why your internal candidates are worth investing in to outperform external candidates

There are numerous benefits to internal hiring and nearly four out of five HR professionals worldwide say that internal recruitment is important to their talent management strategy - but increasing the proportion of internal hires is still a tough challenge for many organisations.

During the pandemic, up to a third of employers reassigned employees to different tasks - demonstrating that rapid redeployment is possible. What this taught us is that, to remain agile, it's important to have the data and the processes required to move the right people into the right roles.

Fortunately, a growing HR Tech sector was already emerging to remove many of the barriers to internal mobility and redeployment: the talent marketplace.

However, all of the current internal mobility platforms that we are aware of miss one vital ingredient to successfully increasing the volume of internal hires you could be placing.

the missing ingredient in internal mobility platforms

No matter how sophisticated the skills classification and matching intelligence of any of the current providers, we see one major omission in their ability to facilitate more internal moves for your employees: coaching and preparation for job market readiness.

All the major platforms talk about the ease with which current employees can be matched to the perfect internal assignment and how the best candidates from across the workforce can be easily surfaced for hiring managers. But these tools fail to take into account one factor that can up end the best intentions to hire internally - the external candidate.

No matter how perfectly the internal candidate matches the person specification, when they go up against a well qualified external candidate, who's crafted a compelling CV and has fresh interview experience, the lure of new external talent can be hard for hiring managers to resist.

Even if you're only looking at internal applicants for a period of time before going external, you are still creating a jobs market - and it's only fair to give every internal candidate their best chance to prepare for selection and demonstrate their strengths.

First, let's look at why the internal marketplace is the best route to fostering greater internal mobility and then why supporting your own employees to perform at their best against the external competition is so important.

why create an internal talent marketplace?

In many organisations, internal mobility happens naturally as employees build their internal networks, get to know more about the wider operations of the company and pursue their career goals. However, a study from the CEB found that 40 percent of internal moves involving high-potential employees end in failure.

In 2015, JR Keller studied two methods of internal hiring to see which would perform better: posting jobs to an internal marketplace and sponsorship - where a hiring manager has a personal connection to a known candidate.

The hypothesis was that sponsorship would produce better performing internal hires, but, surprisingly, the opposite was true. Analysing over 11,000 internal moves over a five-year period at a Fortune 100 firm, internal candidates hired via the marketplace outperformed sponsored candidates on just about every quality criteria the company measured.

We also believe that creating an internal talent marketplace is more democratic. Extroverts are more likely to be proactive in building their internal network than introverts. A marketplace levels the playing field. Our career development platform also helps more introverted employees raise their profile internally by giving them email templates and phone scripts to use when reaching out to colleagues to find out more about new work assignments.

why you should be prioritising internal candidates

There is no shortage of evidence that internal candidates trump external hires on just about every measure. Wharton's Professor Bidwell found that external hires were paid 18-20 percent more and had lower performance scores for an average of two years when compared to internal hires.

According to a Deloitte report, external hires cost six times more than building talent from within, and external candidates are more likely to be laid off or fired in the first year. The 2021 LinkedIn Workplace Learning Report highlighted that employees who have found new roles internally are three and a half times more likely to be engaged than those that haven't.

Any of those stats should persuade hiring managers that it pays to be looking at internal mobility first. When you compare the time, effort and investment that goes into assessing external hires for cultural fit with the track record and accurate performance data you have on internal candidates, it's hard to understand why hiring managers are sceptical of internal candidates.

how to support your internal candidates to perform at their best

So if the most reliable and highest potential candidates already sit within the company, it makes sense to set them up for success when they want to apply for a new job internally.

Even if the new role is a project or temporary gig, landing it is almost certainly going to involve presenting some kind of work history showcasing accomplishments and having a discussion with the hiring manager. External candidates will have a CV and be ready for an interview. Your internal candidates might not have updated their CV or attended an interview for years - why put them at such a disadvantage?

To foster greater internal mobility, you have to give internal candidates the tools to secure the new role or internal job. Our internal mobility platform is the only one that supports internal candidates to create a market-ready CV or internal profile and prepare effectively for an internal interview.

When you combine that with personalised input from one-to-one career coaching - from expert, professional coaches - you are enabling your employees to demonstrate their suitability for the role to the very best of their ability.