Communications of the ACM
An Inside Job: More Firms Opt to Recruit From Within
Credit: James Yang / The Wall Street Journal
Many firms are ramping up internal hiring efforts and investing in new career sites to boost intra-organization mobility, cut recruiting costs, and retain high performers. These initiatives are the result of a growing conviction that there's plenty of talent already within the organization, together with research showing that hiring outsiders can lead to costly missteps. New internal career programs that make it easier to identify passive candidates are designed to help recruiters approach internal candidates the same way they do external ones. They can also significantly boost worker satisfaction with a company's career development efforts.
Promoting from within, from the CEO on down, can deliver more benefits for companies than hiring outside talent, a growing body of research suggests. One recent study from the University of Pennsylvania's Wharton School found that external hires were paid some 18% more than internal employees in equivalent roles, but fared worse in performance reviews during their first two years on the job. Hiring managers may be wowed by an outsider's resume or new perspective, but they "underestimate how hard it is to integrate new people," says Wharton's Matthew Bidwell. No matter how good the software, recruiters and employees need to carefully manage talent-hoarding bosses who fear losing top performers.
Internal hiring systems are often useful for companies where work is done on a project basis, enabling them to quickly assess what talent is available for an open project and determine whether to begin an external search. They also encourage more mobility within the organization. For example, Google recently replaced its internal job board with Magnet, a site that gives workers more information about internal career paths and encourages worker mobility. Workers who are interested in a move can tag themselves within Magnet as "looking for new opps" if they want to be considered for open positions. In 2010, consulting firm Booz Allen Hamilton created an internal recruiting system, called Inside First. Each business unit gets a recruiter to act as career coach and matchmaker, and all managers and employees have access to a database of job openings and staff profiles.
From The Wall Street Journal
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