When they have jobs to fill, here’s one place companies are spending more time looking for candidates:

Their own backyards.

More than 38% of all jobs in 2008 were filled by internal transfers or promotions, according to a recent report by recruiting consultant firm CareerXroads. That’s 10% higher than the number from 2007.

The main reason: the economy. Many employees have instituted hiring freezes, but that doesn’t mean they don’t have to fill key positions. Internal recruiting is the only option at some companies right now.

Promotions and transfers offer other benefits, such as lower recruiting costs and increased retention, because it shows employees there’s still room to move up in a rough economy.

Tags: Economy, internal recruiting, promotions, transfers