Are you in, or are you out?
HIRING and retaining the best people for the job helps organizations sustain their business while also helping them adapt and thrive in an ever-changing business landscape. While some focus on looking outside the organization for new talents, others develop and implement a succession plan to increase their pool of talents. When it comes to recruiting talent for new positions, should you look within the organization, or hire someone from another company? Here are some considerations:
Internal hires already know the work culture of the organization. And most often, they understand that while there is a formal organization chart, they know that the best people who can help them are not necessarily the ones in position. It is easier for them to navigate their way around office politics and avoid possible roadblocks in getting the work done.
On the other hand, external hires bring new ways of working in the organization. They can provide insight into what other people do not see because they are too immersed in the organizational culture. In some cases, they can even bring in technical expertise which internal hires may not be capable of doing, or whose steep learning curve prevents the entire organization from adapting to new working conditions.
It should also be noted that external hires sometimes become an issue especially when they are put in leadership positions where they impose their previous culture, and especially so when they name-drop executives to demand obedience. This erodes teamwork and forces people to protect their own work and start looking for alternatives either within the organization or somewhere else. While there are many qualified candidates, culture fit plays a significant role in retaining an internal hire, more so for an external hire.
Hiring internally also encourages professional growth within the organization. Hiring from within boosts employee morale and is tangible proof the organization rewards good performance. This only works when the organization has a clear performance evaluation for employees, and an objective way of ascertaining employee readiness for their next role. And even if you have that in place, the organization needs to review professional development plans especially when employees unnecessarily compete for promotion, or when there is a large pool of high potential candidates but no one wants to be promoted.
But hiring externally can also provide the stimulus to encourage innovation and for members of your team to realize the need to upgrade their technical skills. This is especially helpful when you want your team to discover new ways of seeing things, or when there is a change in direction or mindset coming from either the management or the exigency of adapting to new work environments. But there is a need to review policies when there are no internal candidates who would like to take available positions.
Hiring internally will also be faster and will cost less primarily because Human Resources can validate and check the candidate’s readiness for the role because the key people they need to talk to are within reach. For some organizations, internal hires also mean lower salary offerings as compared to an external candidate who would negotiate for more before joining the organization. Of course, you also have to consider the costs involved in filling in the vacant position of the internal hire.
Looking externally can mean costs in published advertisements and time spent in interviewing candidates which translates to money and time which could have been spent on something else. This would also mean longer periods of time because of the need to source candidates and filtering which fits the organization’s requirements. This involves time in reviewing resumes up to the time the candidate is given the job offer.
The decision to hire from outside depends also on the performance evaluation within the organization. If the roles and required skills are clearly indicated in the employee’s scorecard and they are evaluated transparently and fairly, it becomes easier to develop current employees for future vacancies. You already have a history of an internal hire’s performance and how they work making it easier to assimilate into their new role.
On the other hand, when it is not clear how people are appraised and evaluated, an external hire might be a better alternative since there is no way to objectively assess internally who is ready for the role. This works best when the role requires technical expertise which the organization lacks. This also entails close supervision on the new hire and the need to ease them into the organization and monitor their performance in the first three to six months.
In the long run, recruiters need to understand what is required of the role beyond the job description. A clear understanding of what is expected from a candidate helps recruiters filter candidates from internal and external sources to find the best person for the position. And while it is good practice to promote from within, it might be more beneficial to get someone with a new perspective.