Internal Promotion: The Pros and Cons of Hiring from Within

Boss promoting worker showing respect and shaking hands

For any company, the hiring process for new employees can be daunting. Putting the best people in the right positions is a massively important aspect of business ownership and management that should never be taken lightly.

This is particularly the case when it comes to hiring for a senior role, as these employees will be responsible for your other workers. Yet you don't need to spend time creating an elaborate job specification and spending money posting vacancy advertisements: there is a strong case to be made for promoting your employees from within.

Indeed, internal promotion is often the most comfortable solution. However, it is not a decision that should be taken lightly – and it doesn't always work out for the best. Therefore, with this in mind, we have weighed up the various pros and cons of promoting internally – and highlighted the key points that you would need to consider.

This is what you need to know.

Pro: It's a Faster Process

Internal promotion is a much faster process, and if the situation is urgent, it's definitely worth considering hiring from within. You can assess your current employees to determine who is an ideal fit for the role, or if you have a larger workforce, circulate an internal ad and wait to see who applies.

To hire externally, you will first need to create a job description, which will need to be signed off by HR. Following this, you will then need to place your advert online, or liaise with a recruitment agency to get the process started.

This process can take weeks, from waiting to receive relevant applications, to filtering through them to decide whom to interview. Then, once the individual is hired, there is a bedding-in period where they will need time to become familiar with the responsibilities of the role, as well as your company's values, technologies and processes.

Hiring from within saves you all of these headaches.

Pro: It's a More Cost-Effective Process

Promoting internally is not just quicker: it's also much more cost-effective, as it eliminates the need to pay for expensive appraisal, HR, and recruitment costs. Indeed, according to Glassdoor, the average cost per hire in the US is almost $4,000, which includes job sourcing, pre-hire assessments, recruitment technology and more. Once hired, you also need to factor in training, benefits and other onboarding costs, which can vary depending on the complexity of the role and the individual's experience.

Pro: It Makes for a More Informed Decision

Hiring internally enables you to make a far more informed recruitment decision because you already know the person – and their skillset – well. You also already know that they are an excellent cultural fit for your company, which is a crucial aspect of choosing a candidate. Once you've made the decision, the onboarding time will be much shorter because they are already familiar with your company's practices and policies.

Pro: It Cultivates Trust

Promoting internally also means that the employee in question is likely to stay with you for a longer period. They already enjoy working for you; they are motivated, committed and above all else, trustworthy. This reduces the risk of hiring the wrong person, increases their retention potential and saves you on expensive hiring costs.

Con: You Have a Smaller Pool of Candidates From Which to Choose

Yes, recruiting externally is costlier and more time-consuming, but it comes with plenty of benefits – especially in the long run. For a start, you're exposed to a larger pool of potential candidates from agencies, the internet, and job boards. This is the best way to find top applicants from further afield, instead of relying on a much smaller group of candidates from within.

Con: It Limits your Talent Pool

An externally hired employee will bring a new set of eyes to your business. With millennials currently making up 25% of the workforce, bringing in a new generation of staff could do wonders for your business, from the emergence of creative ideas to fresh insights and perspectives.

For example, the latest generation in the workplace – Generation Z – are renowned for their fast-paced and innovative approach to working. A multigenerational workforce is the ultimate melting pot for mentorship, and a great way to refresh your company culture. Introducing new generations to the workplace could lead to improvements in your processes and productivity, and could increase your revenue considerably.

This is particularly relevant if the role is relatively new to your business. Your employees will possess other specialities and may be unable to fill your required skills gap. By relying solely on internal hiring, you may be missing out on the chance to hire people with new skills and ideas.

Con: It Creates a Gap in Your Existing Workforce

Another disadvantage of hiring internally is that an existing role will become unoccupied. Once an internal employee fills a new role, their old position will become vacant. This means there's still work involved in the internal recruitment process, which could disrupt your business' operations and negate any time saved by promoting from within.

Of course, if the position is senior, then it could be worth it as the internal hire will have gained valuable knowledge and experience during their time working with your company. This will speed up their training, making them a great addition to the senior team. However, if the role is more or less the same level, it might be more straightforward and quicker to hire externally.

Con: Can Cause Potential Conflict Amongst Employees

Promoting internally can lead to all sorts of internal conflict that can negatively impact your team's productivity and performance. Employees may feel they need to compete with one another to get ahead, and if they were considered for a role but not hired for it, they could feel resentful to the colleague or external candidate who is ultimately hired.

It can also be difficult for such individuals to command authority, especially if their subordinates are used to being equal to them in seniority.

Promoting Internally: Is it Worth it?

How you hire senior talent depends on your needs as a business, and on the skills of the job you need to fill. It's also vital to look at the bigger picture. If you are looking for a highly skilled individual, it probably makes the most sense to hire externally as they will bring with them fresh perspectives and ideas, which will contribute to the long-term success of your business.

It also depends on the situation your business is currently facing. If your business is faced with a crisis and needs a leader, and you have exhausted all of your options internally, then it's probably wisest to look externally.

Remember that any hiring mistake, such as rushing the process with an internal promotion, can be incredibly costly in the long run. Be patient before making your decision, and be sure to find someone who can do the job efficiently.

While looking towards your current staff is the first step, don't limit yourself to them. Assess the job, the responsibilities, as well as the internal and external talent pool. From there you can then decide whether to hire from within or recruit externally.

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