Finding the right person for a job is a huge undertaking. You spend time crafting the perfect job ad, pay a ton of money to have it posted on all of the best boards, spend countless hours interviewing potential candidates and…nothing.
Could it be possible that the perfect person for your job opening does exist? Could it be they might be closer than you think? The answer is yes. They might already be someone in your company! So, what are the benefits of hiring from within and how do you go about this task?
- Cost savings: One of the biggest reasons to promote from within is that it can save you considerable money. An influential 2012 study published in the Wall Street Journal suggested that external hires generally have an 18-percent higher starting salary than internal hires. Further, internal hires are able to ramp up quickly, meaning that they become revenue generators more quickly than their external peers.
- Higher performers: As we hinted at above, internal hires ramp up more quickly than outside hires and thus generally have higher scores on performance evaluations right out the gate. Further, having an under-performer in the company can also pull down the performance of the whole unit – and even impact the bottom line of your broader company, depending on the position. The Journal study suggests that things tend to equalize at around the two-year mark, but you must consider whether that is going to be worth the wait.
- More sticking power: At two years follow up, more internal hires are still on the job, versus their peers from outside the company. In fact, the data suggests that external hires are more than 60 percent more likely to be fired than your internal hires. This is due, in part, to the fact that when you promoted from within, you already knew that they were a good cultural fit and they had already determined that this was a company worth staying in.
- Higher morale: When folks see other workers being promoted from within, it helps boost morale because they see the company investing in their workforce and rewarding good performance. This, in turn, can also boost retention in your company because people recognize that they can try on new hats should their career needs or wants change or simply advance up the career ladder.
- Better for future hires: While we are extolling the virtues of promoting from within, sometimes there just isn’t a person in your company who is right for the job. However, as you begin the search for an external applicant, you can make your business appear more attractive by touting that you like to promote from within and that career pathways and moving up the ranks are important parts of your corporate strategy.
There aren’t really many cons to hiring from within, but one that does bear thinking about is that moving an employee from one spot to another doesn’t increase your net number of workers, meaning that the position that they vacate will likely need to be filled. If it’s an entry level job, this one is generally easy to fill, but if you’re moving someone up that boasts particular skills or knowledge, finding their replacement can prove pretty tricky. A second con is that generally when you hire from outside of your company, your standards for education, experience, and skills are higher than what you would require for an in-house hire, meaning that if you consistently hire from outside, you’ll upskill your whole workforce.
How to hire from within:
Now that we’ve covered why you should consider hiring from within, let’s go ahead and talk about how you can make it happen! The first order of business is to internally post the position. Research suggests that hires made through postings to an internal job board outperformed their peers passed along based on manager recommendations in measures of both competency and contributions and were less likely to be labeled as under performers. If you have a company intranet landing page, consider posting the job opening on a designated job board section, or make it a banner or side bar that will grab the eye of potential candidates. If this isn’t an option, consider including it in a company bulletin or newsletter, a weekly email, or even through a poster in a break room. The modality you use to get the word out should be based on how you will get the most eyes on the posting and provide an equal opportunity for any employee to interview (so if you have multiple locations, you’d have to post in each of your offices so that folks from each division have an equal shot at applying for the job).
Beyond the job posting, you’ll also want to conduct a formal interview with the candidate as you would with an external hire and should have them meet any other relevant folks in the company who can evaluate them for their fit for the position. As to whether you should consider speaking with their manager, that’s where things get decidedly stickier. If it was an external hire, you wouldn’t request a formal sit down with their boss and would instead by content with having them fill out a short online survey or chat briefly with an HR rep. Following this plan helps to level the playing field – especially if you are considering both internal and external hires – and lets you draw your own conclusions about a candidate’s suitability for the job.
While hiring from within your own ranks isn’t a viable option for every company, it can be an important talent pipeline for many others and should be explored as a potential avenue should the need arise. At Abel HR, we wont only help you with the hiring process, but we will be the ones to find the potential hires for you to interview. Call us at 800-400-1968 to find out how we can help with your hiring process.