Pretend you have an important position you have to fill. Do you hire from the outside or do you promote from within?
This is a very important question you have to answer, and it is imperative that you weight the costs and benefits of each strategy.
Why You Should Promote from Within
Increased Employee Motivation
Promoting from within is a great way to motivate your employees. It lets them know that their goals for career growth can be attained within your company with just a little bit of hard work.
Promoting from within ensures your staff won’t feel as if their job status will remain static while under your employ. Instead, your staff is given an opportunity to grow and further their career.
Not only will this make your employees want to stay and work for you, but will also make them want to work harder to receive a promotion.
Retain Top Talent
If you don’t promote from within, your staff will be under the impression that they will have to leave your company in order to grow.
Losing talented staff members is expensive and potentially damaging to your business. By promoting from within, you increase your chances of retaining talented employees and ensuring they wind up in a position that suits them and your company well.
You Provide a Culture that Values Hard Work
Having a promote from within policy reinforces the value of hard work. Your staff will understand that they have a chance to succeed in a new position if they work harder and prove themselves worthy for that position.
This will not only motivate people to work harder for a desired position, but your employees will also appreciate the hard work of others. This is great for productivity.
Your Staff Will Know They are Favored
You don’t want your staff to feel as if they are less favored than an outsider with experience at another company. You want your staff to feel as if experience within your company is preferred above experience elsewhere.
You also want your staff to know that their history with your company has not gone unnoticed and that you’d prefer to hire someone who has already provided you with something of great value.
It will be Easier to Identify Qualified Candidates
It is much easier to identify a qualified candidate who you have already worked with. You know their credentials, qualifications, areas of improvement and if they are capable of handing a new position.
This makes it very easy to select a candidate. You have firsthand knowledge of ones experience and expertise, rather than just a resume. It is a much safer bet to hire based on what you have already observed in ones job performance and it will also save you a lot of money in hiring costs.
Less Training of Candidates
For new hires, there is always an seasoning period where new staff members must get used to the new culture, company and social environment.
This is not so with existing employees. Promote-from-within employees need not take company-level training or get acclimated with the social environment. All they need is training for their new position.
This makes for less expensive training and less loss of productivity.
The Benefits of Outside Hiring
You’ll Bring in a New Perspective
This is probably the most important reason to hire someone from the outside.
Having a certain way of doing things in a company is great. But over time, employees may get a little too used to doing things a certain way, and problems will begin to go by unnoticed.
Also, better ways of doing something can go by undiscovered.
An outside hire has experience in other companies, possibly even with competitors, who may know of some industry best practices you can benefit from.
An outside hire can also bring a fresh perspective during brainstorming sessions. Vetted staff members may be slowly getting uniform in their idea generation and may have developed a closed mind to new ideas.
Bringing in a new outside hire is a great chance to introduce new ideas and give your existing staff a quick burst in new ways of thinking.
Replenish Your Labor Supply
If you only maintain a promote from within policy, your are eventually going to run out of employees in certain positions.
Hiring candidates from the outside not only allows you to bring in new perspectives, but also gives you more staff members to develop. You’ll have more flexibility with promotions, and not have to worry about running out of staff members in certain positions.
You Can Hire Someone with Existing Experience in the Position
Hiring someone from the outside gives you the opportunity to leverage existing experience for the position you are looking to fill.
While a new hire may need some training to get acclimated with the company, they may require less training to effectively manage or lead a department.
Some productivity might be lost during a period of acclimation, but an experienced new hire will require less time to get comfortable with the duties of this new position.
Less Risk of Potentially Harmful Cliques
Existing employees might have established friendships or cliques with other staff members.
This isn’t necessarily a bad thing, but can cause trouble if one gets promoted ahead of the others. It can create tension among friends, or it can invite collusion or fraud.
Bringing in someone new ensures this isn’t the case. A new person might also be able to identify potentially dangerous cliques you might have overlooked.
Training Flaws will be More Apparent
Existing employees already know what your training is like and will know which material to pick and choose from.
New hires, on the other hand, will more easily make a training flaw visible, since they won’t be able to distinguish between useful and not useful practices.
This may sound like a bad thing, but being able to identify training flaws in your programs is a great opportunity to improve, so you can better train future employees and ensure these mistakes will not be made again.
Gives a Greater Sense of Competition to Existing Employees
If employees know they have to compete with outside hires, they may work extra hard to try to get an open position.
Having a feeling of entitlement to a position is not good for morale or productivity. So by establishing that selecting an outside hire is an option, you ensure your staff won’t try to slip anything past you.
. . .
Ultimately, you want a balance between promoting from within and outside hiring. Since there are very good reasons to promote from within and hire from the outside, doing both will allow you to mitigate the drawbacks of each and enjoy the benefits of both.
Are there any other benefits or drawbacks to the promote from within or outside hire strategies?