Report puts internal jobs systems under scrutiny

The first major evaluation of internal postings systems in larger organisations has questioned its effectiveness as a recruitment method.

The Institute of Employment Studies research found that while open internal jobs markets are popular among staff due to perceived fairness, they are not necessarily a more effective or efficient way of filling posts.

Researchers questioned 20 major employers including British Gas, Customs and Excise, BAA, Rolls-Royce, The Prison Service and the Halifax.

“All in all, an open job system takes longer and generates more work than a manager simply deciding who they want to appoint,” the report said.

It also found that some internal recruitment systems could be undermined by managers “going through the motions”, leading to a perceived two-tier appointment system: star performers could have their job moves managed for them, while the rest could slug it out in open competition.

Where the system worked, it relied heavily on managers having “the inclination to carry out a difficult process with care and good judgement” together with strong HR guidance.

It worked better in companies with an open culture, the authors found, where managers treated it as an aid to good decision-making. Wide communication of vacancies and a good balance between rules and managerial flexibility helped.

Wendy Hirsh, associate fellow at the IES and one of the report’s authors, said there were “no good counter arguments” to open internal jobs markets in terms of fairness and access, but there was a trade-off with efficiency.

“There is a balance to be struck between proactive development of certain employees and the sensible use of self-managed careers,” Hirsh said.

Internal jobs markets: study’s key findings

  • HR savings from open internal jobs systems, but overall significant cost of candidates applying and managers recruiting

  • Workforce development not delivered by this process. Temptation for managers to appoint candidates who can “hit the ground running”.

  • Staff like open internal recruitment systems because they are perceived as fair, but approval turned sour if systems are too bureaucratic or managers acted unfairly

  • Quality of the system lies in how the HR function provides support

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