This enterprising company considers internal candidates for 100% of its job openings.

While businesses have adapted to changing technologies and operation strategies, there is one area that has not evolved: internal recruitment.

Gone are the days when employees planted roots at a single company. In fact, millennials (individuals born approximately between 1981 and 1996) and Generation Zers (individuals with birth years approximately between the mid-1990s and early 2010s) are used to job switching—and the strategy is more favorably regarded today than in the past.

This change in mindset makes embracing internal hiring even more vital, says Rajesh Ahuja, Global Head of Talent Acquisition at Infosys, an IT consulting company. “It’s important for recruiters and talent leaders to recognize the importance of internal talent pools and … remove friction between internal and external talent marketplaces,” Ahuja said during a LinkedIn future-of-recruiting event. Doing so can help companies retain experience-hungry employees who want to build their capabilities.

Refining an internal hiring strategy has its challenges though. Managers tend to be displeased when another manager poaches an employee, and many higher-ups mistakenly believe hiring from within stalls growth. But Ahuja tells that well-planned communication can alleviate concerns that traditionally prevent companies from considering internal candidates for important roles.

“Your best talent is inside,” Ahuja says. “It just requires a nudge to create an internal hiring system which will give you the best talent possible.”

The Benefits of Hiring From Within

Internal mobility helps retain skilled employees and often lowers onboarding and compensation costs.

“For a critical position, internal talent probably suits better because you’ve already recruited the person, so you’re not recruiting an individual all over again. You have trained the person in many ways, [and] they know the ways around your organization,” Ahuja explains.

According to Harvard Business Review, “outside hires take three years to perform as well as internal hires in the same job, while internal hires take seven years to earn as much as outside hires are paid.” Consistently introducing external hires, particularly for higher-level positions, comes at a steep price on multiple fronts.

Failing to recognize and reward internal talent with opportunities to grow and switch roles also makes companies likelier to lose the great employees they worked hard to get. According to LinkedIn research, the No. 1 reason people change jobs is for career opportunity, and the Bureau of Labor Statistics reports that the number of “quits” (voluntary separations initiated by employees) has risen for 10 consecutive years.

An emphasis on internal hiring can reverse these trends, benefiting employees and employers. Mark Lobosco, Vice President of Talent Solutions at LinkedIn, told the Society of Human Resource Management that employees stay 41% longer “at companies that hire internally compared to those that don’t.” “As companies continue to experience the benefits of internal mobility, we’ll begin to see it shift from an ad hoc solution to an essential corporate strategy,” he said.

What Led Infosys to Assess Its Internal Hiring Strategy

Ahuja cites a number of factors that led his talent acquisition team to revise its recruitment strategies. First, an exit data review showed that Infosys employees were leaving to pursue the same types of positions Infosys was advertising to external candidates.

Second, and most importantly: Talent leaders realized it would be impossible to meet their future skill needs through external hiring alone. Low supply and high demand for certain future skills as companies compete for the same talent would lead to new hires getting paid beyond their worth—if Infosys could even find candidates with the right skills.

“The best way to have talent is to create them rather than to hire them,” Ahuja says. Thus, Infosys needed to upskill its employees and develop an effective pipeline to ensure workers could get into positions that utilize their new skills.

Lastly, Ahuja says they recognized that their workforce wants growth. “It’s important that [employees] see there are opportunities for them to do more,” Ahuja explains.

Removing the Friction Between Internal and External Hiring

Ahuja says hiring is fairly seamless across industries for external candidates, who can easily access job listings, apply, interview, and negotiate salaries and start dates.

“We need to look at our employees with the same lens as we look at [external] candidates,” Ahuja told LinkedIn, “and remove that friction [so] an internal employee can also apply for an opportunity with the same ease, with the same comfort, as what an external candidate gets.”

For Infosys, a four-step approach reduced friction and aligned the recruitment process for internal and external hires:

  • First, Infosys included both external and internal hiring as critical considerations in workplace planning.
  • Second, when a hiring manager has a new position to fill, recruiters share concrete data that shows what exists in the marketplace, where they would hunt for talent externally, and what is available internally. Then they allow the hiring manager to determine the better route for sourcing.
  • “The third step,” Ahuja says, “is essentially to weave the entire process in a way that … the ability to get an internal candidate is as simple as getting an external candidate.” At Infosys, the same recruitment team works on hiring for a position, whether it is filled internally or externally, advertising the position and interviewing candidates. If the hire comes from within, recruiters coordinate transfer dates between departments.
  • Finally, Infosys aligned macro HR processes—like promotions and succession planning—with moving individuals internally. “These programs need to complement each other rather than be in conflict,” Ahuja advises.

Another key strategy to reduce friction: Convince managers that hiring internally is not just about letting people poach your talent. Ahuja says two reminders worked at Infosys: When you lose people, you get new talent. And individuals who feel like they cannot grow in their current role or business area will leave the company to find that growth elsewhere.

“Initially there will be acceptance issues,” Ahuja allows, “but once you have a few champions, the rest of the organization begins to follow.”

The Infosys Hiring From Within Playbook

Ready to improve internal mobility at your organization? Here is Ahuja’s advice from Infosys’ recruitment transformation.

Plan a Communication Strategy That Leadership Conveys First

“Ultimately it’s about developing a philosophy rather than [just] creating the processes and policies,” Ahuja says. Executives should take the lead on sharing the philosophy that the company is focusing on hiring from within.

Infosys began with emails from top brass, including the chief operating officer. That initial announcement led to department-level town halls. Finally, the HR business partners educated managers about the link between internal mobility and retention, as well as how internal hiring can rescue companies from future skill gaps. HR teams were also instrumental in teaching employees about the personal growth benefits of applying internally.

“Communication and motivating employees to go through [the internal hiring process] is the single biggest success factor,” Ahuja says. Posting jobs internally will not change anything if employees are not excited to apply—or do not feel like they have a chance to land a new role.

Create a Simple, Personalized Online Platform

Employees, managers, and HR were already used to online platforms for employee data and reviews, so it was not a leap to enhance systems to entice internal movement. Infosys made it easy for employees to view their own profile and assess their current skill level and aspiration levels, and then discover how to get there.

The company made skilling opportunities available through platforms that employees could access from anywhere, anytime. Individuals’ skill tags appeared on their internal profiles and incentivized them to learn new skills and access better job opportunities, faster growth, and higher compensation, Ahuja says. Still, hiring managers were not allowed to headhunt from the platform.

Instead, employees can search for open jobs and apply through the online platform. The same platform houses interview updates and feedback.

Do Not Require Managers’ Approval for Employees to Apply for New Roles

Infosys used to require supervisors’ signoff before reports could seek other internal positions, but managers nearly always hesitated to approve. Now staffers can apply for any open position of interest and go through the recruitment process without their manager knowing. If the employee is selected for the position, recruiters alert the current manager and negotiate a release date.

Advertise 100% of Job Openings Internally

Ahuja admits that if he could change one thing about how Infosys originally went about hiring from within, he would have advertised all roles internally. Instead, Infosys started small, advertising just 30% of jobs, and gradually increased that number over time.

Ahuja says when companies post all positions internally and externally, candidates see an organization’s entire spectrum of opportunities. It helps current employees focus their growth efforts, leading to more voluntary skilling and better retention rates.

Reaping the Benefits of Hiring From Within

Ahuja says employees immediately raved about Infosys’ better aligned internal and external hiring strategy, and even reticent hiring managers bought in once they saw the strategy play out.

“Internal recruiting has [a] significant positive impact on retention, faster fulfillment of jobs with digital skill requirements, and increased fulfillment for difficult-to-hire locations,” Ahuja says.

For companies beginning to undertake this philosophical shift, Ahuja says, “It’s a journey. You will not get it right the first go.” Allow a year for addressing issues.

But the hard work is worth it. Three years after boosting internal recruiting efforts, Ahuja says Infosys’ hiring is in a good place. That does not mean external recruiting has halted. “We’re a growing company,” Ahuja points out, so they have to attract outside talent. Now, though, new hires are explicitly encouraged to grow within Infosys—and they can more than ever.