You’ve been here before. You post a job opening and are flooded with applicants, both internal and external. Now, you’re faced with deciding whether to bring in someone new or promote from within. How can you best approach the possibility of hiring an internal candidate?
Positives and Pitfalls
Hiring internally can make sense for a number of reasons. The individual is already a known quantity, giving hiring managers a deeper sense of their personality, capabilities, interests, and performance, as well as how well they fit culturally with the organization. External hires often cost more, whether in terms of actual salary or just in terms of hiring and training time. Perhaps most importantly in today’s market, a track record of internal hiring can signal to other employees that there are opportunities to grow and advance without leaving. One study found that 73% of employees today want to hear about internal opportunities, but employees without a clear sense of career path are 61% more likely to exit the organization.
On the other hand, filling a role internally can come with its own set of challenges. Rejected internal candidates may have an array of negative and counter-productive reactions to losing out on the role, especially when a colleague is chosen instead of them. A variety of studies have addressed these pitfalls, with a variety of results noted:
- Rejected internal candidates are almost twice as likely to leave their organizations, compared with successful internal candidates or those who did not even apply for an internal job.
- Rejected internal candidates have reported lower job satisfaction and reduced commitment or loyalty to the organization.
- Rejected internal candidates are more likely to develop a sense of envy towards successful internal candidates, with potential negative consequences on both performance and team relationships.
Vetting Internal Candidates
Evaluating internal candidates for a new role starts with many of the same elements as evaluating external candidates. Do their skills align well with the role? Are you satisfied with their interview questions, if they proceed to that stage? How well would they fit with the new team?
When vetting someone already in your organization, though, the questions may end up taking on a different perspective. Your company already has a record of a candidate’s recent performance, with firsthand knowledge of how they fit on one of your teams. However, it’s also important to not be hemmed in by these perceptions, and strive to evaluate them and their potential outside of what they’re currently “known for” in the organization, particularly if they’re applying for a job that is perhaps a little outside of their current niche.
It’s also important to consider how the candidates perceive the vetting and hiring process. One Cornell study uncovered a couple of key findings that can help reduce the risk of turnover or poor performance by rejected internal candidates. First, candidates who were rejected had a much lower risk of leaving the company if they were actually interviewed by the hiring manager, rather than being rejected without an interview. Second, rejected internal candidates were often found to be applying not out of passion for a specific role, but out of a broader interest in advancing; offering clear career paths and alternatives can also reduce the risk of negative fallout from an unsuccessful internal application.
Partnering with an external search firm can help to streamline the process while also, hopefully, removing some of the emotional stress. When a search firm is involved, rather than the whole hiring journey being handled by the in-house team, it can allow candidates to view the process as more unbiased. This arrangement may help to alleviate some of the negative feelings on the part of rejected candidates, since they can direct their frustrations at the search firm rather than feeling personally rejected by their own organization.
Comparing External and Internal Candidates
When it comes time to make the final decision, which questions should be part of the comparison between your internal and external candidates? There’s no one right or wrong answer; every role and every search are a little bit different. As you make your decision, however, a handful of questions may be helpful to consider:
- What are the priorities for the role?
- Do you imagine the role as a “transformative” one?
- How quickly will the person in this role need to be “up to speed” on company culture?
- If applicable, how do the candidates measure up on quantitative evaluation factors?
- What is your organization’s track record on internal career pathing?
Ultimately, internal candidates can be remarkably successful for your organization. Hiring from within can reduce hiring costs and training time, reward dedication, and demonstrate that your organization is committed to advancing the careers of its employees. As with any hiring decision, it must be made with care and full awareness of the unique facts of each role, but it’s certainly something that should weigh heavily in the decision-making process.
By Ruben Moreno
About the Author
After a 25-year career in Corporate Human Resources and HR Executive Search, Ruben Moreno and his two partners co-founded Blue Rock Search based on a simple but ambitious vision of creating a firm that would “Change Lives and Organizations One Relationship at a Time.” Ruben leads the Blue Rock HR and Diversity Executive Search practice specializing in the identification, assessment, recruitment, and onboarding of Chief HR Officers and Chief Diversity Officers and their respective teams — inclusive of leaders in Talent Acquisition, Total Rewards, HRBP’s, Learning & OD, HR Technology, HR Operations, and HR Analytics. Ruben has helped place hundreds of HR Executives and built deep relationships within the CHRO community across multiple industry verticals. His clients consider him a trusted partner who takes the time to understand their business and add value beyond executive search.