Deciding between an internally or externally hire can be challenging. On one hand, it is nice to already know the employee you are placing in a role. On the other hand, bringing about a new employee provides fresh ideas and ways of doing things that can benefit your organization. As a result, you need to consider the benefits of both scenarios to determine which is right for your company.

Learn some benefits of hiring from inside or outside your organization to see which option better fits your needs.

Benefits of Internal Hires

• Employees who receive promotions already may have established relationships with their new managers. Additionally, this can help the employee begin producing in a shorter amount of time than a new hire. If the manager already is familiar with the employee’s performance, they likely understand their strengths and the areas they need to improve in. This provides early opportunities for ongoing feedback and coaching to improve the employee’s contributions and results.

 

• Rewarding your employees with advancement shows you value their career progression. This also increases employee performance and retention. The more your employees see opportunities to move up in your organization, the harder they are likely to work to reach their key performance indicators (KPIs). This helps reach company goals and improves your bottom line.

 

• Promotions increase employee morale. This upward mobility is a concrete indicator that your organization rewards high performance. Your employees are likely to want additional responsibilities that develop their leadership skills. The more skills and experience your employees gain, the more equipped they are for senior roles. This contributes to strong feelings of job satisfaction and company loyalty.

 

• Upward mobility in your organization helps lower your hiring costs. For instance, you spend less time and money advertising job openings, interviewing candidates, and negotiating job offers. Also, there is no need for onboarding because the employee already understands your culture, systems, and policies. Plus, less training may be needed for the current employee than an entirely new one.

Benefits of External Hires

• Hiring a new employee means you are not filling one role while opening another. When you promote an employee, you leave behind an opening. This creates a domino effect that can affect multiple positions and employees. There may be few internal candidates, if any, to move to the vacancies.

 

• Bringing aboard a new hire draws fresh ideas and perspectives that can benefit your organization. In contrast, keeping the same employees may result in continuing to use the same systems and processes to complete tasks. This can limit the number of new ideas that get developed, which lowers innovation.

 

• Hiring from outside your organization can improve your team performance. Otherwise, there may be more competition among your employees for a promotion. This can increase conflict, decrease collaboration, and lower team performance.

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