Many smaller organisations are too fast to recruit externally. They look for new talent outside rather than considering the people they already employ. Cath Everett looks at internal vacancy engines.
On average, it costs a small-to-medium enterprise (SME) nearly £30,000 to replace one of their employees if they leave according to AXA PPP healthcare, which is a huge figure when you consider the average UK salary is £27,600, although it does include costs related to recruitment, training time and lost productivity.
So, it is unsurprising that a significant 77% of European employers consider internal recruitment to be either critical or important to their hiring strategy, according to a report by Cornerstone OnDemand – “Your Company’s Got Talent: Internal recruitment issues in the European marketplace”.
What is perhaps more surprising, though, is that only just over half of UK organisations (54%) actually fill more than 30% of their vacancies internally.
Moreover, a vast 91% believe it is each employee’s individual responsibility to pursue internal opportunities rather than HR’s duty to proactively push them and/or create a talent management dialogue that works for everyone concerned.
The issue, says Charles Hipps, founder and chief executive of recruitment software supplier WCN, is that “the desire to bring in fresh thinking tends to dominate recruiters’ mindsets today so when a new position arises, they think about how they’re going to bring someone in who will bring something new to the business. They instinctively go externally”.
This is despite the fact that many employers have rules in place dictating that job advertisements must be published internally first, generally about a week before they appear elsewhere. A key challenge here though is that not all organisations will have suitable matches for the desired skills and competencies in-house anyway.
Another consideration is that not all employees will feel comfortable in openly applying for an internal vacancy or discussing a potential move with their line manager, in case it has a damaging effect on their current position.
Internal vacancy engines
But it is here that internal vacancy engines, which are part of most types of recruitment software and are used in a similar way to external job boards, come into their own.
They are already quite commonly employed by large public and private companies with more than 1,000 or so workers, particularly for redeployment purposes when undertaking business transformation initiatives, as they can save time and money. But adoption is much rarer among the SME community.
Another popular usage of the technology, meanwhile, is in encouraging staff to employ them as search engines after new positions have been advertised on internal bulletins. Despite the apparent benefits, it is much less usual for recruiting managers to proactively use such systems to draw up a shortlist of internal candidates based on pre-set criteria.
“We have a number of clients whose recruitment managers work in that way,” Hipps says. “It’s not common, but it does help them retain the best talent and it also allows companies to help develop and build people’s careers in a way that benefits both themselves and the individual.”
He acknowledges that there is a danger with this approach where employers can end up creating a “pick-me system that encourages poaching”, which is why access is generally controlled by recruiters rather than line managers.
Nonetheless, internal vacancy engines can have advantages for SMEs too. Hipps explains: “This is a useful tool to handle personnel development so you know who your rising stars are and can give them an opportunity to grow within the business. It’s not going to solve all of your recruitment problems, but it should help you get better attrition rates and growth by helping you retain your best employees.”
This, he says, is because workers often feel happier as they have been actively developed and nurtured and are able to see a career path for themselves. Promoting from within can also help to attract new candidates too, however, as they likewise see the benefits of the approach, he adds.
The real secret to success, however, is deciding when the best time is to go down one route or the other. “It’s about knowing when to offer choice to internal candidates, which helps you to represent yourself as a caring, equal opportunities employer, and when to bring in new blood – and it’s not always an easy balance to get right,” Hipps concludes.