Most employers at some point have wondered if they should be ‘growing’ their own talent or ‘buying’ it into the business. There is undoubtedly a strong argument that the ‘sweet spot’ of recruitment is finding the right balance between the two; but quite often the pendulum swings heavily in one direction.

Many leaders automatically turn to external recruitment channels when they receive a resignation as they feel it is the best avenue to source the talent they need. There is a sense that the person with the skills, experience and behaviours to do the job is currently out there working for someone else. But what if the right recruitment decision is merely one cubicle away? Could the person with the ‘skill’ and the ‘will’ for the role be sitting right under your nose?

Are employers obliged to hire internally?

In many scenarios, there is no employment law requirement to post jobs internally unless an employer has agreed to do so; for example under an internal policy or enterprise agreement.  This is more common in larger scale employers or government agencies where it is a negotiated practice that roles are offered internally first. This is usually seen as an employee benefit as it gives existing employees the ‘first bite of the cherry’, but the other perspective is that it does not allow for a greater diversity of thought and experience.

It is recommended that employers consider their preferred approach to recruitment and apply this consistently across the organisation. The recruitment methodology should be clearly communicated to employees and captured in policy to avoid disappointment and harness a culture of honesty and transparency.

So, why should internal recruitment be more of a priority?

It is not surprising that many employers want to look externally first, but it is concerning. Recruitment is a costly exercise and even more disastrous when you get it wrong. Perhaps more crucial than the money, is the message it sends existing employees when the organisation decides that the only people good enough for the job are not currently on the payroll.

Given that employee development, career progression and challenging opportunities are often listed as three of the top things workers seek from their employer; it only makes sense that more emphasis is placed on the talent that is already aligned to your values and committed to your purpose.

Here are 5 reasons to start focusing more on internal recruitment:

1. Clear career pathways are a retention hook

There is no secret that many workers want to know that there is a clear career pathway. Talented and driven employees expect that if they commit and work hard, that there will be opportunities on the road ahead. If they find that they are only met with dead ends, they will naturally start looking at other organisations.

2. Internal recruitment allows employees to share their hidden talents

An employee may be hired as a customer service representative, but did you know that they also have an accounting degree? It is important to remember that employees arrive at your workplace with a suitcase full of skills and experiences. It is common for leaders to have no idea about the breadth and depth of skills a team member has until they choose to bravely put their hand up to be considered for an internal position.

3. Internal recruitment highlights opportunities to further develop employees

In theory, succession planning and employee development plans should feed internal recruitment and not the other way around. Realistically, many employers will put development plans in place for career development after their team member unsuccessfully applies for a new position. Internal recruitment demonstrates to employees that there are multiple paths for progression and that the employer wants to partner with them on the road to success.

Further development should not be forgotten for new internal appointees either. It is common for an employee who is star performer in their role to be promoted to a team leader or manager position without checking whether they have people management skills. It is easy to forget that being amazing at the work their team performs does not mean that person knows how to manage that same team. Providing training specifically on management skills is a worthwhile investment that can keep the team running smoothly under the new leader. Ai Group offers leadership development including Introduction to Supervision and Leadership Skills for Managers and Supervisors.

4. Culture gets a positive boost

Nothing beats congratulating your co worker on their promotion to another department. It is also nice to learn that the new head of production is someone that is known and respected within the business. Internal appointments show workers that the business values and respects their existing workforce and it usually provides comfort that the person is already known to the team. Culture unquestionably gets a positive boost when employees can see that when they are ready; they may be an opportunity for them.

5. Internal promotions and lateral moves provides a chance for a fresh team

When an employee receives a promotion, it not only benefits that employee and the team that they are going to; but it also creates an opportunity at a lower level. This then generates a secondary opportunity for other workers to learn a new skill or fulfil a development goal. Many leaders welcome internal recruitment as it enables them to refresh their team with new energy and skill.

Use them or lose them!

Talented employees want to know that their hard work, dedication and results will open doors internally. They need to see that other workers are successful in securing promotions and opportunities or it can lead to resentment, a drop in engagement and a rise in turnover.

Most workers will understand when the organisation needs to hit the external market for a unique set of skills that is not held within the business, but they will be less forgiving when they see positions closely linked to their development plans pop up without notice on Seek. Partnership, transparency and authentic leadership remove the need for nasty surprises and support a healthy culture where the perfect candidate may be closer than you think.

Further information

Inclusive leadership that fosters internal talent generates strong team results, higher engagement, and an enviable team culture. To help your business get the most out of your leaders Ai Group offer a training program – Leadership Skills for Managers and Supervisors where participants will explore the essential leadership elements instrumental to success. 

For assistance with your workplace matters, Members of Ai Group can contact us or call our Workplace Advice Line on 1300 55 66 77 for further information.

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Georgina Pacor

Georgina is Senior HR Content Editor – Publications at Ai Group. She is an accomplished Human Resource professional with over 25 years of generalist and leadership experience in a broad range of industries including financial services, tourism, travel, government and agriculture. She has successfully advised and partnered with senior leaders to implement people and performance initiatives that align to business strategy. Georgina is committed to utilising her experience to create resources that educate and engage and is passionate about supporting members to optimise an inclusive workforce culture that drives performance.