Vacancies, of course, are often filled internally. Sometimes organisations advertise all vacancies publicly as a matter of course and consider internal candidates along with anyone from outside the organisation who applies. This approach is generally considered to constitute good practice and is widely used in the UK’s public sector. However, many organisations prefer to invite applications from internal candidates before they look to their external labour markets for new staff (Newell and Shackleton 2000, pp. 116-17; CIPD 2006, p. 8). There are considerable advantages from the employer’s perspective. First it is a great deal less expensive to recruit internally, there being no need to spend money on job advertisements or recruitment agencies. Instead a message can simply be placed in a company newsletter or posted on its intranet or staff noticeboards. Further cost savings and efficiency gains can be made because internal recruits are typically able to take up new posts much more quickly than people being brought in from outside. Even if they have to work some notice in their current positions, they are often able to take on some of their new responsibilities or undergo relevant training at the same time. The other advantage stems from the fact that internal candidates, as a rule, are more knowledgeable than new starters coming in from other organisations about what exactly the job involves. They are also more familiar with the organisation’s culture, rules and geography, and so take less time to settle into their new jobs and to begin working at full capacity.
Giving preference to internal recruits, particularly as far as promotions are concerned, has the great advantage of providing existing employees with an incentive to work hard, demonstrate their commitment and stay with the organisation when they might otherwise consider looking for alternative employment. The practice provides a powerful signal from management to show that existing employees are valued and that attractive career development opportunities are available to them. Failing to recruit internally may thus serve to put off good candidates with potential from applying for the more junior positions in an organisation.
The main disadvantage of only advertising posts internally stems from the limited field of candidates that it permits an organisation to consider. While it may mean that someone who ‘fits in well’ is recruited, it may also very well mean that the best available candidate is not even considered. Over the long term the organisation can thus end up being less well served than it would have been had internal candidates been required to compete with outside people for their posts. For this reason internal recruitment sits uneasily with a commitment to equal opportunities and to the creation of a diverse workforce. Talented candidates from under-represented groups are not appointed because they never get to know about the vacancies that the organisation has.
It is also important to note that the management of internal recruitment practices is difficult to carry out effectively in practice. Research carried out by the Institute of Employment Studies (2002) shows that serious problems often occur when internal candidates fail to be selected. This is because they tend to enter the selection process with higher expectations of being offered the position than is the case with external candidates. Bitterness, antipathy and low morale are thus likely to follow. Moreover, failed internal candidates are considerably more likely to pursue claims of unfair discrimination following a selection process than external candidates. For these reasons it is essential that great care is taken when managing internal recruitment to ensure that the approach taken is both fair and seen to be fair. Giving honest, full, accurate and constructive feedback to failed candidates is an essential part of the process.
Source: Torrington Derek, Hall Laura, Taylor Stephen (2008), Human Resource Management, Ft Pr; 7th edition.