Unlocking the Potential Within: A Guide to Internal Hiring for UK Businesses

In the competitive landscape of talent acquisition, many growing businesses in the United Kingdom are looking for strategic advantages. One of the most powerful and often underutilised staffing strategies is looking within your own organisation. This is the essence of internal hiring, a process that can transform your workforce and drive sustainable growth. For HR leaders and managers, understanding internal recruitment is the first step towards building a more resilient and engaged team.

What is meant by internal recruitment?

It’s the process of filling vacancies with existing employees from your company. This can take the form of a promotion, a transfer to a different department, or a move into a new role that better utilises an employee’s specific, acquired and developing skills. It is a testament to your belief in your current workforce’s potential for development and growth, and a sure-fire way to boost internal morale.

The primary difference between internal and external recruitment lies in the talent pool. While external recruitment casts a wide net to attract new talent, internal recruitment focuses on the skills, experience, and cultural fit of your current employees. An example of internal recruitment could be a senior software developer being promoted to a team lead position, or a marketing assistant moving into a sales role after showing a flair for client interactions. Many companies find this approach to hiring highly effective, and in line with their employee internal professional development processes.

The benefits of looking inward

The benefits of internal hiring for UK businesses are substantial. One of the most immediate is the reduction in both hiring time and cost. The recruitment process is usually much faster, as you are dealing with known quantities. And there are no external advertising fees or recruitment agency costs associated with hires.

Internal hiring has a significant positive impact on employee morale. When employees see opportunities for growth and development within the company, it fosters a sense of loyalty and motivation. This has a direct link to employee retention, a critical issue for many businesses. By providing clear career paths, you are more likely to keep your best talent within the company over time. This can help ensure stability and a more sustainable business growth. For more insights on this, check out our articles on employee retention strategies and how to reduce employee turnover.

Moreover, internal hires are already familiar with your company culture, training and management processes, and business development goals. This drastically reduces onboarding time, and will help the employee to become productive in their new job much faster.

Navigating the drawbacks and challenges

Despite its many benefits, internal recruitment is not without its challenges. One potential drawback is the creation of a skills gap in the team the employee is leaving. This simply means that another vacancy is created that needs to be filled. There is also the risk of fostering a monoculture, where new ideas and diverse perspectives, often brought in by external hires, are limited.

Another challenge is managing the expectations of those employees who applied for the role but were unsuccessful. This can sometimes lead to resentment and a dip in morale for those individuals. A transparent and fair process is crucial in order to mitigate this risk and help all employees feel valued.

The process of internal hiring

A successful internal hiring process should be well-structured and transparent. It typically involves the following main steps:

1. Job posting: The new position is advertised internally, often via the company intranet, email newsletters, or dedicated internal mobility platforms.

2. Application: Interested employees submit their applications, usually a CV and a cover letter explaining their suitability for the role.

3. Screening: The hiring management and HR review the applications, and shortlist the most promising internal candidates.

4. Interviews: The shortlisted internal candidates are interviewed, much like external candidates. This is a chance to discuss their skills, experience and aspirations in the context of the new role, in order to find just the right fit.

5. Selection and offer: The best employee candidate is selected, and a formal offer is made.

6. Feedback: It is vital to provide constructive feedback to all the internal applicants, especially those who were not successful. This shows that you value their interest and encourages them to apply for future growth opportunities.

Roles, examples, and effective strategies

A wide range of positions can be filled through internal hiring, from junior roles through to senior management. For example, a customer service representative with strong product knowledge might be an excellent candidate for a junior product manager job. Real-life examples of successful internal hiring include companies that run a ‘future leaders’ programme, identifying promising employees and providing them with the right training and development needed to become future managers.

To implement effective internal hiring, organisations should foster a culture that strongly encourages growth and development. This includes having regular career conversations with employees, investing in training and upskilling their work, and making internal opportunities visible and accessible to everyone. The rise of the ‘great unretirement’ also presents a unique opportunity for HR to retain and redeploy highly experienced workers into new roles.

Measuring success

So, how can you measure the success of your internal recruitment efforts? Key metrics to track include:

• Internal mobility rate: The percentage of roles filled by internal candidates.

• Performance of internal hires: How well do internal hires perform in their new roles compared to external hires?

• Employee engagement and satisfaction surveys: Do employees feel there are enough opportunities for growth within the company?

• Retention rates: Has your focus on internal hiring led to a decrease in employee turnover?