One of the best things a company can get in response to a job posting is an internal applicant, at least most of the time. What if that applicant is rejected for another, more qualified applicant? Well, a recent study by Harvard Business Review reveals that internal candidates who are rejected for an open job position are more likely to quit.
The study of 9,000 job candidates from over 100 Fortune 500 companies showed that 1 in 2 of those employees rejected when applying for an internal job was likely to quit.
What does that really mean to businesses, and what, if anything, can and should be done about it? Here are some of the key findings from the study and how you can reduce the likelihood that an internal candidate will leave.
First, it is important that businesses understand the benefits of internal applicants: they often know the quirks and culture of the company already and can fit into a new position and blend with a new team much more quickly as a result.
Depending on the position they are moving from, they might also have insights on the current direction of the company, and how their new role fits in with the larger picture. You’ll spend a lot less time handholding and bringing them up to speed. In fact, research shows that it takes 8-26 weeks for a new hire to reach full productivity depending on their position.
Not only that, but you can fill the position right away—no lengthy lunch or working interviews with external candidates. It also costs less, with no need to offer the premium you may need to pay external candidates. Even if everything goes smoothly, it will cost a business just over $4,000 to hire a new employee, and that process will take 42 days, or even longer.
Are there drawbacks? Sure. An external candidate may bring fresh eyes and a different viewpoint to the position and the company, and that can be invaluable. However, it depends on the position you are hiring for, and if you want the potential disruption that might bring.
But what if the internal candidate doesn’t have proven experience in the job they are applying for or the specific qualifications you are looking for?
The Harvard Business Review study also revealed that one way to cut down the likelihood a candidate would leave is simple: have the hiring manager interview them. Those interviewed by the hiring manager rather than just someone from HR are half as likely to stay with the company. While it might not be possible for a hiring manager to interview every internal candidate, it is a good idea for them to evaluate carefully who they interview and who gets passed over earlier in the process.
For example, maybe someone from your finance department applies for a job in research and analytics. While the hiring manager may not want to hire someone without relevant experience, knowing they are more likely to quit if they are not interviewed might be enough reason to at least sit down with them.
Second, you might be surprised at the “hidden experience” or talent that employee has and discovering it in an interview before they leave can have huge benefits.
The other thing employees look at when they are rejected is who got the position they were applying for. If an internal candidate was hired, they are less likely to leave than if they were passed over for an external candidate. This is because they can see that while they did not get selected for the current job opening, hiring internally is important to the company.
But even if they lack the skills you are looking for, there is another option for internal candidates.
That option is to offer training to reskill current employees to new positions in the company. In fact, many employees have transferrable “soft skills” that can bring real value to a new position. But as positions become obsolete and new jobs emerge, more companies are turning to reskilling current employees rather than hiring externally.
That’s not to say that putting a reskilling program in place is simple. Instead, it is a complex endeavor with a lot of moving parts, but many talent acquisition partners are working with companies to help them bridge the looming skills gap internally rather than externally.
This may not be an immediate solution for a rejected internal candidate, but it can point them toward a future with your company rather than another one.
To be successful this means developing a clear, internal career path employees understand from the start.
The truth is internal mobility programs are the future of talent acquisition. Keeping current employees just makes better economic sense and keeps employees more engaged. People change jobs more often than they ever have before, and many leave because of a lack of opportunity with their current company.
Having a clear internal career path and sharing that with your employees does a couple of things: first, it shows them where they can go without leaving your company. Second, they are less likely to apply for jobs “outside their lane” if they know there are opportunities in departments where they already have the skills they need.
Rejected internal candidates are twice as likely to leave their jobs, but you can take steps to prevent or at least mitigate that issue. Understand the value of your internal candidates, interview applicants when possible, especially key employees whose loss would seriously impact operations.
Finally, look at reskilling current employees when possible, and outlining a clear career path for other employees to keep them engaged and vested in continuing their journey with your company. In the long run, the extra effort will be worth it.