Scroll Top
Advantages of hiring internally - Hiretrace

Advantages of hiring internally

When considering employee recruitment, the idea may often revolve around external hires. While there are benefits that external hiring brings, it’s important to note that there are also distinct advantages of hiring internally. In any organization, there may be ambitious employees who are looking for career progression. How about giving an opportunity to such employees? How can you as an organization aid the existing talent to grow within the organization?  This is when internal mobility comes in. 

Deciding whether to fill a job vacancy from within your company or externally can greatly impact the hiring process. Internal hiring is not time consuming and saves hiring costs whereas external hiring involves more time and costs. This article will look into the concept of hiring internally, explaining its definition and the advantages of hiring internally. By understanding what internal hiring is, the organizations can make decisions that line up with the company’s needs and goals. 

What does internal recruitment imply? 

Have you ever heard about the terms “internal recruitment” or “hiring internally”.? It is all about how organizations fill job vacancies or new positions by selecting individuals from their existing workforce. So, instead of looking for individuals from outside, companies consider referring to the current employees for new job openings because of the numerous advantages of hiring internally


Methods of internal hiring 

There are ways for companies to find people already working for them to fill job openings. This can include things like posting job opportunities within the company and asking current employees to recommend suitable people for positions. It’s a way for companies to make use of the talent they already have in their team and help employees grow in their careers within the company. Hiring internally could comprise any of the following methods. 

Employee transfers

Employee transfers mean when a worker moves from one branch of a company to another branch. This could be because the company needs them in a different place. This movement is usually done to address business requirements while offering a space for the employees to grow.


Promotions means moving an employee from their current job position to a higher-ranking position within the company. This method comes with increased pay, increments and responsibilities and is normally a way of acknowledging the employees’ contributions to the company. This could enhance employee satisfaction, increase workforce morale, and encourage employees to perform even better. 

     Staffing freelancers/ interns

This includes hiring freelancers and interns who have been working with the company temporarily into full-time employees. By bringing freelancers and interns on board as full-time employees, companies can benefit as it allows them to retain people who are already familiar with the company projects and operations. This method would ultimately reduce the time needed to train new hires. 


This is one of the methods that is quick and trustworthy. This involves hiring employees based on the recommendations from the existing employees. 

     Previous employees

Rehiring former employees can offer several advantages. When considering this method, it’s important to note that these individuals had already been part of your organization before, and as a result, they already have a level of familiarity with the company culture, procedures, and even some team members. This existing knowledge can result in quicker onboarding process and reduces training time, making it a better way to fill open positions. 

     Former applicants

This involves approaching candidates from within the organization’s existing talent pool database. Any organization could have a database of previous applicants who had shown interest in the company by applying for vacancies in the past or just submitting their applications when no specific openings were available. These candidates are considered internal staff because their details are already available in the company’s database. This allows the organizations to consider the applicants when new positions arise. This approach is often cost-effective as it avoids the need for lengthy external advertising procedures. Additionally, previous applicants are more likely to have a positive impression regarding the organization, which can lead to a higher success rate when hiring them again. 


How to facilitate the internal recruitment process?

The process of filling job vacancies with existing employees plays a key role in an organization’s talent management strategy. To ensure a smooth and effective hiring process, it is necessary for organizations to implement best practices. Companies can follow a step-by-step process to maximize the internal recruitment process. 

Internal hiring policy 

An internal hiring policy is an important aspect of an organization’s internal mobility process. This provides a well-structured plan for managing internal job openings. By clearly communicating the procedures, qualifications, and communication methods for internal job postings, the policy ensures fairness and openness in the internal recruitment process. This policy not only helps employees understand how they can advance within the organization but also promotes a culture of openness and equal opportunity for all. 

     Posting on internal job boards 

Once companies identify the need for a new employee, they can create job ads in internal job boards that clearly describe the necessary skills and experience to become successful in the role. Try making the job descriptions detailed to avoid irrelevant applications. These ads should also emphasize the benefits that the position offers and describe the department. For instance, if the new role offers benefits like bonuses or salary increasement, let the employees know.

     Communicate your job openings openly 

Never limit the communication to internal job boards, company newsletter, intranet. The hiring team can also send automated emails and even hold meetings to communicate the new job openings to existing employees. Additionally, they can personally inform the respective department heads about these openings. 

     Promoting internal employee referrals 

Employee referrals stand out as an effective way of identifying qualified candidates for open positions. Having HR software in place is beneficial during the internal recruitment process. Nowadays, applicant tracking systems (ATS) come with in-built employee referral features. Using an applicant tracking system like Hiretrace,  could help manage some of the aspects of the referral process such as tracking referrals through various stages of the hiring process, identify successful referrers and measure the impact of referrals on the overall hiring process. Additionally, use of technology could help smoothen and streamline the internal recruitment process. 

     Screening applicants

Even when considering internal candidates, it is necessary to thoroughly assess all candidates, as there might be candidates with similar performance and skills. Evaluating methods like previous project reviews and job knowledge tests would help determine who is the most suitable for the role.  

     Constructive feedback 

It is important to provide positive feedback to rejected candidates. This feedback helps them understand the reasons for their rejection while providing suggestions for improvements. This would also positively impact employer branding as it demonstrates the company’s strong commitment to career development. 


What are the advantages of hiring internally?

Here is a breakdown of the advantages of hiring internally. It emphasizes the importance of supporting internal talent and the potential impact it can have on a company’s growth  

Retaining best employees 

One of the advantages of hiring internally is it helps retain the top talent. 94% of businesses state that hiring internally improves the retention of their most valuable talent. Promotions give the idea that there are paths for career advancement, transforming the jobs to advanced careers. Internal promotions significantly increase the likelihood of retaining qualified employees. 

     Cost effective and time saving 

Hiring externally could be time consuming and costly because the recruitment teams will either have to advertise on job boards or source. They will have to spend some time assessing candidates. On the other hand, internal candidates are already working for the company. Therefore, time needed to reach them and engage them is comparatively less because they may not need lengthy interviews as the performance history is available at the fingertips. All these factors would reduce the time needed to hire, highlighting the advantages of hiring internally

     Grasping tasks quickly

One of the advantages of hiring internally is the shorter learning curve. Understanding how your company operates, including its policies and practices, is vital for employees. Employees with years of experience in an organization already have a solid grasp of the company’s work practices. When employees move to a similar role within the same department, such as a software engineer moving to a senior software engineer position, the knowledge that they already have can be a great asset. Having worked in the same team or a related role, they are already familiar with the team members and the technical aspects of their new position. This familiarity allows them to adapt quickly to the new requirements of the role. This could also lead to a more efficient onboarding process, reducing the learning time when compared to the new people joining the organization. 

     Fits the culture   

New hires may come with a level of uncertainty, and sometimes they might not align with the company’s culture. However, when you promote an employee internally, you already have a good understanding of their working style. Since you have seen their work behavior firsthand, there can be no doubts about how they fit into your company’s culture, which can be regarded as one of the advantages of hiring internally. 

     Promotes employer brand 

When companies offer their employees career advancement opportunities or move to roles that align with their interests, it would boost the workplace morale and company reputation which can be considered as one of the advantages of hiring internally. This practice not only benefits individuals but also sets an example to other potential candidates as it demonstrates that the organizations also give priority to the career growth of their employees. By building a culture of opportunities, you can enhance your employer brand, making the company a better place to work in terms of career advancement. 

     Strengthens job security

 Job security which is also considered as one of the advantages of hiring internally means that state of being secure in the employment. When employees feel that the company values their skills and contributions, they are more likely to feel secure in their current positions and are unlikely to be dismissed. Such employees do not feel like leaving the company as they see a clear path to professional growth.


Challenges of hiring internally 

While there are many advantages of hiring internally, it also comes with some challenges. Firstly, hiring internally could create a gap in the organization’s workforce because when an employee is promoted to a new role, their previous position becomes vacant. This gap can disrupt the workflow, especially if the role is critical or if there are not enough people to cover the workload. Secondly, without a diverse pool of internal candidates, there’s a risk of limited ideas, which could limit innovative ideas from coming up. So, this might limit the organization’s ability to understand and meet diverse customer needs. Internal recruiting could also disappoint the ones who are not selected for internal promotions.


Is internal hiring better than hiring externally? 

While the advantages of hiring internally are clearly visible, it’s also important to consider that external recruitment can offer benefits too. External hires could bring fresh ideas and new skills that you might not see within the company. It is necessary for the companies to consider multi-faceted aspects that affect effective recruitment. If the companies want to have a better recruitment strategy, it is advantageous to focus on recruitment diversity promoting both internal and external recruitment methods. This type of strategy would benefit both parties, both internal and external talent.


Final thoughts 

Although there are various advantages of hiring internally, deciding between internal and external recruitment depends upon what the vacancy requires from employees. By analyzing the skills needed for the role, you can decide on which option to choose from. Whether you choose internal or external recruitment, the priority should be on making quality hires. Integrating an applicant tracking system (ATS), into your hiring processes can significantly enhance your ability to navigate this recruitment process successfully while also making quality hires.