Employers globally previously excelled at recognizing talent within their organizations during the pandemic. However, there’s been a notable decline in this practice, disregarding the value of nurturing existing employees to fill critical roles. This shift has led to missed opportunities, increased recruitment costs, and discontent among current employees witnessing the preference for newcomers solely based on their novelty.
This concern amplifies in the current complex economic scenario, especially with the hybrid work model’s emergence, automation, and AI impacts. Concurrently, India observes a decrease in unemployment, and its workforce displays a willingness to invest more time in securing suitable roles. Global data from the “Talent Climate” research series shows the average global time to hire in 2022 increased to 44 days, emphasizing the ongoing challenge of finding suitable candidates.
The prolonged time-to-hire rates intensify the challenge for employers in filling most positions, necessitating more rigorous candidate searches. Yet, internal hiring rates have dropped to a mere 24% of all hires, marking one of the lowest rates in recent years. During the peak of the COVID-19 pandemic, internal recruitment gained traction due to market constraints, leading to a significant increase in internal hiring rates, reaching 40% of all hires in 2020, significantly higher than the typical 30-32%.
This fluctuation in HR practices poses genuine challenges for organizations. Insisting on external hires for four in ten new employees incurs high costs, from job postings to onboarding expenses. On the contrary, internal hires assume roles up to 12 days earlier than external candidates, directly saving on time and associated costs.
Balancing these costs are the benefits derived from fostering internal mobility. Employees promoted or shifted internally within their first three years exhibit a 70% greater likelihood of long-term commitment to the organization, reflected in the retention rates where 62% of employees taking up different roles within the same company exhibit high retention. This loyalty stems from an increased sense of fulfilment and superior work experience. Internal hires feel acknowledged for their contributions and are motivated to remain with the company for the long haul. Additionally, with India’s growing prominence in the global economy, leveraging existing talent pools becomes imperative for meeting the demands of projected growth. Harnessing nearby talent solutions optimizes immediate hiring budgets and enhances long-term efficiency in an evolving economic landscape.
