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Internal vs External Hiring?

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This article originally appeared here.

The Question of the Month is provided by Enquiron®, a company wholly independent from Federated Insurance. Federated provides its clients access to this information through the Federated Employment Practices Network with the understanding that neither Federated nor its employees provide legal or employment advice. As such, Federated does not warrant the accuracy, adequacy, or completeness of the information herein. This information may be subject to restrictions and regulation in your state. Consult with your own qualified legal counsel regarding your specific facts and circumstances.


We had an employee leave employment in one division of our company, leaving the position vacant. An employee from another division showed interest in the vacant position and emailed the managers to request an interview. The two managers had been planning to post the job externally and are thinking of not considering the internal applicant because her department is short-staffed, and her managers are already really struggling. Would there be any discrimination issues with not considering this internal candidate?


It is generally a business decision whether to consider internal candidates for a particular position. There is no specific requirement that an employer consider internal candidates. However, if a company has a policy regarding accepting applications from internal candidates, that policy should generally be followed. If the policy does not provide for the flexibility that is needed, it should be amended and the new policy communicated to employees.

It is common for employers to request approval from an internal candidate’s current manager before making an offer to the candidate or authorizing a transfer. However, you may wish to consider the effect that rejecting an applicant’s request due to the needs of their current department will have on the employee’s morale and their future employment with the company. An employee who is otherwise qualified for the position but is passed over for this reason may become disgruntled and may end up leaving the company altogether.

An employer or manager may think that keeping an employee in their current position would be the best result for the company as a whole. However, employees will also want to prioritize their own career interests and it is generally recommended for managers to support qualified employees in their professional development. It cannot be guaranteed that an employee will be satisfied with an employer’s unilateral decision that the employee will not be permitted to work in a different department. An employment decision that does not support an employee’s interest in advancement could lead the employee to seek that advancement outside the company. If the employee is otherwise well-qualified and valued, the employer could be losing a valuable asset while also failing to keep original department well-staffed.

Employers should take care to ensure that any employment decision should not discriminate against employees based on any protected classes under federal or state law. Even if discrimination based on a protected trait is unintentional, it is still unlawful. However, on its own, status as a current employee is not a protected trait and it would not be illegal discrimination to not consider internal candidates. However, fairness could still be an issue in this type of situation, especially if other current employees from other divisions are considered. Ultimately, the employer will need to make a decision based on the needs of its particular workforce and its specific priorities.

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