Dear Looking Inside and Out:
This is a great question, yet one that too few hiring managers and HR professionals take the time to ask. There are of course the obvious pros to internal recruiting:
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Communicates that career opportunities exist within the organization
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Usually less costly and faster than an external search
And the obvious pros to hiring externally:
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A chance to introduce new ideas and fresh perspectives into the organization
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An opportunity to enhance diversity
Looking deeper, we find research that shows hiring from within also contributes to shareholder value. Another overlooked advantage is the enhanced ability to assess internal candidates, since more information is readily available from internal sources (i.e., performance management system, people who have worked with the candidate). These people also are already familiar with the company culture and “ways of getting things done” and “staying out of trouble.”
The often-overlooked advantage of hiring externally includes finding a qualified person that is fully trained, experienced and ready to contribute immediately upon being hired.
Each recruiting option also has some drawbacks. Internal hiring may lead to:
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Narrow thinking and stale ideas (inbreeding)
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Possible discontent of rejected applicants
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Diversity goals becoming more difficult to achieve
Some of the primary disadvantages of external recruiting:
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Takes longer and costs more
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Too often, little reliable information exists about candidate’s ability to fit with rest of organization
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Could destroy incentive of present employees to strive for promotion
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Takes longer for an outsider to become familiar with current systems
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Current organization members may fight new ideas
SOURCE: Richard Greenberg, president, The BreakThru Alliance, Marina del Rey, California, March 30, 2010.
LEARN MORE: An organization that tries to fill available positions from within should define the scope of the internal hiring policy and hold managers responsible for identifying staffing needs.
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.