When you need to fill a job position, the most cost-effective and practical thing you can do is hire from within
Posted on Harvard Business Review: July 13, 2010 8:58 AM
Organizations spend the majority of their hiring resources on finding and screening external candidates. But when you need to fill a position, the most cost-effective and practical thing you can do is hire someone from within. In fact, most hiring in companies is done internally. Still, the internal interview is often thought of as something to check off on a hiring to-do list rather than a source of real information. If you already know the person, what else is there to learn, right? Wrong. When conducted well, internal interviews can provide valuable new insight into a known candidate.
What the Experts Say
Whether you worked with a candidate closely or you just "know of" her, don't skimp on the internal interview process. "Just because you know someone well doesn't mean you will know if they will be able to perform well in a new job," says Susan Cantrell, senior research fellow at Accenture's Institute for High Performance and co-author of Workforce of One: Revolutionizing Talent Management through Customization. Assuming you know all the candidate's skills, capabilities, and potential is dangerous. "Most hiring managers find out little additional information about a candidate during the interview; they don't get to the right level of detail to make their questions meaningful, and they rely too much on subjective, non-criteria based judgment," says Cantrell.
Instead, be disciplined about how you conduct the interview. "There's no point in asking questions that will reveal information you already know, so the focus should be on new information," says Peter Cappelli, the George W. Taylor Professor of Management and the director of the Center for Human Resources at the University of Pennsylvania's Wharton School and the author of Talent on Demand: Managing Talent in the Age of Uncertainty.
To conduct internal interviews that are worth your time and provide new and useful insight into the candidate, consider the following.
If you aren't serious about the candidate, don't bother
Too often internal interviews are done out of courtesy or because of protocol. Interviews shouldn't be a waste of anyone's time. "Prior experience and job performance in particular is by far the most important criterion in predicting future performance," says Cappelli. If the applicant is not a true candidate for the job, do not interview him. Keep in mind that internal candidates are likely to be around after the search process is over. It is important to treat them with respect, which includes not leading them on and being honest about their suitability for a job.
Maintain a high bar
"For legal, credibility, and fairness reasons, it is important to evaluate internal and external candidates consistently on the same criteria as much as possible," says Cantrell. However, internal candidates know the company, its culture, and hopefully something about the role for which they are applying. Therefore, internal candidates should be able to provide answers that demonstrate this knowledge and are more relevant to the company itself. For example, if you ask an external candidate, How do you handle conflict with a colleague?, she will likely give you an answer that is mostly theoretical. An internal candidate should be able to respond in a way that is in line with company policies or norms and shows that he knows how to handle conflict specifically at your organization.
Of course not all internal candidates perform well. If a candidate botches the interview but has a good reputation, you may want to consider having someone else interview him. "It is usually better to go with an internal candidate who has an average interview but a consistently above-average performance record than an external candidate with the glowing interview," says Cantrell.
Assess role readiness
"The most useful questions for internal candidates concern their motivations. Why does this role interest them? Do they really know what they are getting into?" says Cappelli. Rather than ask questions about their current performance, which you may already know a great deal about, focus on the future. Ask behavioral or competency-based questions that get at the candidate's motivations, like, What will you need to get up to speed in this role? or Please explain what your plans for the first 90 days in this role would be. Answers to these questions will give you a better sense of the candidate's thought process and his ability to hit the ground running.
Simulate work experience
Interviews can only tell you so much about a candidate, internal or external. Cantrell points out that some companies are using work simulation exercises to assess job competency, even for white-collar jobs. "I am a big believer in letting people prove themselves based on doing actual work rather than on what they purport to have in interviews," she says. These simulations can be particularly useful in evaluating internal candidates when you don't have a good understanding of how they will perform in the new role. When setting up a joint-venture production plant, DaimlerChrysler, Mitsubishi Motors, and Hyundai asked about fifty salaried professionals, including operations managers and plant engineers, to participate in work simulations that included talking to employees about poor performance and sifting through memos and phone calls to determine the day's priorities. If you are unable to put the candidate in the role for a day, consider asking her to complete a sample work product prior to the interview or do a role play of an interaction with a customer or team member.
Principles to Remember
Ask about the candidate's plans for the role
Use behavioral or competency based questions to better understand the candidate's motivations
Simulate work experience through role plays or sample work assignments
Interview an internal candidate out of courtesy
Assume you know everything there is to know about the candidate
Ask questions you already know the answer to
Case Study: The difference between knowing someone and knowing of someone
McGraw-Hill prides itself on promoting from within. The company maintains an internal system where employees can create an on-line profile and be automatically notified of jobs that match their experience and interests. This system encourages not only internal promotions but lateral moves as well. Hiring from within requires a disciplined and thoughtful approach to internal interviews. Donna Dorn, vice president of human resources, higher education, professional and international business, says, "We encourage our managers to do substantive interviews with all internal candidates." Donna's colleague, Maryellen Valaitis, vice president of human resources, school education, emphasizes that selecting a job candidate is often the most critical decision a manager can make. For that reason, McGraw-Hill's HR team supports hiring managers to conduct rigorous interviews that include exploration of past experience, behavioral-based questions, and a discussion of the candidate's vision for the role.
Recently, there was a new position created on the Education HR team. The new role reports into the senior vice president of HR in Maryellen and Donna's business segment. The position was posted internally only. Two internal candidates applied through the job posting process — Josh* who works for Maryellen and Rebecca* who works for Donna. The head of HR decided that she would interview both candidates and she wanted both Donna and Maryellen to interview the other's candidate. Going into the interviews, both thought their own team member was the better hire. Donna had worked closely with Rebecca and knew she would be great in the role. Maryellen felt the same way about Josh. "Job performance is more important than the performance in an interview," says Maryellen. Since each only "knew of" the other candidate, the internal interview was particularly eye opening. They focused on behavioral-based questions regarding experiences the candidates might have had in current and previous roles and how they would handle potential situations in the new assignment.
For Donna, "a few light bulbs went off" and it was clear she didn't know Josh as well as she initially thought. Coming out of the interviews, Donna and Maryellen agreed that there wasn't a bad decision to be made. Both Josh and Rebecca were strong candidates who could succeed in the role. Getting to know each other's team members was helpful and both Donna and Maryellen felt it was a useful lesson in what an interview can show you about someone you "know of" but haven't worked with closely.
The final decision has not yet been made.
*Not their real names.