I think it is important that existing staff get opportunities to apply for any new roles you're looking for. This can help you to help them with their career plans, will aid retention, and someone internal will hit a new job with an existing network and familiarity with your organization. Quite aside from all this, a lot of countries have legislation requiring you to provide equal opportunities to internal and external candidates!
As well as your usual interview process, there are a couple of additional things I've found it pays to look into. Firstly, make sure you know why they want the role - it's important to filter out those who might be clutching at the role for progression for progressions sake. Thats not a bad thing to ask external candidates too. You should also check into what the internal applicant's succession plan is for their current role in your organization - sometimes you're no better off just by moving a hole around the company.
You should also be paying attention to any patterns that seem to be emerging. Does it look like a disproportionately large number of people from a certain department, role, or manager are always applying for other things in the company? If so, you might have something unsustainable going on that you should look into.
Ultimately, internal candidates are not always the best candidates, and sometimes the right thing to do is bring in new thinking, but it is important they get a fair chance.
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