The advantages and disadvantages of internal recruitment are really important things to understand if you're running a small business. After all, good recruitment is the lifeblood of your company. No matter what else you have in place, when it comes down to it your business is nothing without the team that runs it. In fact, that’s often the most rewarding part of growing a business: recruiting a fantastic team from the ground up.
But first of all, let's get clear on the basics.
What is external recruitment?
External recruitment is the more traditional hiring approach - it involves sourcing candidates from outside of your business, perhaps using online jobs boards or a recruitment agency to source candidates to put forward.
What is internal recruitment?
Internal recruitment, on the other hand, means searching within your own organisation in order to hire or promote current employees into a new role.
In this post, we’ll delve into the latter, showing you the positives and the pitfalls of hiring from within your existing talent pool.
What are the advantages of internal recruitment?
1. It helps you keep your best people
Promoting from within your own business sends a really strong message to the rest of your team. It tells them there are clear opportunities to advance within the company - that their time at work can be a career, rather than just a job.
You are far more likely to hold onto your best talent if they can see a clear path of progression within the organisation.
2. It’s less time, effort and money
External hiring is notoriously time-consuming, and it can be expensive too.
Our handy calculator gives an overview of the costs incurred when bringing someone new into the business. This can reach as much as £15,000 per hire if you take into consideration recruitment fees, new hardware and desk space.
One of the most obvious benefits of internal hiring is the reduction of these overheads, as well as the shorter time it takes to fill the position.
3. Shorter learning curve
Someone with a history of employment at your business will already have a solid grasp of your company’s working practices and processes. This should mean that the required learning time is significantly reduced compared to someone new joining the business.
An internal hire might even be able to turn their experiences from their previous role to your advantage, giving them crucial insights about how all the many components of your company fit together.
4. Proven cultural fit
Let’s not mince words. Two or three hours of interview time is rarely long enough to truly get to know someone. Every new hire you make has an element of risk attached to it - perhaps they are not quite the seamless cultural fit that you had hoped for.
With an internal hire, you already know the candidate. You know exactly how they approach their work and there won’t be any culture-surprises waiting in store for you.
What are the disadvantages of internal recruitment?
1. Beware the echo chamber
If you rely too heavily on promoting from within the business, then you do run the risk of your working practices stagnating. New ideas and fresh perspectives are more likely to come from outside of your company, rather than within.
Whenever a new employee joins the business, they give the company a fresh pair of eyes. They aren’t part of the internal ‘thought-bubble’, and can provide some incredibly valuable insights.
2. Fast-growing companies can’t always hire internally
For small companies - or companies with ambitious growth targets - internal recruitment may simply not be an option. There might just not be a wide enough pool of internal candidates to choose from, and rapid growth may leave companies with no choice but to search further afield.
Making a success of internal recruitment
Looking to make a success of internal recruitment? Here are a few tips to help that process run smoothly.
1. Clarity is your ally
Be crystal clear about what the hiring process will be, as well as sharing accurate and precise expectations for the successful candidate. This will make it easier if you have to turn down an internal applicant who might not be suitable yet - they will be able to see exactly what they need to do to in order to make a successful application in the future.
2. Invest in your staff, and reap the benefits later
Be prepared to put some learning and development budget aside for your team members. This will empower them to take training into their hands, and encourage them to identify areas they’d like to work on and improve.
This benefits the company on two levels - firstly, you help your staff become better at their jobs. Secondly, they are likely to feel happier and more engaged in their career at your company.
If you believe in someone's attitude and propensity to learn, then why not invest in them and their future in the company? Hiring internally for some roles, especially at a mid-level, can be beneficial for everyone involved.
While you will eventually have to seek talent from further afield, don’t forget to make the most of the talent that’s already in the room - your current team.
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