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Internal Promotion vs. Outside Hire

Advantages and disadvantages of promoting an internal staff member, as opposed to hiring from the outside:

As the economy improves, unemployment falls and baby boomers retire, competition for top performers intensifies. Employers need a strategic plan—one that includes both internal promotion and external hiring—to maintain a workforce with the required skills and knowledge to meet and exceed expectations.

An organization's workforce performs at a higher level when there's a strong internal-promotion process. Alternatively, when employees perceive that promotion policies are ignored in favor of external hiring, their loyalty and personal motivation decrease. When little or no upward mobility is possible, employees feel disenfranchised.

A recent nationwide employee-satisfaction benchmark study found:

  • 78 percent of employees indicate that, for accelerated career progression, it is better to be hired than groomed.
  • 69 percent are unaware of the career-progression systems within their organizations.
  • 64 percent would be willing to leave their jobs to follow a good mentor.

The results of this survey indicate that few companies have an effective internal promotion or mentoring program. There are times when external hiring is necessary. Advantages include:

  • It adds new job skills or knowledge to the organization's workforce.
  • When management perceives that employees have grown too complacent or lack a sense of urgency, they seek to bring in people who can change things.

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