Building the right team of employees is essential for any business. As your company grows, hiring new people to share the load becomes crucial. Eventually, the team evolves and develops a unique working style and culture specific to the company.
For this reason, many companies implement an internal hiring process when looking for people to fill management positions.
Internal hiring could be an excellent choice, depending on the company’s needs and resources. However, not every businesses can maximize the benefits of this hiring arrangement.
This article will discuss the benefits of internal hiring and offer tips on how companies can make the most out of this practice.
When choosing people to fill positions within the company, especially management positions, organizations could either choose from their current employees or conduct an external executive search. Both practices can suit any company, depending on their hiring needs and goals.
However, internal hiring offers unique benefits that may not be as present if a company chooses to go for external hires.
Increased employee retention
Implementing an internal hiring policy and communicating it to your employees can help boost retention rates. It signifies that you value your employees’ growth within the company.
Employees become more motivated to stay and perform well when they can visualize a future with your company. Moving people up your corporate ladder also helps you keep talented employees in the business.
Hiring existing employees costs less than bringing new people into the organization. You can save money, time, staffing, and other resources by promoting existing employees instead of finding new ones.
The cost of hiring a new employee depends on the company and the industry. However, the average figure costs around $4,683 per hire. This amount increases significantly when hiring executives, with the average cost-per-hire of around $28,329.
When hiring internally, your company doesn’t need to post on job boards or implement strategies to find and reach potential candidates. This practice frees up a lot of time and resources your company can spend on other priorities.
Streamlined hiring process
The hiring process can take a lot of time and effort. You’re trying to get to know the working style of complete strangers and assessing whether they fit your company’s demands and work environment.
Good external hiring processes can also lead to quality hires. However, it can be more difficult to gauge people’s working styles and attitudes within a limited time.
On the other hand, promoting existing employees can lead to a smoother and more streamlined process. Of course, it’s still essential to assess their capability to move to a different role. However, the management and the hiring team have a better idea of how they work due to the employee’s existing experience with the company.
In connection with the previous point, internal hiring and promotions can lead to easier onboarding.
Onboarding new employees can be challenging. It takes some time for them to get used to existing company processes and adjust to a new working environment.
With internal hiring, onboarding becomes less of a problem. Existing employees already know how the company processes work. While their new position might bring new challenges, they already have practical knowledge and experience concerning the company’s goals and work environment.
5 Tips on Improving Your Internal Hiring Process
Implementing an internal hiring process may sound easy. However, it’s possible that you might not be making the most out of this setup. Like external hiring, internal hiring processes require a specific structure and approach.
Here are some tips to help you improve your internal hiring process and get the best people for your open positions:
1. Design an efficient internal hiring workflow
Many companies use external hiring practices when hiring internally. They ask employees to hand in their resumes and conduct interviews like any hiring process.
While these practices allow hiring teams to know potential candidates at some level, they could use some improvement.
Treating internal hiring processes as a separate practice from external hiring is essential. Designing a specific workflow for internal candidate hiring can make the process easier and help hiring managers assess candidates more effectively.
One way to improve internal hiring workflows is to incorporate regular employee assessments. Performance reviews give the company an updated database of employees and their skills. This practice alerts managers of employees who have the potential to move up within the company and take on higher or different roles.
2. Develop selection criteria
Creating and implementing clear selection criteria helps eliminate bias and minimize speculation among candidates. While it’s good to consider work performance and productivity in internal hiring, assessing leadership potential and other essential qualities is also important.
Outline the responsibilities of the role you wish to fill, and write down the essential skills and qualities necessary. A set of criteria helps make the hiring and selection process run more smoothly. It also provides a more objective view of each candidate and where they stand.
3. Communicate with employees
To promote transparency, it’s an excellent practice to publicize the hiring process within the organization. Create a job posting and publish it on the team’s internal channels. This practice helps the hiring team reach a broader pool of potential candidates, even within the organization.
Ensure your job posting includes a comprehensive description of the role, the department, and the criteria for eligibility. A well-written and informative job posting can attract qualified employees wishing to grow within the company.
4. Invest in employee development
A common challenge when implementing an internal hiring process is the pool of qualified employees. Does your company have employees prepared to take on larger organizational roles?
This is where employee development comes in. For employees to see a future within the company, you must help them develop skills that allow them to grow with the business.
Regular skills training can help employees improve their skills, allowing them to contribute more to the organization. You can also sit with each employee, discuss their career goals, and develop personalized plans for them to grow within the company.
5. Create a succession plan
A succession plan outlines all positions in the company and includes which employees are qualified to fill them when they are empty. Succession planning allows the company to replenish its staff efficiently and with the best people possible.
Aside from facilitating potential movements for internal hiring, a succession plan can also highlight staff shortages. These areas can indicate the necessity for external hiring.
Develop and Retain Top Talent
Internal hiring is an excellent practice for companies to retain talented employees and maintain cohesion and continuity. Developing the skills of existing employees can be a good way to cultivate a pool of possible candidates for future promotion.
Creating a dedicated workflow, good internal communication, and investing in employees can make internal hiring processes more effective.
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