Hire from Inside the Company – 5 Valuable Reasons

I have seen a feedback loop of, in my opinion, poor hiring practices in the last 15 years. The first step: someone retires from a senior position. The company spends weeks to months finding someone from outside the company to fill that position. It then takes weeks to months to bring them up to speed. This person comes in, makes a number of procedural changes to the culture and then leaves in two to three years. And the cycle repeats. Parallel to this, the employees at the sub-ordinate levels are reviewed annually, perhaps given a bonus or raise but not promoted. The argument from the C-suite on why the first scenario plays out goes something like this: “Well, we can’t find qualified people internally, and we need to bring a fresh perspective in…”

Why are we not focusing more on professional skills development and advancement?

Here are 5 factors that merit consideration before going outside for talent:

1) Morale

The stereotypical American Dream is the rags to riches, work-hard-get-noticed, move-up, etc., type of story. This ideal is still hammered into us in TV shows and magazine articles, and hangs in the collective memory of our elders who raise us. Thus there is an unspoken desire for this path to manifest in our jobs. When it fails to materialize, morale falls – individually. When the workforce at a plant sees outsiders take slots instead of insiders, there is morale erosion.

2) Trust in the workforce

People within the company have already been vetted. Over 33 corporate espionage headlines appeared in 2014 (almost 3 per month.) Time and again someone sells, hacks, or steals a secret recipe or code. Bringing people up through the ranks builds trust and loyalty, and limits admittance for those outside the company who want access for unethical reasons.

3) Keep the culture intact – preserves institutional memory

There is a constant need for change that is undeniable in a global economy with serious trade-policy imbalances. However, a company’s culture is grown organically over years of adaptation. There are reasons why some things are done certain ways. Bringing people up from the workforce retains this culture and allows them to change what they have seen as dysfunctional through their own experience, rather than an outsider coming in and making changes because of what they see as not fitting within the normal parameters of business.

4) Speed of business

Promoting someone internally allows the company a faster time to “market” for the position to be filled, and for those responsibilities and tasks to be executed.

5) Promotes a robust workforce development platform within the company

It may seem obvious, but you cannot promote people from within the company if they do not have the skills required to carry out the position’s responsibilities. Therefore, the company should have learning opportunities, internships, apprenticeships, mentorships, didactic coursework, continuing education requirements, tuition reimbursement, Mastermind groups, a Training within Industry program, or all of the above.

Have you seen benefits from ‘promoting from within’?

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