With the exception of entry-level positions, most organizations try to fill positions with current employees. The Internal Recruitment is the most favorite source of candidates in the stable and developed companies for a number of reasons, so it may not be the first choice for a new business still in its inception phase.
Internal recruiting is not better than external recruiting necessarily. Both the recruiting methods however have pros and cons, benefits and pitfalls that you should be aware of when deciding which recruitment method to focus your company around. Here is a quick look at some of the advantages of internal recruiting.
Internal recruiting first and foremost is less costly and quicker than an external search process for applicants. There is a considerably lesser need for advertising as all positions available are either posted on the company website or on bulletin boards in the office of the company. Since everything is done in-house it is easy for both the applicants and the HR department to carry out the process of recruitment.
Better knowledge of internal applicants
Another advantage to the firm is that Human Resource data is immediately available for any employee recruited internally. And even more importantly, the employee's work habits are known and previous performance appraisals are on record so it makes it easier to evaluate the applicant.
Requires a short induction training period
An internal recruit will be familiar with the firm. This employee will be familiar with the firm's products, clients, organizational policies, and corporate culture. As such, the firm might be able to save money by cutting down costs as orientation sessions for such an employee may not be necessary. The internal applicant will also assimilate faster into the position because the challenges that external applicants have off adjusting to corporate culture is non-existent.
Internal recruitment may lead to increased morale for employees as the organization is perceived to reward good performance or loyalty. The employees are not pressed to look for opportunities on the external job market. Often, one promotion leads to another vacant position and this chain effect contributes further to increased morale. It encourages healthy competition between employees driven strictly by performance and results.
The disadvantages to internal recruiting are very closely related to competition within the workplace which is understandable. So a lot of care must be taken by management to ensure that promotion from within is very fair and just with no favoritism occurring during the process. Here are some of the key disadvantages to internal recruiting.
Resistance to change
Continuity is not always such a good thing in the case of internal recruiting. If the organization has deiced to change its business strategy, for example, entrenched managers are probably not the "change masters" you want.
One theory of internal recruiting is that the approach simply self-perpetuates the old ways of doing things. This problem is popularly coined "Managerial in-breeding". Sometimes this resistance to change will come about as a result of a personal connection to the old method or process of doing things. Some managers do not want to see the work they started get altered or hanged by another person or authority.
Discontentment among employees
This is usually the biggest challenge among employees. No matter how hard management tries to make sure everyone has a fair shot at being promoted there will always be disgruntled employees who feel shafted or side-stepped. They never feel it has to do with the fact that this person who is getting promoted is perhaps a batter performer than they are. This usually affects productivity and morale in the short-term until the person becomes fully assimilated into the position and a new relationship is established.
Don't count on your employees being excited about everyone else's growth but encourage them to be excited because they also have the same opportunity.
Affirmative action goals are more difficult to achieve
Most companies battle with affirmative action goals and this task is made doubly difficult in a small company that uses internal recruiting as its primary recruiting method. To fulfill the quota for diversity candidates from within is tough if you already do not have enough staff from diverse backgrounds. In most cases the only real option is to recruit from outside sources.
Hard to do with rapid growth
The inertia states that an object in motion stays in motion. Another way of looking at this is if it isn't broken, don't try and fix it. In business momentum is precious, and when an organization is growing rapidly the last thing you want to do is mess up the synergy. Promoting from within during times of rapid growth can throw the synergy out of whack and put a halt on the regular proceedings. Try and stay away from internal recruiting during times of fast growth just because there is not enough time for people in new positions to fully assimilate and understand the requirements of their new positions.