Amidst the Great Resignation, it seems like the hunt for top talent never truly ends. And while many businesses think that the best approach is to post on job boards, some have been finding talent in a place that may have been overlooked in the past – within the company itself.
But what are the benefits of hiring internally?
1) It helps retain employees
From time to time, busy businesses will quickly contact recruiters to fill an open position, often unconsciously discounting internal employees who were eager for promotion and advancement in the process.
By considering existing employees who have been performing exceptionally well, businesses are able to help retain those who may have been feeling stagnant in their current roles.
It is no secret that career advancement opportunities have become increasingly important to today’s employees. Rather than staying in one position for an indefinite period of time, many employees are desperate to climb the corporate ladder.
The threat of a new hire taking the much-coveted position that a current employee has been training and preparing for can sometimes be the push they needed to find employment elsewhere.
A survey found that 35 per cent of respondents had quit or contemplated doing so after an outside hire was brought in, most citing that they thought their skills were being overlooked as one of the reasons.
When businesses promote from within, it is more likely that employees will see the opportunity for growth and feel less inclined to move around in their careers.
2) It saves time and money
The truth is; that the external hiring process can be expensive, especially in this current environment where businesses are offering inflated salaries that are almost double what was on offer pre-pandemic.
In fact, it is reported that it can often cost a business on average six to nine months’ salary every time they replace a salaried employee.
By offering a promotion, businesses are able to instead cut down on costs associated with using external recruiters and advertising. The mounting costs don’t stop once a candidate is offered a position either. Generally, companies need to splash extra cash and time on onboarding and training initiatives in order to get the new hire up to speed.
In comparison, an existing employee already possesses an intimate knowledge of their company and its culture, thus being able to adapt to the role much easier. Research has uncovered that some external hires can take several years to reach the same productivity levels compared to internal hires with the same job.
3) It builds team loyalty and morale
And it is not just the promoted employee that benefits from internal hiring either, so does your company’s Employee Value Proposition (EVP).
Promotions recognise the hard work of employees and serve as a reward for those who do well. This subsequently inspires other employees to work hard to achieve similar goals, ultimately increasing the general productivity, loyalty, and morale of a company.
A survey discovered that employees were 15 per cent more likely to report lofty levels of productivity when their managers were promoted internally. Moreover, employees with internally promoted managers were also less likely to feel jealous of their co-workers or report high levels of stress.
At JobAdder, our artificial intelligence (AI) matching technology helps companies analyse their existing talent pool and identify promising employees that may be suitable for advertised positions, potentially avoiding a lengthy hiring process and giving them more time to focus on their employer branding.
In fact, from an employer branding and talent search perspective, a company that promotes talent from within is also an attractive feat for prospective hires. Communicating externally about the ongoing career growth opportunities at your company therefore should not be overlooked.
It is important to note that while hiring internally might be right for some businesses, it is not a one-size-fits-all solution. In some cases, businesses will need an extra set of hands on a project or a newly won client or simply might not have current employees that fit the level of experience and seniority needed.
Overall, while businesses should do their own reflection and research to determine the best options for their individual needs and requirements, hiring internally can be a sound solution in a number of recruitment cases.
Michael Osmond has been with JobAdder for 2.5 years as the Head of People. Michael is passionate about creating workplace experiences that help people, teams and organisations thrive. He loves working closely with founders and leadership teams to design and execute progressive performance cultures that drive organisational success and an amazing employee experience. Michael has 11 years’ experience in People Tea
ms having spent 6 years in Financial Services and then more recently 3 years with Football Federation Australia – the governing body for Football in Australia.
Michael is a generalist but has a background of big change projects in the organisations he has worked in that align with the overall business strategy. These have been in the areas of people performance, mental health well-being, DE&I, employee engagement, organisational design/change, compensations & benefits and L&D.