How to Use Internal Recruiting to Increase Employee Retention

“Train people well enough so they can leave, treat them well enough so they don’t want to”

– Richard Branson, Founder of Virgin Group

In the midst of the Great Resignation, companies are seriously considering what they can do to retain their star performers. In 2021, over 4 million workers in the US were quitting their job each month, leading to a record-breaking 10.9 million jobs left vacant at the end of July.[1,2]  And that was only the beginning. According to a survey done by Joblist, more than two-thirds of employees report that they are planning to quit within the next year (74% of full-time employees and 51% of part-time workers).[3]  So what can companies do to make sure their top talent stays in-house? They can hire them internally.

Although most managers don’t want to see their star players go, it is almost guaranteed that they would rather lose top talent to another department, than to another company – or competitor. For this reason organizations need to be intentional about building internal hiring processes that gives employees access to the opportunities they are looking for, so that they don’t go looking for them elsewhere. How is that done? We’ll tell you more and answer some common questions about internal hiring below.

The Need for Internal Recruiting Processes

Before we get into how internal hiring is done, we wanted to take a moment to illustrate why these processes are needed. Often companies mistakenly assume that employees know what opportunities are available to them, and if not, that they would be comfortable asking. In reality, however, most employees don’t know what professional development opportunities exist within their firm, and when it comes to applying internally for another job, most also don’t feel that they have the support of their supervisor(s) and colleagues. In a survey of 3,000 candidates conducted in June 2021, Gartner, a technological research, and consulting firm, found that: [4]

  • only 33% of those looking for a new job had searched internally first
  • only 51% of candidates are aware of available internal job openings
  • only 17% of employees felt their manager was supportive of them applying for internal positions
  • only 20% felt their peers/team was supportive of them applying for internal positions
  • only 37% felt that it was easy to apply to internal positions

What these numbers show is that companies need to do a better job of communicating both the availability of internal job openings, as well as their support for employees submitting an application. This is especially important for ensuring equal access to opportunities. Studies show that women are 55% more likely than men to say they were not aware of internal job openings, and that women from underrepresented backgrounds are three times less likely to be identified as high potentials.[5] Communicating job openings and encouraging employees to pursue their career advancement internally is therefore important, not just for retaining talent, but also for promoting equity, diversity, and inclusivity.

How To Increase Staff Retention: Three Steps for Effective Internal Recruiting

Now that we understand the importance of a strong internal hiring process, let’s take a look at how to get there. Follow the three steps below to build an effective system for internal recruiting and ensure your team feels included in your hiring process:

  1. Create a Job Board – Set up an accessible, user-friendly place where employees can find up-to-date information about the job opportunities available at your company. We recommend doing this online to protect the privacy of those looking for new opportunities, and to make the process as efficient and standardized as possible.

  2. Communicate Support – Set aside an explicit time for managers, supervisors, and other leaders to tell their team about your organization’s internal hiring efforts and communicate support for their applications. If your “job board” (see above) is new, this would be a good time to introduce it to your team and show everyone how to find and navigate the information.

  3. Provide Ongoing Career Counselling – In addition to announcing your effort to hire internally, encourage your leaders to check in on their team regularly and ask whether people are satisfied in their role, and what opportunities they might be looking for to advance their careers. These conversations can be had informally, but they can also be integrated as part of a larger talent development or succession planning process. (Note: these conversations should be had one-on-one, not in a group meeting).

Common Questions About Internal Recruiting

Are internal candidates preferred?

Internal candidates are not always preferred – and they certainly shouldn’t be given systematic preferential treatment. All job applicants, whether they are applying from outside or inside the company should be funneled through the same hiring process, including resumes, cover letters, interviews, etc. Standardizing the process helps to mitigate bias and ensures that the best candidate is selected for the job.

Do internal candidates have to be interviewed?

Yes, absolutely. Although you may already know an internal candidate well, all candidates should be taken through the same hiring process – which usually includes at least one interview. Of course, speaking with an existing employee will likely look and feel very different than speaking with a stranger, however the interview should still be conducted much in the same way (i.e., same questions asked) so that candidates can be objectively compared.

How can internal roles be advertised?

Internal roles can be advertised in a variety of ways. The simplest (and arguably most effective) way is to set up an online job board where the opening is listed, and anyone can access the job description and application. Other ways to advertise internal roles may be through announcements at company-wide ‘town hall’ meetings, or smaller departmental/team meetings. Companies may also use emails or other channels of communication to share job openings in real-time as they arise (either with the entire company, or with only the relevant departments or teams).

How do employees apply for internal roles?

Applying for internal roles should look much the same as applying for external roles – especially if your organization has done a good job of standardizing the process and keeping things equal for internal and external candidates. That being said, there are a few things you may want to consider doing when applying for a job internally:

  • Give your manager a heads up, and explain why you are applying for the job (focus on the opportunities of the new position rather than any discontent with your current one)
  • Tailor your cover letter to do the same – emphasize your loyalty to the organization, your commitment to its mission/vision, and your desire to seek opportunities for growth and advancement internally
  • Send a thank you note, or express your appreciation in some other way; show your company that you do not take them or the opportunity to apply to this position for granted, and that you are not expecting to get it on the basis of being an internal applicant

When should organizations recruit internally vs. externally?

There are many benefits to hiring internally, but sometimes hiring externally may be more appropriate. Here’s a quick breakdown of when to hire internally, and when external hiring might be the way to go:

Promote InternallyHire Externally
  • You already have employees who are well equipped for the role
  • You see potential in your employees and have capacity to prepare them for the role
  • You do not have a strong on-boarding and orientation process
  • Your operations depend heavily on institutional knowledge (corporate culture, procedures, client relations, and/or team dynamics)
  • Your company’s strategy, operations, and managements are relatively smooth and consistent
  • Your organization is not growing
  • You have a sufficiently large talent pool in-house
  • You don’t have the required skills and abilities in-house
  • You don’t have time to develop the required skills and abilities in-house
  • You have a well-developed on-boarding and orientation process
  • You’re looking for an outside perspective and/or operations do not depend heavily on institutional knowledge
  • You’re already restructuring or going through significant organizational change (e.g., mergers and acquisitions)
  • Your organization needs to expand to continue to succeed
  • You need access to a larger talent pool than what is already available in-house

Looking for More?

If you have more questions about how to build an internal hiring process and would like to speak with a consultant, please reach out to us! Over the last 50 years we’ve worked with more than 8,500 private and public organizations across North America. We’ve got lots of tips and tricks to share, and our consultants are always happy to chat.


Erica Sutherland, Ph.D.


Erica completed her Ph.D. in Industrial-Organizational psychology at Western University. She is a Senior Consultant at SIGMA, where she delivers consulting services and Succession Planning solutions to clients. As a member of SIGMA’s executive coaching team, Erica works one-on-one with leaders to develop talent. She also brings her expertise in measurement and psychometrics to the R&D team, assisting with the development and validation of SIGMA’s many assessments.


Brittney Anderson, Ph.D.


Brittney is a member of our coaching and consulting team. She brings her expertise in evidence-based practice to provide companies with leadership solutions that meet their needs. Primarily, Brittney helps her clients prepare for their future with succession planning and comprehensive leadership development programs. As an executive coach, she helps leaders hone their skills using a process-based approach to development.


Glen Harrison


Glen oversees SIGMA’s sales and marketing activities. As a skilled presenter and trainer, he has designed and delivered engaging and entertaining workshops and webinars to help leaders and HR professionals enhance their understanding of how our products and services can be used to realize potential within their organizations.

[1] Mearian, L. (January 6, 2022). No end in sight for the Great Resignation; workers keep quitting for better pay, benefits. Computerworld. Retrieved from

[2] Cook, I. (September 15, 2021). Who is Driving the Great Resignation? Harvard Business Review. Retrieved from

[3] Mearian, L. (January 6, 2022). No end in sight for the Great Resignation; workers keep quitting for better pay, benefits. Computerworld. Retrieved from

[4] Gartner. (January 27, 2022). Gartner Recommends Organizations Confront Three Internal Labor Market Inequities to Retain Talent. Gartner. Retrieved from

[5] Gartner. (January 27, 2022). Gartner Recommends Organizations Confront Three Internal Labor Market Inequities to Retain Talent. Gartner. Retrieved from

About the Author

Helen Schroeder

Marketing Coordinator

Helen completed a dual degree with Ivey Business School’s HBA program and Western University’s Honours Specialization in Psychology. As a Marketing Coordinator and Consultant she creates and manages content for SIGMA’s webpages, blogs, and coaching resources. Helen also assists in new product development, go-to-market strategy, and client consultation.