Promoting From Within vs Hiring From Outside - When is Each One Better?

As a company grows, expands, and experiences turnover, it becomes necessary to create new positions or fill already-existing ones. One dilemma many hiring managers face, however, is whether to promote someone from within the company or hire an external applicant from the outside.

Promoting From Within
At first glance, it seems to make sense to promote someone from within to fill an open position. There are a number of reasons for this, including:

• Internal candidates have already proven themselves as valuable workers and assets to the organization, or they wouldn't be considered for the position.
• Internal candidates know the company. From the culture of the company to the products offered to other co-workers, internal candidates are already acclimated to the company and its procedures and other workers. Sometimes, hiring an internal candidate is ideal in specific product-oriented industries.
• Hiring internal candidates looks good for the company. Companies who promote from within are viewed as caring for the needs of their employees and putting their opportunities for advancement ahead of someone from the outside.
• Hiring internal candidates saves time and money. When hiring from within, relocation costs, advertising for the new position, and other expenses are avoided.
• Hiring From the Outside

While promoting from within the company seems to be the favored approach, many employers opt to hire external candidates. The reasons for this are varied. Some of them are:


• The internal candidates just don't measure up. If the company envisions a certain type of background or a phenomenal talent that can't be found from within, they will turn to outside applicants to fill the role.


• The company needs a change. In some cases, a company will be looking to drastically change the way they do business. When this is the case, they are more apt to hire a fresh outlook on business from an external applicant.


• External applicants eliminate antagonism. When there are several employees vying for the same position, there is more than likely to be resentment, hurt feelings, and anger when the incumbent is announced. When an external applicant is hired, employees are less likely to be bitter or feel they were treated unfairly.

When Is Each One Better?
Hiring from the outside or promoting from within is a difficult decision, and no one is better than the other. Employers must gauge the circumstances, and then decide from there what would be best for the company.

Many times, if companies are hiring for a position that requires an extensive amount of knowledge about a particular product, such as software or pharmaceuticals, they prefer to hire from within. This way, they don't have to take the time to train the person on the products and can be confident knowing they've hired someone who is already familiar with the product and the company.

On the other hand, if a company is undergoing a complete change in management or the company needs to experience a turnaround, many times they will opt to hire someone from the outside. This is because executives from other companies can bring fresh ideas and new processes into an organization, breathing new life into it. There are many examples of companies who were struggling, and then after an overhaul of management and top executives, experienced a turnaround for the better.

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Categories: Business Strategy,

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