Selecting the best person

In an ideal business world, the best person to fill a job vacancy is someone already employed by the company.

"If you promote from within, it gives everyone more opportunity and is a morale booster," says Kim Smith, senior consultant for recruiters Robert Half. Stephen Ellett, associate director for Executive Search says: "Internal staff understand the environment and culture of the business and so have a better chance of achieving results."

Recruiting internally also fits with the desire of many employers to retain good staff for as long as possible by offering ongoing challenge and opportunity. Why bother then, with the expense of external recruitment and take the risk that an external candidate may end up being a poor fit?

Apart from the obvious - that businesses don't always have people with the required skills or the time to train and promote from within - recruiters say engaging a recruitment consultant and interviewing external candidates is routine for larger organisations that value objectivity and a certain amount of measurable rigidity around the recruitment process. Interviewing external candidates is also a useful benchmark to ensure the quality of internal candidates.

Smith says if external candidates are put forward against internal candidates they should be made aware of that, as should the recruitment agent. She says using external candidates as a benchmark for internal candidates is common and [accepted] practice providing there is total transparency and the external candidate has a genuine opportunity to get the job.

"They usually do, because if a business is 100 per cent sure of an internal candidate then a recruitment consultant won't be asked to source external candidates in the first place," says Smith.

Some employers are aware of the potential politics of internal and external recruiting - recruitment consultants say any internal candidate who puts their hand up for a position should be interviewed irrespective of perceived ability because they may have abilities the employer has overlooked.

"We interview all candidates and make sure any internal candidate is given the courtesy of an interview regardless of [apparent] merit. Existing staff need to be comfortable that they have been dealt with professionally," says Tim Kernahan, a director for executive recruiters Swann Group.

Kernahan says internal candidates are often more nervous than external candidates because employers tend to 'pigeonhole' them and external candidates often end up with a better chance due to the 'deputy headmaster syndrome'.

"A successful headmaster resigns, the competent deputy headmaster puts up his hand, and the next thing you know the school board has hired an outsider. The deputy then resigns and goes on to be headmaster of another school. I tell internal candidates: before you apply, make sure you are being perceived the way you want to be perceived," says Kernahan.

The recruiters say an ideal recruitment model has both internal and external candidates going through the same interview and assessment process managed externally by an independent recruitment consultant. Then the strengths or weaknesses of internal candidates can be presented objectively and in a similar way to external candidates. Once an employer has a clear and unbiased view of the abilities of all candidates, they are within their rights to pick the person they like the best.

"The temptation is to try to make the recruitment process as objective as possible. But once all the objective criteria have been satisfied, [selecting] the best person for the job is a highly subjective decision - and it should be," says Kernahan.

Robert Half's Smith says while there are no real barriers to internal recruitment other than resource constraints, the demand for external recruitment is holding its own and is likely to do so for the foreseeable future.

"We're not about to go out of business. Companies will always look first at internal promotion, but external recruitment is a better idea if the business needs to grow. Companies hire from the outside to bring in new contacts or to bring in fresh ideas. [That said], it is a risk because every time you bring in new people you risk changing the group dynamic," says Smith.

The recruiters say although most businesses are aware of the advantages of internal recruiting and follow the line that if an internal candidate is of equal value to an external candidate, the internal candidate should get the job, internal recruitment is not visibly increasing in New Zealand. While some companies go so far as to develop a policy stipulating a certain percentage of appointments should be internal, most are too realistic for such a prescriptive approach.

"There is a theory that if you can't find an external candidate at least 20 per cent better than an internal candidate you should hire the internal candidate, but it's too tempting to generalise. There are times in the business cycle where there is a need for continuity and consolidation through internal appointment and times when there is a need to recruit from outside," says Kernahan.

He says companies look hard at internal candidates when they have gone to a lot of trouble to grow people with the right skills internally, or when there has been significant change in the business and any more change will send existing employees into "a state of shock." Conversely, external candidates are favoured when particular skill sets are needed urgently, or if the business finds itself in a position of needing to expand geographically or to meet a competitive challenge.

Ellett says internal recruitment is best supported by a succession planning structure where people are identified before opportunity arises. If that is in place and if internal skills are strong enough, it is then always better to recruit from within.

"[To achieve this] companies will have to start looking at their people as an asset rather than a resource and consider how to use what they have. A laissez-faire, attitude to replacing people in a tight employment market means employers have to compromise on their appointments just to get people in," says Ellett.

He says external candidates tend to be sought for specialist roles such as those requiring scientific or IT skills, and for roles such as CEO, CFO and CIO. External appointments are also necessary when a multinational business moves employees offshore.

TIPS FOR GETTING AN INSIDE JOB

* Gain an insight into the way you are perceived by your organisation and ask: what are the reasons I might not get this job? * Does your employer know the full extent of your history and achievements? Do they need reminding? Don't assume senior managers are aware of, or remember, what you have achieved.

* Develop a mental checklist of bullet points to reiterate during interviews. Get those points across even if the 'right' questions are not asked during the interviews.

Tips for external candidates

* Assume you have internal competition. Combat this by acquiring a thorough understanding of the organisation; demonstrate that you identify with the company, its culture and what it wants to do going forward.

* Tie your own aspirations and characteristics to company culture.

Source: Swann Group