Evaluating internal candidates effectively requires seeing colleagues with new eyes. Knowing how to approach these valuable employees differently and asking the right interview questions is key to promoting employee satisfaction—whether they get the job or not.

The outcome could be a highly engaged hire who is motivated to contribute and grow. In fact, when an employer is highly committed to internal hiring, employees stay at that company 60% longer. So how can you strike the right balance to make the best decision for your team?

In this guide, you’ll learn how to interview internal candidates without creating a negative experience for your colleagues. Here’s what you’ll find:

What is an internal candidate?

Internal candidates are employees who currently work for your organization and are applying to a new role. They may be interested in pursuing a promotion, a lateral move to a different team or location, or some other type of internal mobility opportunity that furthers their career.

What are the benefits of hiring internal candidates?

Hiring internal candidates offers concrete benefits for organizations, so it’s no surprise that internal mobility rates have increased 30% since 2021. Here are five advantages for employers and how they improve your life as a hiring manager:

Faster time to fill: It takes an average of 36 days to fill a position according to one estimate, although that number fluctuates depending on role and industry. Hiring internally can shorten this process by 10-12 days, since candidates are pre-screened for culture fit, have an accessible track record, and may not need full interview panels.
Better quality of hire: Compared to external candidates, 75% of internal hires succeed in their new role and are 32% more likely to be of satisfactory quality. Why? Because they’re already familiar with a company’s culture, offerings, and organizational structure, lessening the learning curve in their new role.
Lower cost per hire: The average cost per hire is $4,700. But since internal candidates take less time and resources to recruit, they cost 3-5x less than external candidates.
Improved retention rates: Not only do internal hires tend to be higher performers, they’re more likely to stay with an organization. Workers who have moved internally have a 64% chance of remaining with an organization after three years, according to LinkedIn data. Meanwhile, employees who haven’t moved internally only have a 45% chance of being around after three years.
Stronger employer brand: Candidates rank upskilling and advancement as top-five priorities. Yet only 33% of organizations offer internal mobility programs, and just one in five employees is confident in their ability to make an internal move. Promoting internal growth programs can give your company a reputational boost.

Why do internal candidates need special consideration?

Since internal candidates come with demonstrated performance and a track record — and represent a significant investment in development — it’s important that they go through a process that meets their unique needs. Otherwise, your company may not see the cost savings of internal hiring or may even run the risk of alienating engaged talent to the point of attrition.

Internal candidate rejections can increase turnover rates by 10%.
77% of companies have lost talent due to the lack of career development opportunities.

Four keys to interviewing internal candidates

Just like external candidates, internal candidates deserve thoughtful experiences tailored to their needs. Your job as the hiring manager is to ensure a professional, effective interview process for your colleagues. The following four considerations can help you succeed.

1. Provide a great candidate experience

Internal candidates should be given the same courtesy as external candidates, with timely communications as de facto. If you use an ATS, your hiring workflows can be configured to notify applicants at each stage of the interview process. It’s also important for employees to be able to find jobs easily and feel empowered to apply for them. A good communications strategy will include announcements of open roles in company channels.

SmartRecruiters makes it easy for any employee to learn about new jobs with the Employee Portal, which allows internal candidates to search and filter jobs, view employee-only jobs, sign up for alerts, and make referrals.

2. Define an internal candidate interview policy

Spell out your company’s policy for interviewing internal candidates. Some companies choose to give each internal applicant a hiring manager interview regardless of their qualification. That might not be realistic in other organizations. Choose based on what works at your company, such as offering each internal applicant a recruiter screening to start. Make sure that every internal applicant is acknowledged in a meaningful way, whether or not they are a fit.

SmartRecruiters offers intuitive and collaborative tools for hiring teams that streamline hiring workflows and collect feedback in one place.

3. Have a system for identifying internal applicants

When reviewing applicants, you can make sure that you don’t miss current employees if you use a system that automatically surfaces them in your applicant queue. Your ATS can help make this process simple, even when sorting through hundreds of applications.

In SmartRecruiters, internal candidate applications are marked with an employee badge, making it easy for both recruiters and hiring managers to uncover them. A customizable filter can also be used to bring employees to the top of the list.

4. Humanize the rejection process

It’s hard losing out on a role as an external candidate, but the stakes get much higher for internal candidates. You don’t want a rejection to impact their performance in their current role, or cause resentment among colleagues. One way you can help soften the disappointment is by telling them in-person or with a personalized rejection letter that outlines their strengths and the specific reasons they did not get the job, accompanied by suggestions for professional development.

Specialized internal candidate rejection templates saved in SmartRecruiters’ template library aid in thoughtful, considerate rejections of internal candidates. Just be sure to personalize the template to match the employee’s situation.

20 interview questions to ask internal candidates

Before conducting an interview with an internal candidate, consider three things: their role today, the role they’re looking to move into, and the gap between the two. This preliminary research will help you understand their qualifications before sitting down to talk.

During the interview itself, your goal as the hiring manager is to evaluate the candidate’s transferable skills, plan for upskilling, motivations for making the switch, and past performance (without mistaking it as a guarantee of future success). Here are 20 interview questions to help.

Motivation

Why are you interested in this new role within our company?
What future do you see for yourself in this career?

Collaboration

Which members of your department did you work with directly? What was the scope of the work? What was key to working with your team successfully?
How do you approach conflict resolution within a team?

Communication

Tell me about a project that did not go smoothly. What were the issues? How did you address these with the team/peer/manager? What was the outcome?
How do you give constructive feedback to your team members?

Performance

I’ve heard you worked on project [X] with [name]. Can you tell me about this project? What do you think were the main reasons for its success?
How would your mentor or supervisor describe your work?

Skillset

What transferable skills do you bring to this new role?
What makes you fit for the role? Tell us about relevant previous experiences or projects you’ve been part of.

Upskilling

How do you envision your growth in the company over the next few years?
Are you willing to undergo training to prepare you for the new role?

Change management

What would you do to help your replacement should you move on to this position?
Have you spoken about the position with your current manager? If so, what did they say?

Leadership

What are the traits you think are most important to be a good manager or leader?
How would your team describe your leadership style?

Culture fit

Do you enjoy working as a team or by yourself?
How do you handle stress or tight deadlines?

Resilience

Can you tell us about a mistake you’ve made in the past year? How did you correct it, and what did you learn from it?
How would it affect your current job if you were not selected for this role?

How hiring internal candidates boosts morale

Employees who seek to learn new skills are usually filled with enthusiasm when they land a new role. According to LinkedIn, internal movers are 49% more likely to develop diversity and inclusion skills, 27% more likely to develop emotional intelligence skills, and 21% more likely to develop change management skills than external movers. No surprise, all three attributes are markers of an agile workforce, now a top three business priority for CEOs.

For CityFibre, a high-speed fiber internet company based in the UK, facilitating internal mobility and career development for current employees became a main priority after a period of hyper growth. The company deployed the SmartRecruiters Employee Portal to promote internal opportunities and achieved 21% of hires from internal employees in the first three months.

The Employee Portal has allowed us to centralize and apply structure to our internal recruitment process. It ensures everyone has a great candidate experience. – CityFibre

Curious to learn more about how SmartRecruiters can help your company create a best-in-class internal candidate experience that engages recruiters, hiring managers, and applicants in one place? Explore the collaborative features and capabilities trusted by 4,000+ businesses around the world here.