Getting the right talent into the right roles is one of your most important tasks, but is it better to promote from within, or is hiring from outside the ideal solution? The answer depends on the details of your company’s particular situation and needs.
Internal vs External Recruitment: Here are the General Pros and Cons for Each Approach
Hiring From Within (Internal)
Finding someone from within your own organization is often seen as the “cheaper” route, but there are real, constructive reasons to find an internal solution. The biggest advantage of an internal hire is their prior familiarity with the organization’s culture and operations. An employee promoted internally is also naturally going to be more loyal and more motivated. Furthermore, it sends the message to all employees that excellence is noticed and rewarded. Additionally, having a reputation for doing so doesn’t hurt when it comes to recruitment.
But internal hiring only makes sense if you have the right talent available, otherwise, you may spend time and money teaching them skills. Giving a job to someone who is a poor fit or not capable of adequate performance - for example, promoting a skilled programmer to an administrative or supervisory role - only sets them up for failure and will end up costing you in the long run. You’ll also have to be on the watch for symptoms of corporate group-think: over-reliance on internal hiring will eventually result in a lack of different viewpoints and stifle the innovative spirit tech companies need to thrive.
Recruiting From Outside (External)
Choosing to source someone from outside your organization allows you to access a wider variety of candidates. With a wider pool of candidates, you can be much more selective about the skills, education and experience you need. New people bring new perspectives to shake up organizational inertia, and outside hires send the message to your current employees that promotions aren’t guaranteed.
Conversely, outside hires are more expensive, take time to find their stride, and run a greater risk of not working out at all: according to a study done by Matthew Bidwell, an assistant professor at the University of Pennsylvania’s Wharton School of Business, outside hires receive consistently worse performance reviews for their first two years in a new job than those promoted from within, are more likely to be laid off or fired and are more likely to choose to leave of their own volition than an internal hire.
Does your company have trouble finding the right talent? Get help from Sparks Group, the leading provider of staffing solutions in the Washington, D.C./Baltimore metropolitan area.