perspective internal candidates may require less training, optimising resource allocation.

Improvement of employee engagement and retention: Many employees leave their jobs because they feel that there is no room for further development. If their workplace is hiring internally and gives opportunities for promotion, employees will work more effectively to be able to grow and succeed in getting a higher position, minimising employee turnover. Apart from that, this is a loyalty boost for many employees, helping the company again to improve turnover.

Keeping institutional knowledge: This may not be important for every organisation, but by keeping the same employees are holding strong knowledge of organisational procedures. Hiring internally can minimise the information that can reach their competitors.

The pros of hiring internally sound really important at first glance, but even if it is a faster and cost effective way, companies should be very careful with how they are handling internal candidates.

The Cons of Hiring Internally

We already mentioned the cons of hiring internally, but we should also mention the many challenging aspects of this hiring process companies should consider before going ahead with it.

According to Forbes, one of the most challenging parts is to inform the other internal candidates that did not get the position. With external candidates the process of rejection seems more simple, but with current employees the process should be more delicate. Companies should give constructive feedback and support these candidates to develop the necessary skills to receive a promotion or a different position in the future. Apart from this, there are other challenging aspects companies should consider:

Limited talent pool: Relying solely on internal recruitment may restrict access to diverse perspectives and skill sets. This limitation can prevent innovation and minimise the introduction of fresh ideas. A homogeneous workforce may also stagnate creativity and hinder competitiveness in dynamic markets.

Moreover, dealing with a limited talent pool, it means that the hiring department is keeping a clear track of potential candidates when the job opening will occur. This puts a lot of pressure on employees. Also, the company will not have the opportunity to find a person more qualified and fitting for the position externally.

Competition and Conflicts: If employees feel that they are constantly being monitored and they are competing for the same positions, it can create a toxic environment that may influence the company culture negatively. Internal recruitment decisions can breed resentment or animosity among employees who feel overlooked or unfairly passed over for promotion. In this scenario, employees may decide to look for employment elsewhere, just because they feel that the company was unfaired to them.

Lack of creativity: hiring for years for your existing employees may cause a lack of creative ideas and innovation, as these groups of people are exposed to the same ideas and functions. Hiring externally can bring new ideas to the company, and help it improve and face competition in a more efficient way.

It is safe to say that companies should combine external and internal hiring to positions and individuals they consider fitting. Furthermore, companies should aim to sustain healthy competition between their employees and avoid creating tension for conflicts that can hurt the company in the future.

Final Thoughts

Internal recruitment offers significant advantages such as cultural alignment, cost-effectiveness, and improvement of employee engagement; it also presents challenges related to talent diversity, interpersonal dynamics, and innovation. Striking a balance between internal promotion and external talent acquisition is imperative for fostering a dynamic and sustainable workforce capable of driving organisational success in the long term.

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