Familiarity Breeds Success – Why and How to use Internal Hiring

It’s no secret: Hiring can be expensive.

Whether replacing an employee or creating a new position, the costs mount quickly… and not just in money, but time as well. With advertising for the position, sifting through resumes, testing, interviewing, negotiating, completing paperwork and training, the process can be lengthy.

Cutting Costs, Hiring Smart
Fortunately, there’s a good way to reduce those costs: Internal Hiring. By hiring from inside your organization, you can pick candidates that already know your company, who have a documented history of performance and have passed your basic employee screening process. In addition, you’ll likely have an experienced employee excited to face a new challenge.

How Do you Hire from Within?
Here’s a basic idea of what steps to take in the process:

1. If you don’t have one already, create an internal recruitment policy for the company. It should contain:
   1. Information about what an employee can expect during the promotion process.
   2. Any rules about how long the employee might have to continue working in their current position.
   3. Tips about how to advance to other positions.
2. Develop a standardized job posting system. Will the opportunity be posted in the break room? In an email to all employees? Posted on the company Intranet?
3. Screen. While it’s nice that you probably have some resources for that at hand, such as an employee file containing information about past performance, you still might need to do testing to make sure the candidate can meet the new demands of the potential position.
4. Interview. The candidate may have new managers and will need to be interviewed by them.
5. Offer training. Whoever gets the position might need some to “get up to speed.” Knowledge and skills tests are a good place to start in order to identify and target areas that need improvement.

The Risks of Internal Hiring
If you choose to follow this path, here are some issues to keep in mind:

• It will limit the number of applicants for the position.
• EEOC issues may be raised if the internal source of candidates is less diverse than external sources.
• The chosen candidate may decide to reject the offer.
• It may cause resentment among candidates who are not selected for the position.
• It may restrict the introduction of new ideas into your organization.
• An open position will be created due to the internal candidate by placed in a different position.

Obviously, hiring from within has certain risks—as does hiring from external sources. However, you can reap many benefits by dealing with more known quantities. Your employees will be grateful that you offer opportunities for career growth, and you may save a great deal of time and money.