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Business leaders know how challenging it can be to find the right talent to fill critical vacancies. But the truth is, many companies miss highly skilled talent that’s right under their noses: the employees you already have on your team, who may have skills and knowledge beyond what they’re using in their current role.

An internal hiring system allows an organization to unlock the full potential of your workforce, and as Recruitment Director Amanda Graham explains, “There are many benefits to internal hiring. It increases employee engagement and retention. If employees can look at the leadership team within their organization and see their career progression internally, they will be more engaged and committed to the company in the long-term as they will realize there are opportunities for their career development, as well.”

The Summit Search team recently sat down to discuss their thoughts on internal hiring, when it’s best utilized, and tips on how companies can leverage the power of their team to its full effect. Here are the key points they discussed that can give other business leaders guidance on how to integrate internal mobility into the benefits you offer your team.

Creating internal career paths for team members

In theory, creating internal mobility in a company is easy: you simply make current employees aware of the advancement opportunities available and consider their resumes alongside those of external applicants when you have a role to fill.

In reality, there are some additional challenges that organizations often need to overcome when they’re creating a system of internal mobility for their employees. Promoting an employee leaves their old position vacant, which can be a problem if their role is specialized or difficult to fill. Promotions can also lead to conflicts if one employee gets a promotion over their colleagues, or if advancement puts an employee in a managerial role over their former coworkers.

In some cases, an internal hire may not seem like an option because there are no people on your current team trained to take on that role. Serena Milani, Recruitment Consultant in SSG’s Toronto office, points out that you don’t have to make promotion decisions based solely on the skills employees already have. Programs that expand or strengthen their skill sets can help them take full advantage of the internal mobility you offer. Her suggestion: “Prioritize upskilling and reskilling programs tailored to current and emerging industry demands. Offer courses in digital literacy, data analysis, and technology to adapt to evolving workplace needs.”

Serena also gave examples of the types of upskilling organizations can offer to promote this kind of internal mobility, which include:

• Leadership and soft skills training to foster managerial growth
• Cross-functional training for diverse experiences
• Mentorship programs that encourage knowledge transfer and career guidance
• Continuous learning platforms and workshops on emerging trends to cultivate a culture of innovation
• Providing financial support for relevant certifications to motivate employees to pursue them

In addition, she says, organization leadership should conduct regular performance assessments of team members to help align their development with organizational goals. Whichever specific strategies you employ, she says, “A comprehensive approach to upskilling and reskilling empowers team members, fostering a dynamic workforce capable of navigating industry changes.”

Recruitment Consultant Mariah Beahen seconds this suggestion, and notes that offering financial support for employees to increase their skills through professional development or certifications doesn’t just support their internal mobility. In addition, “It adds value to the line of work they do and is also a key tool for candidate attraction and employee retention.”

In other words, knowing that your organization offers internal career path progression can help you to attract new employees to your team, and keep them with you for longer, in addition to providing more options when you need to fill critical or niche roles.

Candidate selection: Internal vs. external hires

The selection process for internal and external hires is largely identical—or, at least, it should be as close to the same as possible. Maintaining a consistent process for all types of hiring helps to prevent bias from influencing the process. As Amanda Graham notes, “A streamlined and standardized approach gives both internal and external candidates the knowledge that their candidacies were considered as thoroughly as anyone else being put through the interview process.”

One advantage of promoting from within is that you will already be familiar with the skills and qualities the candidate brings to the workforce. Because of this, says Melanie McQueen, “The process may be expedited when you leverage internal referrals. External hiring, on the other hand, typically involves a more extensive review, including interviews, thorough skill assessments, and a detailed examination of the candidate’s experiences and cultural fit.”

The more extensive evaluation required with external candidates also usually makes it a costlier process. This is especially true for talent that is highly in-demand, or niche talent that can be difficult to find, requiring long and complex recruitment efforts. Granted, you’ll still need to fill the employee’s old position when you promote from within, but if they were in a more general or lower-level role, you can often still see both a cost and time savings by utilizing internal promotions.

There is a potential downside to knowing so much about an internal candidate, as well, which is that it could make it more challenging to make impartial hiring decisions. On the positive side, managers may be more inclined to promote an employee they already know, respect, and work with well. On the other side, past conflicts or issues within the workplace could influence the hiring team’s decision, as well, which could unfairly limit an employee’s opportunities if they’ve since resolved that issue. Using an anonymized system to compare both internal and external candidates side-by-side can help to minimize these concerns and ensure your hiring process is as fair as possible for everyone you’re considering.

The best roles to fill through internal hiring

Mariah Beahen suggests, “Oftentimes, the best roles to fill through internal hires are individual contributors into a manager or leadership position. You can identify an individual’s leadership abilities on their current team, and they can prove their ability to succeed by managing a team.”

Taking this approach to filling leadership positions can be beneficial for maintaining the cultural continuity of your organization. Leaders are the key figures responsible for making decisions that impact the entire company, so you want to have people in that role who fully understand your mission, values, and goals as an organization. Someone who has already been with you for some time and is immersed in your workplace culture on a day-to-day level is going to be better able to do this from the start than an external hire.

This doesn’t mean that every role is suitable for an internal promotion, however. While upskilling can help expand the skill sets in your current team, there are times you need to fill a role with someone who is already an expert. In this case, an external hire may be your only option.

Hiring new talent from outside the organization is also a more effective way to bring new voices into your workplace. One obvious situation where you will need to seek external candidates is when you are actively working to increase organizational diversity. As Melanie McQueen says, “The emphasis may be on acquiring fresh perspectives and specific expertise to complement the existing team.”

One key question to answer when deciding whether to hire from within or externally is what your specific goals are for the hiring process. Do you just need to fill this specific position, or are you aiming to add to the skills or culture of the organization as a whole? Knowing that answer can help you to determine what type of hiring is most likely to meet these needs.

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