Partner Feature: 3 Reasons To Double Down on Your Internal Recruiting Efforts

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The US economy is currently at what economists call “full employment”. This means the unemployment rate is so low that nearly everyone who wants to work is already working. While this is excellent news, it does create real stress for businesses wishing to acquire talent and accelerate growth.

Recruiters agree – there aren’t as many candidates and the competition for high performers is at an all-time high. A recent survey by PwC showed that 77% of CEOs believe they’ll have a difficult time finding the skills they’ll need to support their growth aspirations. Also, recruiting and training costs are rising, and the average tenure is decreasing. The problem could get worse.

Several leading companies have launched internal recruiting initiatives. Internal recruiting focuses on discovering and developing the talent within the company, versus searching externally. Several very compelling statistics support doubling down on internal recruitment efforts.

1. Recruiting and hiring externally costs 170% more.

Recruiting outside your organization can be costly. Besides needing to retain a recruiting staff, consider the cost and maintenance of role advertisement, promotion, and platform fees. Don’t forget the increased time necessary to triage applicants, manage paperwork, schedule interviews, and travel. (*Average cost of finding and hiring someone from outside the company is 1.7 times more than an internal hire ($8,676 vs. $15,008), per the Saratoga Institute in TIME).

As the Society for Human Resources Professionals points out “Internal recruitments are less expensive because there are little to no recruiting fees, and they generally don’t require extensive training, referral bonuses, or travel and relocation costs. Internal recruitments are also usually quicker. For an internal hire, they can complete the process within a few weeks. Internal hires usually have the support of managers and readily available performance review documents, and managers have a good sense of the strengths of the employee.”

2. Between 40% and 60% of external hires aren’t successful.

Candidates sourced internally are much more likely to be successful than their externally hired counterparts. According to Time Magazine, internal hires are unsuccessful only about 25% of the time, vs. 40% to 60% of the time for external hires. Performance review data aligns with this. The University of Pennsylvania’s Wharton School found that within the first two years on the job, external hires fared worse in performance reviews when compared to hires found internally. Despite this, external hires were paid 18% more on average than an internal hire.

Employees can also find it easier to succeed in a new job within the same company. They have workplace connections, knowledge of company goals and processes, and understand the corporate culture.

3. You’ll develop more high performers and improve culture, while lowering attrition.

Nothing bothers employees more than being continually passed up for new opportunities inside their company. This is especially true for high performers — some of the talent you most want to keep. In 2017, PwC reported that 67% of younger workers believed they were underutilized in their current role and didn’t get to do what they do best at work. The report also showed that ⅓ of these workers were planning to look for another job within six months if their existing situation didn’t improve. The HR Review said a full ⅔ of employees surveyed in the UK reported having wanderlust.

Recruiting talent internally enhances the employee experience. As reports, “Of primary importance…is the fact that internal recruitment is good for employee morale. If filling positions externally is common practice, employees may feel they have no future at their organization and may lose motivation or resign for a better opportunity elsewhere.”

What does this mean for you?

Most organizations lack the data and the tools to manage internal recruiting efforts effectively. Applicant Tracking Systems often focus on finding candidates outside the organization. As a result, new jobs make their way to a physical job board in the cafeteria, the company intranet or HRIS system, or other hard-to-find spots. Worse yet, many companies leave it up to the manager as to whether to post the role internally. Others may choose to leave it to word-of-mouth.

Companies need easy access to relevant employee information to create an internal recruiting database. Rich employee profiles with the ability to search on skill sets, behavioral tests, certifications, training, past project history, and awards would facilitate the identification of internal candidates. In most organizations, this data exists but is not aggregated or easily accessible.

At Structural, we’re focused on helping companies bring together all the information they have on their employees to build rich profiles for everyone in the company. Armed with quick web or mobile access to this data, leaders and talent teams can find internal candidates more effectively than ever supporting reduced attrition, decreased recruiting and training costs and improved corporate culture. We’ve had great success helping organizations recruit internally and create more connected and productive teams.

About the author

Chip House is COO & Co-founder of Structural. Structural’s platform solves a fundamental challenge of modern work by allowing everyone within an organization to find and connect the right people at the right time. Learn more at

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