Should you hire internally or look outside?

Employees are hired with one sole purpose – to benefit the company’s goals and make them the most professional and competitive in its industry.

Whether they are hired to fill new or expanded positions or replace existing employees who have changed employers or retired. Employers are faced with the decision about whether to promote an employee internally or to seek out new candidates from outside the company.

There are pros and cons to each of these choices, and in this week’s blog post we aim to highlight these from both the organisation’s and candidate’s point of view.

Internal Promotions vs External Recruitment

Advantages and disadvantages of promoting from within

Advantages:

  • A position can potentially be filled much quicker – The recruiting company can reduce the cost and time in advertising the job vacancy and training new individuals for the job as the promoted employee is already familiar with organisation policies, culture, etc.

  • The organisation knows employees and have detailed records from previous supervisors – You already know what you are getting. You already know the person you are dealing with, so you can easily judge their performance, character, skills, etc.

Disadvantages:

  • Narrowing of thinking and stale ideas – “inbreeding”

  • Creating a vacancy that will need to be replaced. Unless the existing employee’s position is being eliminated when he/she takes over the new assignment, there will be a vacancy left behind, which will also need to be filled. So, eventually, the company or business might still find itself looking for someone from outside to fill this.

Advantages and disadvantages of hiring externally

Advantages:

  • A wider choice of candidates – bigger talent pool; could attract skilled applicants and put the organisation in a better position.

  • Provide new ideas and fresh perspectives – “fresh blood”; new insights from other industries

Disadvantages:

  • Search can take longer and cost more

  • Less information available on applicants – A company only has a resume and possibly a few examples of work to initially judge the candidate on.

Thinking from the candidate’s point of view

A hard working employee has been tracking their accomplishments and stayed on track with their goals for their career and personal brand within their current organisation. They’ve made all the right moves to ensure they could be a front-runner to obtain a promotion at the company they currently work at. However, they’ve also been seen a similar position at another company. What job should they go for? Let’s think from their perspective.

Changing jobs can be a less than comfortable experience, especially if there is nothing wrong with the one they already have; they may also be in a position of responsibility, supporting a family, paying off that mortgage and other bills.

However, it can be tempting to take a job in another company or “job hop” as it’s sometimes called, when it could potentially be more suitable or offer higher pay.

If a candidate wants to go for an internal promotion, they may have an edge over other external candidates – knowing that most companies prefer to promote from within rather than go outside to fill positions. However, if they go for the job outside, they can also be looked at favourably upon because of their unique set of skills and new ways of thinking that the other company may not have.

Candidates may look at moving to another company as an opportunity to gain more varied experience, however many are aware that people may question their staying power. Potential employers are likely to question “If I invest time and money in training this person, will they stick around long enough for me to reap the benefits?” Job hoppers know that they will have to prove themselves all over again when they start a new job.

The Bottom Line

Deciding whether to hire internally or externally is based on many considerations, understanding the motivations of both the candidate and the organisation itself can help make these hiring decisions. While it is often more cost-effective to hire an existing employee, there are also often good reasons to consider an external candidate. Does the role you are trying to fill require a fresh perspective for the position? Maybe the organisation requires stability, and a smooth transition.

Ultimately, the employer must weigh these pros and cons for the particular position to be filled, the company itself and the industry it is in.

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