Is Hiring Internally the Best Move?
Finding the right talent has become quite a challenge for HR departments. What is the best way to hire, internally or externally? While both come with their advantages and disadvantages, HR professionals must carefully examine the hiring situation and objective to make this decision. Whether internal or external hiring, make sure that the strategy aligns with the company’s goals to make the most out of it. Let’s look at the pros and cons of both to determine which one is the most effective approach for your company.
Advantages of Internal Hiring:
Reduced recruitment expenses: When you choose to hire internally, it allows for more space to allocate other business funds that would have otherwise gone to external recruiting. Reduced expenses such as hiring ads, sourcing, and employing. Although there are exceptions, usually internal applicants don’t require additional expenses for relocation.
Streamlined hiring process: The process is much simpler and faster than when you headhunt and hire externally. Internal interviews are usually shorter and less time-consuming than interviews with external applicants.
Shorter adjustments: Hiring internally can be helpful for companies that prefer hiring someone who is already familiar with the company’s policies and culture. When this happens, the internal applicant will usually have a shorter adjustment period in the new position. Internal recruits are likely to achieve productivity objectives more quickly, which is also beneficial to the organization.
The track record is evident: It offers the benefit of already knowing the applicant’s talents and performance history. This makes it less risky for HR because they already know the person’s accomplishments and level of productivity.
Professional development opportunities: An internal hire decision can also be a reward for an employee’s performance in the organization. Providing opportunities for professional advancement can boost employee satisfaction and retention. Having an internal recruitment policy can motivate employees to stay and strive for advancement opportunities.
Disadvantages of Internal Hiring:
Another vacant position is created: When you promote a current employee, a vacancy in their previous role is created, which leaves HR seeking someone to fill the role, whether that means relocating someone or hiring someone new.
Decreased employee morale: Internal hiring can stimulate tension or problems between employees when there are a few candidates up for one spot. This could lead to competitiveness or envy, which can lead to problems in the workplace.
Advantages of External Hiring:
Employee diversity: Hiring external candidates gives a fresh new perspective to a company, helping to improve the corporate culture. This is especially important if the organization requires a minor shift in direction.
Add more skills to the company’s profile: When you hire externally, it adds a new set of qualifications and skill sets. Their qualifications and skills may be different from existing employees, so it can help diversify the company’s profile and vision.
Workload management for employees: Hiring an external applicant helps employees manage their workload. There will not be additional tasks for existing employees since the new hire will be able to fulfill specific duties in the team.
A more diverse pool of talent: Hiring externally expands a company’s talent pool. Companies receive more external applications than internal applicants, which helps them identify the ideal applicant without losing the credentials they want.
Disadvantages of External Hiring:
Increased hiring expenses: External recruiting takes more time, effort, and financial investment than internal hiring. Interviews usually require extra time and effort. For example, external recruiting requires online advertisements, job posts, other out-of-pocket expenses, and determining an adequate hiring budget.
Longer training durations: Hiring externally comes with a longer training period. It requires orientation, training, and follow-ups to ensure that they are managed properly and accustomed with their role and duties. When a candidate is not accustomed to the company culture, they will need some time to feel comfortable in their new role.
Hiring in general requires some effort. Whether you are planning to hire internally or externally, the HR department must assess and evaluate the situation to make a decision for the company or role. Some may find it beneficial to hire internally, while others find it more beneficial to hire externally. There is no right answer, as it all comes down to your company’s dynamic and current objectives.
