The days of having a job for life are long gone. Research has indicated that on average people will have seven careers in their lifetime and whilst the need to move on to a fresh challenge isn’t surprising, are some organisations missing a trick? Research carried out by Cornerstone OnDemand across Europe found that over three quarters of organisations (77 percent) understand that internal recruitment is critical; however, 54 percent do less than a third of their recruitment from existing talent. So why the disconnect?
It’s important to have a clear understanding of what internal recruitment actually is. Ultimately, it’s a review of all current employees to see whether any have the skills, experience or qualifications to fill existing vacancies within the organisation. Often when carrying out internal recruitment, this is done by giving someone a promotion or transfer.
Whilst internal recruitment is not a new initiative, it can be a challenge to do because of the complexity of moving an employee across an organisation and training them in a new role, taking into account performance management, succession planning and training.
Changing mindset
For some, internal recruitment is a totally new mindset. In many instances, this means asking managers to let their best people go, which unsurprisingly they may not be willing to do when they have KPIs and targets to hit. Cornerstone’s report Your Company’s Got Talent, found that fear of losing a top performer was cited as the biggest barrier (25 percent) to internal recruitment. However, this is a short-sighted opinion and the focus really has to be on the bigger picture. It is an established fact that people will change careers and managers and organisations need to decide what is worse – losing a star performer from a team or the organisation.
The report also found that creating internal vacancies (14 percent) and limiting diversity in the workplace (12 percent) were also seen as barriers to internal recruitment. This is entirely understandable: opening up internal vacancies can create ‘chains’ of vacancies not unlike the house buying market in the UK, with people waiting for someone else to move before moving themselves. This underlines the importance of approaching the problem holistically; internal recruitment is never as simple as placing an advert in the canteen – and there are rarely any assurances that a top performer in one team will be a top performer in another, making skills audits and close links between HR and departments essential.
However, in many cases, long-standing employees can be important to organisations in terms of culture, skills and also represent a sizeable investment from a training perspective. In this case, an internal change of career can be an exceedingly powerful motivator to both the employee in question and other staff. After all, on average it costs £30,000 to recruit a new employee due to the cost of lost output and logistical costs of sourcing and onboarding them. Therefore, if there is a way to reduce the cost to the business, without serious repercussions, the business should take it very seriously indeed.
Despite the barriers cited to internal recruitment, there are clear precedents for its success. Cornerstone’s research found that 93 percent of respondents have raved about the success of internal recruitment in the past. Granted, internal recruitment will cause some disruption in the short-term but in the long-term the benefits far outweigh these in terms of the opportunities it can present to employees, such as career development and helping an organisation position itself as an employer of choice. Also, it sends out a strong message about employee retention and how passionate the organisation is to hold on to its people.
Interestingly, the research also highlighted that HR professionals felt they experienced technological as well as social and professional barriers to internal recruitment. 69 percent of respondents stated that they relied on simple job posting systems to hire internally, even though more that 40 percent thought a dedicated planning system was a must-have due to the efficiencies it offers, especially in terms of reducing the time to fill a vacancy. Again, this highlights the complexities in the process; without a tool which can present a holistic view of skills and performance, effective internal recruitment requires the training, performance management, line management and succession teams to work together manually, which can be very time consuming.
Indeed, when it comes to filling a vacancy, time is something an organisation can’t afford to waste as this can have an impact across the board, whether it is service levels, customer satisfaction or team morale. These are just a couple of examples and therefore, technology needs to be seen as an ally to internal recruitment and helping to speed up the process of get the right people in the right roles.
Making the most of your people
With organisations spending on average £2,550 per employee per year to develop their people’s skill sets, it does beg the question why an organisation would want someone else or worse a competitor to benefit from the investment if an employee moves on when they could keep those skills in their own business and profit from them. Whilst it’s inevitable that people will move on at some point in the future, making sure it’s not too premature is key in terms of experiencing the benefits of developing your people. Internal recruitment can help with this.
The research found that internal recruitment is seen as an investment in the future, creating a deeper understanding of an organisation’s people and what makes them tick or move on. Interestingly, countries across Europe have differing attitudes; the UK seems to be more interested in engaging and retaining people than any of the other countries surveyed; France is looking to improve employee development with internal recruitment; the UK and Germany focus more on the short-term impact of internal recruitment on recruitment costs and time to fill positions than France and Italy.
It’s important to note that whilst different countries have different drivers for internal recruitment, it’s the long-term strategic gains that must be the focus. Yes, benefits can be achieved in the short-term such reduced recruitment and payroll costs; however, the long-term strategic benefits relating to employee development and retaining top talent need to be front of mind.
Making internal recruitment a future focus
People are always going to change careers and jobs, and short of locking them in the office, this can’t be avoided. However, employers can be flexible with their people and help them grow and develop by providing them with the opportunity to try new roles and careers within their organisation. This will provide employees with new challenges and experiences, keeping them engaged and motivated, whilst helping organisations to keep great people and be more strategic in terms of their recruitment. After all, good people are hard to come by, so why let them go?