Internal Promotion vs External Hiring for a Growing Business
Whenever your company has a new role to fill, regardless of how senior the position is, finding the right person is essential. Every single employee is a vital cog in your business’s machine, and the individual you invite to fill a gap in your corporate structure could be the difference between impressive growth and total disaster. As such, the pressure is on to find the best candidate, but that isn’t an easy task. When surveyed, 67% of recruiters insisted that it’s harder to fill roles now than it was five years ago.
One of the biggest decisions you’ll have to make is whether to offer the opportunity to a current employee, or look for talent outside of the organisation. Unfortunately, there’s no right answer, with each approach having its own merits. Examine the benefits of both strategies in order to decide whether internal promotion or external hiring is the best course of action for your business.
Shows loyalty to employees
According to executive recruiter Karl Alleman, many companies have a better chance of retaining employees by “recognising who their top talents are and then telling them that they’re top talents”. Offering an employee a promotion is the perfect way to demonstrate this, especially if you’re concerned that some members of your team isn’t committed to your business. Career progression is hugely important to your current workforce—70% of employees say training and development opportunities have determined whether they remained in a job. And giving someone a new, senior role proves you’re willing to help them, and your other employees, progress up the career ladder. Showing loyalty towards them will help earn theirs in return.
Consistent company culture
Hiring internally means that potential candidates will already be fluent in your company’s systems and processes, and they will continue to support your business’s values. With this in mind, it’s safer to promote one a current employee, as they will already have proven to be a perfect fit for the organisation. There won’t be any personality clashes either, because this individual is already able to work within your team, but hiring someone new risks introducing a disruptive force to the office. Considering 58% of employees have left or considered leaving their jobs due to negative office politics, this is something you will definitely want to avoid. Promoting an existing employee maintains a consistent work environment, and ensures office morale remains high.
Saves time and money long term
As you don’t need to pay for job advertisements or recruiters when you promote internally, this route is cheaper than external hiring. It also reduces the time you’d otherwise have spent interviewing, as you won’t need to be as thorough, and it won’t be necessary to wait for background checks or references either. What’s more, the on-boarding process will be much quicker, since current employees will require less training before they’re ready to work in their new role. Therefore, internal promotions could be preferable for organisations with limited resources, or for those wanting to fill a role quickly. If you’re a tech company, for example, it could take you 65 days to fill a vacancy—you can significantly reduce this period by examining your current talent.
Wider talent pool
Perhaps the biggest advantage of external hiring is the ability to cast your net wide. While internal promotions limit you to those already working in your organisation, external hiring gives you a much larger talent pool to choose from. This is especially important considering the UK is in the middle of a so-called talent shortage, with 50% of businesses struggling to find suitable candidates for their vacancies. If you believe your organisation is missing some of the most important workplace skills, like critical thinking and collaboration, it’s probably within your interests to broaden your search for a new hire. These candidates will have developed different capabilities within other businesses, which could now prove beneficial to your own.
From increasing productivity to improving your brand’s reputation, there are lots of good reasons for having a diverse workforce. And according to research by the Boston Consulting Group, having more diverse company leadership results in “more and better innovation and improved financial performance”, as merging multiple unique perspectives can bring ideas and solutions that may not have otherwise been considered. Sticking to the employees you already have deprives you of the chance to introduce variation to your team, leaving you bereft of its benefits.
Sometimes all you need is a fresh pair of eyes to solve a problem or spot a new opportunity, and this will be far more likely if you opt for an external hire. Current employees will be used to the established way your company operates, but new recruits who have learned the tricks of the trade elsewhere will be better placed to point out what may be lacking. Though controversial, it may also be worth considering poaching employees from competitors. With 70% of those currently in employment actively seeking a new job, you could provide a great candidate with an enticing challenge, while also gaining an insight into a rival business that you’re hoping to surpass.