Internal Hiring vs External Hiring: how to know which is best
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Internal Hiring vs External Hiring: how to know which is best
I recently joined Enterprise Solutions at Hays as Head of Solutions for the CEMEA region.
During my first 8 months in the role, I’ve had some amazing conversations with organisations about their talent strategies and future priorities.
Recruitment and Talent Acquisition is an ever-evolving topic, with an enormous volume of information available. It’s hard for organisations to navigate this, identify the trends that matter, and amongst the 551,000,000 google articles on ‘How to improve hiring in 2023’, really know if there is a diamond in the rough.
With a continued focus on Diversity, Equity & Inclusion (DE&I), skills-based hiring, candidate experience, and topics like the ‘Great Resignation’, many organisations are asking the question; should we focus on internal mobility or hiring externally? That is, when it comes to internal hiring vs external hiring, which is the best way to go?
Both routes have their advantages. In this article, I explore some of the key ‘wins’ offered by each strategy.
Advantages of internal mobility
Internal mobility is an important part of any workforce strategy; moving employees laterally or vertically into new opportunities.
There are many benefits to this approach, including:
- Better business understanding: Those who have been with the business for some time should understand the processes and systems already. These employees are ingrained in your business’ culture and will have a comprehensive understanding of its values and ambitions.
- Rewarding loyalty: Rewarding high-performing employees from within your business demonstrates that you care about career progression and that there are many more rungs on the ladder for them to climb. These employees are, as a result, more loyal.
- Enhanced engagement and morale: Offering employees the opportunity to build their skills, and grow their careers not only increases loyalty but also engagement.
- Cost and time effective: Following on from the above, internally promoted employees may not require as much training or onboarding as those recruited externally. This means more time saved and money saved too. External hires could end up costing your business between 18 and 20% more for the same job.
Advantages of hiring externally
Complementing internal mobility with external hiring offers organisations access to a larger network of available talent. This is particularly important if you are looking for specific skills or new skills, and can offer:
- New perspectives and ideas: Perhaps the biggest benefit of recruiting externally is the new and varied perspectives that you are bringing into your business. Each new hire will have accrued a particular set of skills and expertise from their previous employers, and it’s by combining all of these that you can repeatedly come to the best and most efficient practices.
- A competitive advantage: Hiring team members from competitors helps to provide you with some perspective on how effective your strategy really is. It’s easy in a familiar team to become insular, believing that, as a market leader, you have nothing to learn from your rivals. You may find, however, that someone else has a smarter and more cost-effective means of doing something. And if they don’t, it’s reaffirming to know that your business processes are the most efficient and streamlined out there. Plus, you'll stimulate loyalty in your new hire by reassuring them they're working for a best-in-class organisation.
- Increased diversity: Hiring externally offers organisations an opportunity to increase the diversity of their hires to support internal DE&I initiatives.
There is no one-size-fits-all approach to the combination of internal mobility or external hiring, both offer significant benefits to help organisations attract and retain talent. In my experience, the mix of the two would provide for the most diverse and dynamic team possible.
Understanding your current challenges, processes and culture is a good starting point to design and build the approach that’s best for you.
Better still, contact me to discuss how we can help you identify and implement the right solution for your organisation!
AUTHORS
Kirsten Tolfree-Dart
Head of Solutions, CEMEA, Hays Enterprise Solutions
"With over 20 years of experience in the Talent and Recruitment industry, Kirsten works with organisations to design futureproof talent solutions, focused on process, experience and enabled by technology."