Why you will always lose a job offer to internal candidates

It’s beyond frustrating ... you’ve searched through dozens of job ads, spent hours writing the perfect application. You went through one, then two maybe even three interviews only to be told, ‘Sorry we’ve gone with an internal candidate’.

When you’ve heard this for once it’s easy enough to brush it off but when it happens multiple times, it’s enough to make even the most disciplined job seeker throw up their hands in surrender. When this happens it’s completely normal to question if you are doing something wrong and feel lost and frustrated. You’re not alone, a coaching client of mine Chris had applied for 10 positions all of which she was told were filled internally.

The cold, hard truth is that the majority of the time you will be passed over for internal candidates. This is nothing personal. In fact it has nothing to do with you personally at all. Instead it has everything to do with how employers want to source their staff. 

In order to avoid this frustrating situation and get the great jobs, you need to understand two things.

1. How we search for jobs is not how employers prefer to source their employees.

Your average person spends 90% of their job search time scouring the internet and applying for jobs online. However an employer’s first preference is always to hire internally. This means they will look to promote or move people within their organisation. The second preference is via referrals – this could be through a current or past employee, or a trusted contact. It is only when these two preferences are unsuccessful or tapped out, that they will move outside of the organisation and network and start looking in the public domain. This might mean posting a job on their website, a job board or with a recruiter.

The reason why employers prefer to fill positions with internal candidates or referrals is simple: they save money, time and effort. It is also widely accepted that these hires perform at a higher standard, require less ‘on-boarding’ time, less training, and they may reach minimum productivity levels faster because they are instantly a better fit with the team – and a less risky choice. After two years, 45 per cent of referral hires are retained, as opposed to only 20 per cent of those hired from job boards.

2. The second thing you must understand is that a large number of jobs are advertised after they have been filled.

It’s quite distressing to think that you are going to the effort of applying for a job when it has already been allocated to someone else. But the truth is that a lot of job postings are merely a formality. Many human resource policies require job openings to be listed on a job board (or their own website) for a period of time. Even if a new hire is an internal candidate or comes through a referral, the hiring manager is often still required to advertise the job in order to adhere to HR policy. This formality is stringently enforced in larger corporations, government agencies and the academic world in particular.

It’s tough to compete with internal candidates because even if you are superior to them in every way, they have the advantage of costing less time, effort and money (to hire them not necessarily their salary). Therefore it’s a no brainer for employers to go with them.

When I’m explaining this to my coaching clients, they immediately feel relieved to hear that it’s just the way the job market works and not them personally. However, despair hits quickly and they often say ‘Great, so I have to be an internal candidate to get the jobs’?

No, you need to become a referral candidate. To avoid the disappointment of going through the motions only to be passed over for an internal hire you need to tap into the jobs before they are advertised.

So how do you do that?

  • Start by targeting a company not a specific job ad. Research them, what is their vision, company culture, challenges, current projects and reputation.
  • Make contact with current or ex-employees to get the inside scoop on what the company wants in their staff, what their major challenges are and how you should approach them.
  • Do your homework to determine your fit to their organisation – how is what you can offer relevant to what they want? In other words, show how you can solve their problems or assist them reach their goals.
  • Find the person who has the power to help you or hire you. Identify who this person is, either by name or job title, then work backwards to figure out who can help you connect with them.
LinkedIn is a great resource for this that shows you how you are connected to others. Take the plunge and connect with them. The golden rule of successful networking is to give before you get. The way you network can broaden your opportunities; the way you connect with people establishes trust and makes you memorable. They will go out on a limb for you, even if they don’t know you well, when they believe you would be an asset to their friend, client or company or that you will make them look good for referring you.


Does getting a referral really work? Remember Chris who lost out 10 times to internal candidates? She got a referral and even better, she got her dream job.