Tesco is anticipating it will need to recruit 300 staff to its head office next year, and is planning for a further 400 staff switching jobs, according to a company employed by Tesco to supply software to improve recruitment and retention.

Tesco wanted to improve staff retention and save money on bringing in staff through employment agencies by recruiting internally, said Tim Richards, managing director of Bond Talent, which is supplying the new technology.

"There is a tendency for companies to go straight to an agency rather than look internally and see what is available in the talent pool," he said.

"I think it is very relevant for every organisation when the market is a little tighter and people are looking to reduce spend externally - and the obvious way to do that is to look internally first."

The numbers were Tesco's "expected volumes through their own analysis of the business", he added.

The Bond Talent software will be installed in the new year and will allow HR staff to manage the thousands of job applications it receives, as well as advertise the posts internally.

"Bond Talent will allow us to manage the thousands of applicants we receive through the Tesco.com website and offer the recruitment team improved search facilities. We can then identify which job would suit which person best," said Jane Smith, Tesco's head of resourcing.

"We will have the ability to reduce the amount of time spent on administrative tasks, while improving access to information - be that previous applications in the talent pool or tracking candidates throughout the recruitment process.

"We will also be able to assess our time-per-hire, a metric we have not previously been able to measure effectively. It will enable us to make far better recruitment decisions, for both internal and external appointments."

Return on investment should be achieved within 12 months, said Richards, adding that he was hopeful he would go on to win the contract to operate a similar system in Tesco stores, as well as its head office.