Do you have to offer vacancies to existing employees before looking external?

Gemma O'Connor - Head of Service

October 11 2023

First published: June 26th 2013
Last updated: October 13th 2023

Recruitment affects every employer. Getting recruitment right can be the difference between success and failure.

When you pare recruitment right down, it's simply a process whereby employers identify a vacant position in their company and then take action to find a suitable candidate for the role. Sounds simple, right? However, before you fill a role or even interview a candidate, you might wonder if existing staff could be suitable or even be legally entitled to apply for the open position.

So, in this post, we’ll take a look at what to consider when you have a vacancy and in particular whether that vacancy should first be offered to existing employees.

What are my legal obligations as an employer?

First of all, there is no specific legal obligation on you, as an employer, to advertise a role either internally or externally. While deciding not to advertise a vacancy is perfectly legal, filling the role without advertising may lead to allegations that the recruitment process was not fair and transparent. In worst case scenarios, candidates who feel they have been discriminated against may seek compensation.

Know your own company policies

When a recruitment process begins, it’s important to ensure that your managers are entirely familiar with any relevant internal company policies. Although your managers may know that there is no legal obligation to advertise a position internally, are they familiar with the specifics of your business’s own recruitment policy? It's important to be mindful that your business may have certain recruitment policies that require you to first advertise any vacancies internally. If you don’t comply with the terms of your own policies, there is a risk that existing staff could submit a grievance.

Are there any Trade Union agreements to consider?

Another consideration concerns trade union or collective agreements. It’s not uncommon for trade union agreements to include provisions around vacancies first being advertised internally. So, make sure your managers are familiar with any internal policies that have been agreed with trade unions. Failure to advertise a vacancy in these circumstances will likely lead to a dispute with the trade union. Remember, it's crucial that all managers are fully familiar with your policies around recruitment.

Examples of employee claims

So when does a failure to advertise internally result in an employee claim? Employment equality legislation prohibits employers from treating both candidates and employees differently based on certain characteristics.

Equality claims tend to arise most frequently during internal promotion rounds. Complications can surface when one particular individual is chosen for a promotion without the role first being advertised or put through an internal competition process. Staff who are passed over for promotion may make allegations that the failure to open the role to competition constitutes unfair treatment.

The cases of Sinclair -v- Intel Ireland Limited and Wilson -v- The Adelaide and Meath Hospital are two such cases where employers were accused of discrimination for alleged failures to effectively advertise internally.

Getting recruitment right

It's important for your business to ensure that you have the right people in every role. Your approach to new vacancies needs to promote the development of your existing employees while also identifying skills gaps to be filled by suitable new candidates. While a blanket policy of making sure internal candidates are made aware of vacancies has certain advantages, each vacancy will require an individual approach.

Reasons internal recruitment works

One of the biggest advantages of recruiting internally is that your existing employees are a known quantity. You know their track record, you can get feedback from their manager about their skills and abilities and ultimately make an informed decision about whether they are capable of stepping into the vacant position.

From the employee’s perspective, they already understand your company and are familiar with your systems, culture and practices. As they know how everything fits together, this cuts down the time spent on training and allows the internal candidate to hit the ground running.

Other advantages include moving the internal candidate into the role without having to wait for notice periods or restrictive covenants to expire. And of course, you already have their relevant paperwork. One of the biggest benefits of hiring an existing employee is that recruiting internally sends a message to all your staff that they can progress within your business.

Reasons internal recruitment may not work

On the other hand, there are some disadvantages to internal recruitment. While one of your existing employees may be the best internal candidate, there may be better candidates available outside your organisation. Moving an employee from one position to another also creates another vacancy that you will have to fill. External candidates could also bring fresh approaches because they have no preconceptions about how the work should be done. Additionally, if an internal move is not managed appropriately and transparently, it can be demotivating to the rest of your team. This will particularly be the case if there is a perception that career progression is not based on merit.

Help with recruitment is at hand

Whether you fill a vacancy internally or externally, it's important to remember that the only advantage you can provide to internal candidates is the opportunity to apply for the position.

When filling a vacancy, you must offer the role to the best candidate to avoid allegations of unfair treatment and to ensure the continued success of your business.  

Getting your recruitment right can be a difficult challenge for many business owners who prefer to concentrate on the tasks they do best.

If you’re facing any HR issue, from recruitment to retirement, your Peninsula advisers will help you get it right.  

Not a Peninsula client? Get any HR query answered by a professional by calling 1800 719 222 for a no-obligation chat

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