The Risk No One Audits: How Internal Hiring Quietly Undermines Progress

Internal mobility has long been regarded as the hallmark of a healthy organisation. When done well, it rewards loyalty, recognises institutional knowledge, and keeps top performers engaged. In principle, it reflects a strong commitment to progression. In practice, it’s often something else entirely.

Despite being framed as a strategic advantage, internal hiring frequently operates in a blind spot — one where consistency, scrutiny, and meritocracy are too often compromised. For all the investment in external recruitment process — from competency frameworks to behavioural assessments — internal moves are still governed by informal conversations, variable expectations, and a high tolerance for subjectivity.

At a large regional housing association in 2022, an internal promotion resulted in team conflict, a grievance process, and the eventual exit of two longer-tenured colleagues. The problem wasn’t the selection itself, but the way it was handled. No transparent process. No interview. No communication. The manager in question had simply “tapped someone on the shoulder,” and the rest of the team learned about the appointment on a Monday morning email. HR was consulted only afterwards.

This sort of scenario is more common than most leaders admit. Internal moves can bypass scrutiny — not maliciously, but out of convenience. “We know what they can do.” “They’ve been solid for years.” “They’re the obvious choice.” And yet, when asked to articulate why one individual was advanced over another, hiring managers are rarely able to refer to a defined standard.

The result is inconsistency. In one department, internal promotion requires a panel interview and a business case. In another, it’s a quiet decision between two senior leaders. Some employees are encouraged to apply; others are discouraged from “rocking the boat”. This inconsistency erodes trust — particularly for employees who don’t have the same access to informal networks or advocates.

Then there’s the question of readiness. It’s often assumed that internal candidates will “hit the ground running” because they understand the culture. But culture familiarity is not the same as role preparedness. When a high-performing individual is promoted without adequate transition support, they may end up struggling in a new role that requires entirely different capabilities — leadership, delegation, cross-functional influence — none of which were tested before appointment.

A financial services firm in Manchester found itself backfilling a senior operations role twice in 18 months due to internal candidates failing to deliver in the position. Post-exit interviews showed neither had received role-specific development before stepping up, and neither had clear expectations set during the transition. The assumption had been that their strong work history would be enough. It wasn’t.

These aren’t arguments against internal mobility. Quite the opposite. When it’s well-governed, it can be one of the most effective levers for engagement, performance, and retention. But it must be professionalised. There should be as much attention to fairness, transparency, and rigour as there is in external hiring.

This starts with audit. Very few organisations can tell you — in data terms — who is progressing internally, how those decisions are being made, and whether the outcomes reflect equity or effectiveness. HR functions track external hiring with precision but often have only anecdotal insight into internal career pathways.

Then comes accountability. Line managers should be required to document the rationale for internal appointments — not as red tape, but as reflection. “Why this person, now, for this role?” It is a question that sharpens thinking and protects the organisation from decisions driven solely by instinct or convenience.

Lastly, there is follow-through. Internal hires should be assessed not only at selection, but in performance — measured over time to determine whether internal mobility is genuinely driving value. If not, then it isn’t progression — it’s recycling.

Organisations spend millions on attracting external talent. They refine employer branding, candidate experience, and onboarding journeys. But once someone is inside the walls, the structure becomes softer, the process looser, and the scrutiny more casual.

That is where risk lives.

If internal hiring is to be the cornerstone of future workforce strategy — as so many organisations claim — then it must be subjected to the same standards, the same analysis, and the same discipline as external search.

Anything less is not just a missed opportunity. It’s a quiet compromise that accumulates over time — unnoticed until the consequences start to show.