At some point, we’re all likely to run a hiring process which includes internal candidates. As one study recently showed, this needs handling very carefully.
The first thing to say is that hiring from within is great. It sends a very positive message about progression within our companies and internal candidates have existing context and relationships which help them have a more immediate impact than an external candidate.
However, if you’re interviewing internal candidates, at some point you’re also going to reject some of them - either in favour of another internal candidate, or an external one.
As the authors make clear though, the answer is not to stop hiring external candidates who might be a better fit, but to best manage the inevitable rejections of internal ones.
They found two areas which halved the likelihood of a rejected candidate leaving the company:
They were interviewed: getting to the interview stage of the process signals to candidates that although they didn’t get the job this time, they have many of the characteristics to get it in the future. It also offers an opportunity for detailed feedback on any areas of improvement, which doesn’t occur if a candidate is rejected without an interview. Both these dynamics encourage the individual to stick around and work on those areas with hope for the future, rather than feeling the door is closed to their progression.
They were passed over for another internal candidate: if their organisation favours an external candidate, the individual may assume they will have to face external competition for similar jobs in the future, lowering their own chances of being hired. This again encourages candidates to look elsewhere for career progression rather than staying at their company. Choosing an internal candidate instead removes this dynamic. The authors’ conclusion: ‘organisations should carefully consider whether to hire an external candidate when there is a viable internal candidate’.