Employers spend up to $40 billion on recruitment every year, according to research by SmartRecruiters.
However, the majority of this investment is spent on attracting external candidates rather than on retaining and promoting the top talent they already have working at their organizations.
This is particularly strange given that there is a constant imbalance between talent supply and employer demand – something which has only been exacerbated by the pandemic.
SmartRecruiters surveyed 310 talent acquisition stakeholders across 112 employers for its first ‘State of Internal Recruiting’ 2021 report and found that two in five companies had no formal internal recruiting program in place.
Because so many employers lack a formalized internal mobility program or policy, 68% of employers require their internal candidates to follow the same rigmarole as external candidates, which is actually more likely to push them to leave their current employer and apply for roles elsewhere.
Whereas even giving an employee a new role and different responsibilities (even if that doesn’t come with a pay rise or new title) improves the likelihood of retaining top performing talent for more than three years by 20%. This is because 75% of employees who get promoted and 62% who are moved laterally will remain in companies past their three-year work anniversary.
Internal recruitment is also paradoxically overlooked in terms of investment.
Although only 5% of all recruiting spend is on talent mobility, internal recruitment accounts for 40% of all hires made and it saves on average $6,000 per hire.
Unfortunately, this trend looks set to continue with less than 2% of those surveyed planning to increase this spend over the next year. While 40% made it clear that they would rather invest in SaaS platforms or job adverts to attract external candidates than focus on promoting their own high-quality internal talent.
So what should employers do?
SmartRecruiters notes that even “something as small as providing a dedicated employee jobs portal, sending employees periodic internal job alerts, or even perfunctorily posting available positions on internal channels like Slack or SharePoint could make a big difference when it comes to internal recruiting and hiring (not to mention the overall efficacy of recruitment advertising).”
SmartRecruiters CEO Jerome Ternyck commented: “Employers are finally starting to realize that it’s increasingly likely that their next hire is actually already working for them.
“If you can’t provide your best people with meaningful career opportunities, then your competitors will.”