If your organization is having a tough time finding the right person to fill a key role, it might be time to set aside the resumés and pick up your organizational chart. Many employers become so consumed with posting job ads and conducting interviews that they overlook the potential of their own in-house talent. Let’s review some of the upsides of internal hires, as well as some of the inevitable risks.
Cost-effective approach
Two of the biggest upsides to promoting employees to open positions are efficiency and cost-effectiveness. (For the purposes of this article, we’re assuming internal hires are promotions. In some cases, they may be lateral moves.)
It’s usually faster and easier to identify and meet with employees than to find and schedule interviews with outside candidates. And promoting internally is generally less expensive because you save on the costs of finding, recruiting and hiring. These costs include advertising on job boards and engaging with recruiters. Plus, internal hires won’t need onboarding and may require less training, depending on the position.
In addition, promoting employees can help boost morale and improve retention. One reason some employees leave their jobs is because they don’t see opportunities for advancement. Staff members might be less likely to feel this way if they see colleagues promoted to higher positions.
Another benefit is the level of familiarity you have with your employees. An external applicant’s resumé might look impressive, and the interviews could go great, but the individual’s personality might clash with your organizational culture once work begins. Or the person’s actual skill level might not match up to what was presented. You should already have documented records of internal candidates’ skill sets and performance histories.
Risks to consider
Naturally, for many positions, promoting employees isn’t risk-free. Some employees simply aren’t cut out to be managers, supervisors or to fill other “high stakes” roles. For example, a star salesperson might thrive out in the world selling but flounder when asked to sit in an office and manage a sales team.
Indeed, shifting more emphasis to internal promotions shouldn’t mean giving up on outside hires. The greater job market still offers a much larger pool of candidates. And new employees could provide fresh perspectives, innovative ideas, new skills and insightful experiences that might lead to more efficient processes and improved organizational performance.
Furthermore, recruiting outside candidates avoids the unhealthy competition that may arise when employees vie against each other for higher positions. Resentment often occurs among those ultimately passed over for promotion who now must report to someone who used to be their peer. For these reasons, it’s critical to carefully choose which positions to open to internal hires.
The right balance
Hiring internally is no silver bullet. For starters, if you promote an employee to a new position, you’ll need to fill that person’s former job! Then again, it does tend to be easier to fill lower-level positions than upper-level ones.
The bottom line is to ensure your approach to hiring is flexible and isn’t turning a blind eye to the cost- and time-efficiencies of internal hires. We can help you assess your hiring costs, compensation structure and other factors that play into staffing decisions.
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