Internal Hiring: The Pros and Cons

Internal hiring is offering vacant job positions to current employees. It is done via sourcing talents from various departments and teams rather than reaching out to candidates who are outside the company. The HR advertises internally and allows qualifying workers to apply. Studies found that 63% of hiring professionals believe that internal hiring accelerates the recruitment process. The primary benefit of it is saving time and money.

Upskilling blue-collar workers with an HRMS software can help tap into talent from within your organisation. For instance, in 2022, Swiggy launched a program named Step Ahead which gave an opportunity to its delivery executives to transition into managerial-level jobs with a fixed salary and added perks. It was a great chance to flip collars from ‘blue’ to ‘white.’ So, if you are planning on a similar approach, learning about the pros and cons first can help make an informed choice. Here’s a look.

Advantages of Internal Hiring

Hiring someone from your workforce comes with many benefits.

Less Time and Effort: An advanced HRMS app stores and manages employee-related documents. These can be re-used for promotions and salary revisions for internal hiring. You do not screen resumes or ask for police verification proof again.

Employee Knowledge: A few hours of an interview are not enough to truly know someone. There is a risk that they might not fit well into your company culture resulting in turnovers. But with internal hires, you know their personality, work approach and general conduct. You have seen them work under stressful situations. So, there are fewer possibilities of discrepancies.

Career Progression: Internal recruitment sends a message that there are clear growth opportunities within the company itself. The authorities are willing to keep their best people. This can motivate the employees to do better in their present roles with the hope to be promoted.

Shorter Onboarding: Your employees know most of the company policies. They have a clear idea of the practices, missions and values. They are familiar with the people around them. The worker may also know the context of the new position if the hiring is within the same team.

Cost-Effective: Do not have to spend money on advertisements to reach potential workers. Communicate via available internal portals. Further, having a good HRMS app in place means the verification and resume checks were already done when the employee joined the company. Altogether it saves you significant money.

Disadvantages of Internal Hiring

Keep these points in mind before going ahead with the recruitment.

Lack of New Ideas: Fresh perspectives and valuable insights are more likely to come from external hires. This lowers the chances of your brand getting stagnated, say in terms of, creativity.

Leaves a Gap: What happens to the old position when an employee moves to a new one? It might remain vacant for some time. A series of similar movements within the organisation might disrupt the whole operation.

Create Discords: Internal hiring can lead to managers losing good team members. Further, there could be a sense of bitterness among employees, or they may feel their efforts were undermined when a colleague is hired to a better position.

Whether you consider external or internal hiring, working with HRMS software can be beneficial in many ways. It can analyse bulk blue-collar worker data by using complex algorithms and speed up the process along with mitigating legal issues.

The Role of HRMS Software in Internal Hiring

A robust HRMS software can be used to create a new salary structure for the hired employee. This is done by taking taxes, incentives and ad-hoc deductions into account. An automated compensation engine for CTC, gross salary and applicable contributions is available for better payroll management. An in-built onboarding feature can also help the HR collect any additional documents that would be needed for the new role. Further, an attendance system can import the previous roster and configure the new shift of the employee.

Look for a people-centric and tech-driven approach for your hiring needs. It reduces the manual workload and helps the HR focus on other important business areas. Choose the platform that can seamlessly integrate with your tools and systems. Now cover all aspects of an employee lifecycle, from hire to retire, without hiccups.