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Internal Candidate Sourcing: The Basics You Need to Know

Published on May 9th, 2023

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Human resources (HR) departments typically prioritize external candidates when filling new positions. While this approach often proves successful, it may not be optimal for every role. In such cases, internal candidate sourcing may be worth considering. Although the concept of internal recruitment may appear vague to those unfamiliar with the practice, it involves much more than simply finding a suitable internal candidate. Nonetheless, you may still have reservations regarding the efficacy of this approach, given that most firms prioritize external recruitment

Both approaches have advantages and should be considered complementary rather than mutually exclusive. Combining both methods is often the best way to secure the most qualified candidates. However, internal candidate sourcing may have unique challenges, and several essential factors must be considered when implementing this approach. This resource introduces internal candidate sourcing and includes fundamental aspects such as advantages, tactics, and useful insights for effectively implementing this approach.

What is Internal Candidate Sourcing?

Before delving into the rationale for adopting internal recruitment practices, it is imperative first to clarify its definition. Internal sourcing entails identifying suitable candidates for a new position from among your existing employees instead of sourcing externally. This process may involve selecting candidates from a particular team or drawing from diverse departments to fill the vacancy. This key distinction is the primary factor distinguishing internal sourcing from its external counterpart. While certain variations in approach may be necessary, the primary focus is often on modifying the overall sourcing process to align with internal hiring practices.  

Why Should You Consider Internal Recruitment for Your Company?

According to a recent study by LinkedIn, the prevailing trend among businesses is to adopt internal sourcing practices, with many employing this approach in combination with external recruitment. While internal candidate sourcing is typically utilized for full-time positions, some companies rely on it exclusively. The rationale behind this trend is that internal recruits exhibit higher productivity levels than external hires, resulting in faster revenue generation. 

Moreover, internal candidate sourcing carries lower costs than external recruitment, making it a cost-effective and practical option for sourcing suitable candidates. Although there may be some disadvantages associated with internal recruitment, the benefits far outweigh any shortcomings.

According to LinkedIn's 2020 Global Talent Trends:

  • Over 70% of businesses are now focused on "internal recruiting."
  • Companies are 22% more likely to retain an employee for three or more years when there's been an internal move.
  • Internal recruiting improves retention, which puts it ahead of accelerating new-hire productivity (69%) and reducing time to hire (63%).

Hire from Within: Steps to Take During Internal Candidate Sourcing

Although there are similarities between external sourcing and internal candidate sourcing, there are also significant differences between the two approaches. As a result, you may feel hesitant about implementing the steps required for candidate sourcing. However, the process of hiring from within is relatively straightforward and can be broken down into a few key steps:

1. Deciding Whether to Pursue Internal Recruitment

While it may appear obvious, it is crucial to identify the qualities you seek in candidates for the available position and assess whether pursuing internal candidate sourcing will benefit your organization. 

2. Advertising the Vacancy to Internal Candidates

Precisely specify the necessary qualifications, competencies, and accomplishments for achieving success in the position to establish unambiguous criteria for eligibility of internal candidates. Subsequently, list the job on the internal job portal of the organization. 

3. Perform a Comprehensive Assessment of Skills and Interests

Collaborate with your frontline managers and senior leaders to identify eligible and motivated employees from your existing workforce who can apply for the internal job opportunity. This step can be enjoyable and rewarding. Delegate some of the initial legwork to your leadership teams as they have more insight into the workforce and can identify team members who may be ready for a new role.

4. Spread the word about the job opportunity within your organization

Developing a plan with your HR team and hiring manager is recommended to effectively communicate the job opening and its requirements to your internal employees. This goes beyond just posting the job on your internal job board. Depending on your workplace, you can use various methods, such as placing notifications around high-traffic areas, sending emails, having frontline managers relay the opening in person, or utilizing official internal communication channels with the help of your internal communications team. 

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5. Communicate Application Eligibility Requirements

It is common for companies to have eligibility criteria for internal candidates, such as job tenure, job performance, or location. It is essential to communicate these requirements clearly and in advance to prevent employees from feeling disappointed if they are not considered for the role.

6. Respond to Every Internal Candidate

In most cases, there will be more applicants than available positions, and some unqualified individuals may apply. Providing a positive candidate experience and maintaining employee engagement by responding to all applicants is essential. Suppose you choose not to consider a candidate. In that case, it's important to have a plan in place for someone from HR or their management team to have a productive conversation with them about the reasons for not being considered and what actions they can take to improve their qualifications. 

7. Update Every Internal Candidate

Although it may be tempting to skip providing updates to applicants during the recruiting process due to time constraints and competing priorities, it is important to resist this urge. Providing timely and consistent updates throughout the process will help keep applicants engaged and productive in their current roles.

Even though it may feel like a small gesture, regular communication can significantly impact company culture and employee morale. Not hearing back from a job can be stressful, so updating applicants can go a long way toward building a positive candidate experience and strengthening your company's reputation. 

8. Closing the Loop by Providing Feedback to Every Candidate

After finding the ideal candidate and extending the job offer, it's essential to inform the other applicants that they were not selected for the position. However, many hiring teams neglect to do this, resulting in damaged company culture and a loss of trust from employees. Though it may be uncomfortable, it's possible to deliver bad news in a positive manner that inspires unsuccessful candidates to continue investing in themselves. Similar to providing feedback to unselected interviewees, you can also have constructive discussions with all interviewees who weren't chosen, offering advice on how they can improve their skills for future opportunities. These conversations can be highly motivating when conducted with empathy and genuine concern for the individual.

Advantages of Internal Candidate Sourcing

Internal hiring offers numerous advantages that can quickly boost your company and effectively contribute to achieving your hiring objectives.

  • Lower Expenses: Recruiting new talent can be costly, but filling a position with an internal candidate can result in significant savings for your organization by avoiding the expenses associated with external hiring.
  • Enhancing Company Culture and Employee Morale: Witnessing the success of one's team can be highly rewarding. As humans, we all strive for personal and collective success. When an individual is promoted or placed in a role that is a better match for their skills, it can enhance their morale and uplift the spirits of the entire team.
  • Reduced time needed to fill a position: Recruiting new talent is time-consuming. The longer it takes to fill a position, the greater the negative impact on your organization. On the other hand, internal candidates are readily available and can be interviewed and hired in a much shorter time frame, leading to a faster time to fill.
  • Reduced onboarding time: Onboarding and ramping new employees up to productivity can be costly. When hiring externally, significant time and resources are required to get new hires up to speed. However, internal recruits can bypass much of the onboarding and training time required for external candidates since they are already familiar with the organization, the roles, and the company culture. This ultimately leads to decreased onboarding time and costs for the organization.
  • Enhancing diversity and promoting inclusion: Internal recruitment can be an effective and cost-efficient way to improve diversity and inclusion within your organization. Despite having limited resources, organizations can still achieve their diversity and inclusion goals by utilizing their existing pool of diverse talent through internal recruitment. By doing so, organizations can quickly realize the return on investment for their diversity and inclusion initiatives. While internal recruitment cannot solve all diversity and inclusion challenges, it can create a more inclusive environment and help bridge the gap between diversity goals and reality.

Disadvantages of Internal Candidate Sourcing

While internal candidate sourcing has several benefits, certain situations may not be advantageous or even harmful to your team's progress. Here are a few key considerations to keep in mind.

  • Lack of a new or innovative point of view: Internal hires may possess the required skills for a role but may not bring a new and different perspective, resulting in a potential lack of innovative ideas within the company. Fresh employees often offer unique and sustainable solutions to longstanding challenges.
  • Limited Pool of Candidates: Limiting your hiring decisions to internal candidates significantly restricts the talent pool you're recruiting from. That could lead to a lack of candidates who would be eligible for the role.
  • Creating Another Vacancy: Shifting an employee from their current position to a new one within the organization can be an effective way to fill a role. However, this internal mobility will create another vacancy that needs to be filled. Additionally, the employee may have to adjust to a new team and work environment.

    While the potential drawbacks of internal candidate sourcing may not be as significant as the advantages, they should still be considered. Therefore, it may be necessary to address these issues and come up with solutions to overcome any obstacles.

Widespread Errors with Internal Candidate Sourcing

Internal candidate sourcing is different from external sourcing, and assuming so can lead to common mistakes. However, being aware of these mistakes can make them easy to avoid. Some of the most notable common mistakes in internal candidate sourcing include:

  • Failure to encourage employees: Many may have aspirations for a specific career path within your company, which may involve seeking promotions or applying for different roles. However, they may not pursue these opportunities without encouragement, as they may believe that external candidates are favored. Encouragement can be a powerful motivator and help employees feel valued and supported in their career growth.
  • Neglecting to screen job candidates thoroughly: While an internal candidate may be familiar with the company, it is still important to screen them properly for the new position. The advantage here is that you can access the employee's performance reviews and other relevant information, making the screening process more efficient and accurate.
  • Failure in Crafting a Strategy: A well-thought-out strategy is crucial for successful internal candidate sourcing. Without a clear plan, there is a higher chance of errors and misunderstandings between recruiters and applicants. 

    By removing these drawbacks, you can refine your internal candidate sourcing and ensure that you attract the most competent candidates for any new position. This will help you avoid mistakes and set your business up for long-term success.

Conclusion

Internal candidate sourcing is a cost-effective and time-efficient approach to finding qualified candidates for job openings. However, it should not replace external hiring entirely and can be used with it. HR departments often suggest considering internal candidates before external ones, particularly for time-sensitive projects.

Internal candidate sourcing can be fast and easy, as existing employees are already familiar with the company culture and other employees. If you have upcoming open positions, using internal candidate sourcing can be a valuable option to consider. Our team of experts at HireQuotient can help you to achieve the same.

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Authors

author

Radhika Sarraf

Radhika Sarraf is a content specialist and a woman of many passions who currently works at HireQuotient, a leading recruitment SaaS company. She is a versatile writer with experience in creating compelling articles, blogs, social media posts, and marketing collaterals.

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