Companies also spend less time on-boarding them which saves a lot of time and associated costs. There are many internal factors responsible for this.
Firstly, there is the compliance issue, where companies fear that if they continue to select candidates from an internal pool, there is a higher chance of disgruntlement, complaints, and lawsuits filed by employees who are not selected.
Thus, companies rely on self-nomination where employees proactively apply for jobs or positions of interest. While this might sound like a safe alternative, it is also not the best one because in this case very little is done to educate those who might not be actively looking for movement but might be an excellent fit for open positions.
The gap between talent and requirements persists. Secondly, the very thing that internal recruitment is supposed to boost can sometimes get adversely impacted — employee morale.
Employees who are not picked for positions or promotions might feel disheartened and end up looking externally for growth opportunities. Thirdly, there are restrictive policies that were once meant to enhance productivity and reduce turnover but may seem restrictive and claustrophobic to high-caliber employees. For instance, some companies make it mandatory for employees to have a tenure of one year in their current positions before applying for other roles within the same company.
Sometimes, the employee needs to get additional sign-offs from their managers. Loyal employees who would rather avoid uncomfortable discussions with their bosses are quite unlikely to apply for an internal role; instead, they would rather take up an external opportunity.
Lastly, and probably the biggest factor is pressure from current managers to restrict mobility. Every manager has those stellar employees on his or her team who have been around for a long time, who know the processes in and out, and who are excellent at their jobs. They are hesitant to nominate them for a different position because they are worried about the void that will be created once they leave.
A lot of these issues arise because companies are being short-sighted in their approach, with the focus solely on filling positions rather than investing in candidates.
For internal hiring to give positive results, there needs to be a culture of internal promotions, open and honest communication with employees about their individual development plans, and a system in place to fill vacancies that arise when employees move to different roles.
There are many factors to consider when deciding to hire internally as opposed to getting external talent. These factors depend on the company and job characteristics so that the right strategy for a firm depends on its context and situation. However, there are certain circumstances when a company can give preference to internal recruitment or, at the least, consider it before hiring personnel externally.
The first consideration is the cost of a bad hire. If the cost of a wrong hiring decision is significantly high for the company, it is best to go with an internal hire. For instance, the cost of hiring the wrong CFO is significantly higher than say, an inept project coordinator. This is the reason for many leadership and managerial roles being filled through lateral moves and promotions.
While both internal and external recruitment has been used to hire the top ten CEOs on that list, internal promotion is far more prevalent than the latter. External hiring enlarges the field of applicants. Look to employment and staffing agencies, print newspaper classified ads, set up booths at job fairs or recruit workers from technical or vocational schools and universities to find large groups of skilled and interested applicants. You never know for sure the kind of person you are hiring for a position when hiring externally.
Relieve some stress by promoting a current employee whom you know displays the desired work ethic and job skills. This reliable, convenient assessment avoids the gamble of hiring total strangers. A small business experiencing increased success and higher demand for its products or services might turn to external hiring to avoid disrupting a steady, secure work flow.
Promoting a current employee to an open position creates another open position that must be filled. Rely on external hiring methods for greater efficiency in expanding your work force.
Leonor Crossley has been a graphic designer and writer since , with entertainment and other articles written for "Max Magazine" in Jacksonville, NC, and various websites. By Leonor Crossley. When a company is thriving, for example, it usually builds on existing strengths.
During this phase, internal candidates tend to be a better fit. Or they may not have the courage to disrupt legacy thinking and relationships. When organizations look to an external candidate, it is often because they need specific skills not already available within the company. When approaching the question of promoting from within vs. The following practices can help foster that understanding:. Get a clear understanding of the talent that is currently available inside the organization.
EY strengthens its existing pool of internal candidates by moving them into different roles to help them gain new experiences and responsibilities, according to Nash. Ask yourself if hiring internally is a standard approach across the organization, and, if it is, whether it should be and why. To change that mindset, Sonsino instituted incentives for his recruiters to think inside first. Polycom also developed an internal career fair where recruiters staff tables at headquarters outside the cafeteria to share job and career information while nurturing their internal talent network.
The description should clearly and comprehensively state what a person needs to be successful in the role. Randell agrees. Having a clear approach to job evaluation, job posting and candidate assessment makes the process simpler for everyone, and ensures the best people are hired.
Understand what is unique about the role and the organization. Separate research conducted by Groysberg and Bidwell concludes that, while organization-specific skills requirements pose a major challenge for external hires, unique and strong organizational cultures pose similar challenges.
For example, the rapid changes occurring in both information technology and marketing mean it makes sense to consider external candidates when a chief information officer or top creative position becomes open. Ahlfeld stresses that cultural fit would remain the most important criteria in hiring an external head of creative.
But he would be more inclined to bring in an external person armed with new thinking and then ensure that the integration process focused on imparting the cultural history of the company to that new hire. Whether a new hire is stepping into a role from another company or from another area of the same organization, pay attention to integration. For many organizations, that means expanding onboarding efforts well beyond assigning desks and laptops, delivering employee handbooks, and reviewing benefits.
Should we interview candidates one-on-one or with teams? Should we hire from the outside or inside? Eric Krell is a business writer based in Austin, Texas, who covers human resource, finance and marketing issues. You may be trying to access this site from a secured browser on the server. Please enable scripts and reload this page.
Weighing Internal vs. By Eric Krell January 7,
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