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Promoting From Within vs External Hiring

Many factors have to be taken into account when making decisions for a new position, such as creating the salary range and defining the job description. One of the most difficult is often whether to promote an internal employee or bring in an external hire.

Hiring someone from the outside is a choice that’s made 18 percent more often, according to a report by Inc., but the publication also notes that research has found it costs a company 18 to 20 percent more than promoting from within. Of course, it’s not as simple as that either. You’ll want to consider some of the advantages and disadvantages of each.

Hiring Externally

Fresh ideas and New Skills. External candidates often bring new, fresh ideas that can result in positive changes within the organization. They may also have new skills that have the potential to take your company to the next level.

The downside? There’s also the possibility that a new external hire won’t be able to adapt to your working environment and fit in with your current team members.

More Candidates to Choose From. Obviously, the pool of external candidates will be much larger than candidates already working for your company. If you have applicant tracking software, you’ll be able to expand your reach significantly, attracting more of the right candidates while keeping them engaged, which makes it easier to hire them.

The downside? This also means it will take a lot more time to hire someone externally, but if you have the software implemented, the screening time can potentially be cut from days or weeks to just hours, narrowing down the pool of applicants to include only those who are qualified.

New Business Insight. External recruiting means you’ll get a wide range of applicants with varying work experiences who’ve gained knowledge from working at different companies. By hiring one of these candidates, you’ll get insight into your competitor’s businesses and perhaps new and innovative business practices.

The downside? Candidates coming from your competitors might have nondisclosure or non-compete agreements or other contracts that will affect their ability to do their best job for your organization.

Promoting From Within

Reducing the Time and Cost It Takes to Hire. When you promote from within, it will save you the time it takes having to find, attract, and hire the best candidate. You’ll have instant access to talent who is already pre-screened and a culture fit.

The downside? While it saves time and money to promote from within, it can also rust company culture with employees who become too comfortable with the current procedures, rendering them unable to spot inefficiencies and develop new ideas to fix them.

Better Employee Morale. When you promote from within, it sends a message that you value your employees and are willing to invest in their career growth. Your current staff will feel more excited about the possibilities for advancement, boosting morale while motivating them to do better.

The downside? Some of the employee’s co-workers may not agree with the promotion, becoming jealous, which creates tension that can hurt productivity.

Faster Onboarding Experience. New hires need time to get to know the company’s policies, practices, and people, while internal hires will already be familiar with that, they just need to learn their new role and responsibilities.

The downside? Just because a current employee is an ideal fit for a new position, that doesn’t mean he or she won’t need some training. Hiring external may mean the candidate already comes with all the required skills to be productive immediately.

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