Promote from Within or Hire Externally?

When looking to fill a vacancy—especially one that is a position of leadership—does your organization look internally, externally, or both?

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Prospective job candidates can be found within the organization or external to the organization, and there are pros and cons to each approach. This is especially true when the role represents a promotion for internal candidates. Let’s take a look at some of the pros and cons to each option.

Pros to Promoting from Within:

  • The employer already knows what to expect from the employee’s performance.
  • There should be a shorter learning curve because the individual is already familiar with the organizational culture, team, and processes.
  • The individual may already have established relationships with the team, clients, and vendors with whom he or she will be working in the new role. This can make for a smoother transition, and it could improve continuity for clients.
  • The recruitment costs may be considerably lower because there will be a reduced need to advertise and likely a shorter overall process.
  • Filling the role may be much faster because you can streamline the process and don’t have to wait as long on applications to roll in and interviews to be set up with people who are not already there in the organization.
  • Promoting from within can show all employees that career development and progression are important to the organization, which may help with retention of employees overall. This could also influence other employees to improve or keep up their good performance, with the hopes of being promoted when the time is right.
  • Someone who has been with the organization already knows many of the organization’s problems—and may be in a better position to solve some of them sooner in the new role.
  • Promoting someone may improve loyalty for that individual over the long term.
  • If the organization already has someone in mind for the role, he or she can be approached directly, even if he or she didn’t apply on his or her own.

Cons to Promoting from Within:

  • Promoting someone could cause resentment among peers who were not selected for the role, which could have effects on employee morale. There could be favoritism at play, or employees may think there is, even when there is not.
  • Sometimes, individuals have a difficult time transitioning from team member to team leader, and there may be friction and frustration. This can be because the other team members have difficulty accepting their peer in the new role.
  • Promotions may still require additional training in the form of managerial training (if applicable). It’s a common problem: not all high performers are great leaders. If promoted into a leadership role, they may not perform as well, especially without training on the soft skills required. Additionally, someone could be promoted beyond his or her capabilities, which can be frustrating for everyone.
  • The team is still left with a vacancy to fill, just a different position. So, the savings may be minimal or even nonexistent when taken as a whole. This can also cause resentment if one team seems to be frequently “stealing” employees from other teams.
  • It’s difficult to change company culture—if that’s a goal—when the same people are kept long term and promoted. It can lead to less innovative thinking and less momentum with improvements in some cases.

Now that we’ve taken a look at the pros and cons to hiring from within, stay tuned for tomorrow’s Advisor, where we’ll consider some of the pros and cons to hiring an external candidate instead.

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