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This question is about internal applicants only.
Yes, internal applicants do have to be interviewed. Interviewing your internal candidates is one of the best ways you can give your employees full and fair consideration for a job. This way, if you don't end up hiring them, they'll at least know they were given a chance.
This isn't just considerate, it's also beneficial for the company, as it's more likely that the candidate will stay at the organization even if they don't get the new job.

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