Getting the right staff for the job can take a lot of hard work as well as cost companies thousands of pounds in recruitment. Internal recruitment can seem like the easy answer to many staffing issues. After all, you already have the employees on board, you know how they work, what their strengths and weaknesses are plus it makes the process quicker and reduces external recruitment costs. 

But stop. Before you take the internal recruitment route, it’s important to consider what impact this will have on your business and whether it is genuinely the right route for you. Will you really get the best person for the job, or could there be someone out there who is better qualified? Will they be sufficiently motivated? How will their colleagues react? 

Internal recruitment can work brilliantly for some roles but for others, looking outside your existing team will be the answer. Before you decide which route to take, consider the best options for your business.

Disadvantages

1. Can create conflict amongst colleagues 

Opening up a role to internal employees can have a negative impact on morale. If you already have someone in mind, other staff who apply for the role can feel like you’re simply paying them lip service and not recognising their hard work.

It might seem like a minor issue but if staff feel disgruntled and this reduces team morale than your business can really suffer. According to research, companies with low employee engagement experienced 18% lower productivity and 16% lower profitability – if there is a risk internal recruitment will reduce your employee engagement it could ultimately damage your bottom line. 

2. You could be limiting your choices

Recruiting internally might be quicker and easier and the employee will naturally already know your business practices. But you’re also severely limiting the talent pool from which to choose from. 

By throwing the net wider and recruiting from outside you could find a candidate who can add real value to your business and is actually far better qualified than the person you’re considering internally. Plus, it’s sometimes good to have a breath of fresh air in your business – someone who can bring in new ideas and new focus. If you already feel things internally are not very productive and morale is low, promoting internally is unlikely to bring about a change in perception. 

3. You’ll need to hire someone to replace the person you promote

On the face of it internal recruitment can seem quicker and easier but in promoting an existing employee you’ll then need to advertise to replace their job. In essence, you have to train two people up. If it’s a senior position and their existing experience in the company is of real benefit in stepping to up the new role, then it might be worth the risk. If it’s a similar role, it might simply be more expedient to recruit externally and train up the new person. 

Advantages

1. Recruitment costs are lower 

If budgets are tight, then hiring internally can save you money because you won’t need to employ recruitment agencies or advertise. A study by Oxford Economics revealed replacing members of staff can cost more than £30,000 per employee which includes the cost of lost output while replacing an employee, the recruitment costs and the cost of lost time while getting them up to full productivity. If you’re hiring internally, you will have someone who already knows the business and can hit the ground running, becoming fully productive in a much shorter period of time.

2. You know what you’re getting

People can give great interviews and then turn out to be terrible at the job. People also lie or embellish their CV and accomplishments. We’re not saying everyone does but it’s a risk! By recruiting internally, you already know how productive a person is and have a good record of their performance, especially if you’re using HR software to keep track of your staff. 

3. It can make you a more attractive employer

These days it’s not just about employing someone to do a job, it’s about creating an attractive employer brand so you attract and retain the best people. Part of that is giving staff the opportunity to progress. Indeed, in a Randstad survey on employer branding, career progression was one of the top three things workers look for in many sectors including IT, engineering, banking and leisure to name but a few.

Recruitment guide