An organization’s hiring strategy is one of the most important parts of keeping its engine running. Hiring the right people pushes the organization forward with innovation and expertise.

But it is not all about recruiting new talent. Some of the best hires may, actually, be working for the organization already. There are pros and cons to hiring both external candidates and looking inside a company’s existing talent pool. The goal is to hire talented people whose career aspirations align with the growth and success of an organization.

Hiring Internally

Internal recruitment is an often overlooked but highly beneficial recruitment practice. Saving the talent acquisition team both time and money, at least in the short-term, are common reasons to hire from within. Furthermore, it makes it easy as the new hires are already a part of the team and know the organization culture and policies well.

Aside from the financial aspects, internal recruitment motivates and incentivizes current employees to go that extra mile for a promotion. Meanwhile, looking externally for senior positions can disincentivize top performers who feel they should be next in line. A study by LinkedIn found that 24% of employees who were looking for a new job cited being overlooked for a promotion by their current employer as their main motivation for leaving. In a time where job-hopping has become the norm, creating more opportunities for internal mobility can greatly increase employee loyalty.

Boredom kills employee engagement and ultimately makes employees twice as likely to leave a company. According to a study by Udemy, 46% cited a lack of opportunity to learn new skills as the top culprit of workplace boredom, with the second being unchallenging work. Too many employers today forget how important development and upskilling is for employee retention. This is especially true for the millennial generation. A study by Gallup found that “opportunities to learn and grow” is one of the top three factors in retaining millennials.

It is possible for a sales rep to also be a skilled writer. And so, if a content marketing position opens within the organization, who better to consider than someone who knows the value proposition of the product or service inside-out? Facilitating cross-disciplinary hiring is a great way to develop functional leaders who can both learn a new aspect of the business and share knowledge from their previous department. Internal mobility helps people learn to look at a problem from multiple perspectives and can effectively break down silos within the organization.

With internal recruitment, there’s no need for onboarding. Employees may still require training for the new position but there is a much lower learning curve than for someone who is completely new to the business. Furthermore, with candidates who have some tenure in the organization, employers would have insights from their coworkers and manager to assess if they are a good culture fit.

Some of the best situations when it makes sense to hire internally would be…..

• A small budget to hire, onboard, and train new talent
• A position which requires significant company knowledge
• When there are high potentials eager and ready to take the next step
• The skills needed are already available within the organization’s talent pool
• When there is a time crunch to fill an important position

Going outside to hire! 

Of course, hiring internally can be great in certain situations, but there are also certain cases in which an external recruitment strategy would be more effective.

It makes sense to go external to hire for a role with skills or experience not readily available within the current team in the organization. For example, there may be a team of salespeople but no one with experience to lead the team, or the organization may need to find an engineer with niche technical skills that are not available internally. Looking for talent externally will give you higher chances of filling the position with someone who already has the technical knowledge they need to start making an impact.

External recruitment methods provide access to a wider talent pool. Having options throughout the hiring process means the organization can determine the exact criteria they are looking for in a candidate, instead of working with a relatively small number of options internally.

One of the most important reasons an organization needs to keep introducing new talent is diversity. Instead of hiring people with the same profile, studies show that cognitive diversity, or differences in perspective and thought process, actually improve a team’s decision-making abilities. There are also numerous studies that show workforces that are diverse in gender, race, ethnicity, age, and educational background are more productive, innovative and generate higher revenue.

New hires bring a fresh perspective to an organization. When a change in direction is needed or the established way of doing things is not consistent with what the company needs anymore, bringing in new talent can help shift both direction and mindset. For example, Digital Transformation. In more traditional organizations, senior-level legacy employees struggle to adapt to and adopt digitization. In this situation, such employees can benefit from the entrance of new, more digitally minded hires who can help them make this transition.

Finally, when an organization is on a growth trajectory and looking to expand, hiring externally is important for growing the business. Each time, a position is filled internally, there is another position to fill or redistribute. Instead, external hires close a vacancy gap and increase team numbers, needed to handle expansion and growth.

Some of the best situations when an organization could look outside to hire would be….

• When the organization is on a rapid growth path
• To bring in fresh, new perspectives and improve diversity
• When a change in direction or mentality is needed
• To acquire new skills and expertise within the organization

The decision to go with internal vs external hiring depends on requirement and the situation. Regardless of which you choose for each open role, the goal is to bring on the person who will help move the organization’s mission and goals forward. Betting on the potential of talent, playing to win the attrition game, and creating a culture open to growth and advancement can have a material impact on retaining the best crop of employees.

In the niche consultancy space, EZDynamic is a Management Consulting firm, based in New York, that caters to the Financial Services sector and provides consulting expertise through their 5 business verticals, viz. Business Strategy, Technology, Regulatory Implementation, Change Management & Staff Augmentation.

Schedule a call to learn how we can support your organization