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5 Reasons Why Promoting From Within Is Better Than Outside Hiring

May 23, 2022

Recruiting for an open position can be complicated and sometimes very hectic. It takes a lot of dedication and effort to attract, vet, interview, and secure the candidate to assume the vacancy.

These efforts don’t always guarantee you’ll find the ideal candidate for the position, especially when hiring from outside your company. In a worst case scenario, you may need to start the process all over again to find the top talent for the job. This consumes a lot of your resources and time.

Promoting from your company internally gives you the opportunity to expand on current roles or create new assignments for a candidate you already know. It may help you overcome many pitfalls of traditional external hiring, though it also comes with challenges. For example, if two of your best, most highly skilled, and dedicated team members submit their applications for the same position, that could cause a lot of stress. This is just one example of why you need to strictly follow an established internal promotion policy while maintaining transparency throughout the organization.

If you have been struggling with traditional external hiring, now may be the best time to build an internal promotion process. This resource explains how internal recruiting works and highlights its benefits, helping you decide if this practice suits your organization.

What is Internal Promotion?

Internal promotion refers to the process of recruiting a candidate from within your existing organizational structure to fill a vacant position. The most common types of internal promotion include offering temporary staff to full-time positions, moving team members to different departments, assigning junior team members more responsibilities, and employee referrals. Setting up a system for promoting internal candidates can save your time, resources, and the hectic processes of campaigning and shortlisting external applicants.

Promoting existing employees can help prevent making a bad hire

How Does Internal Promotion Work?

To promote internally, you need to be careful to avoid compromising the morale, organizational culture, and the general productivity of your team. You should follow an established process for internal sourcing and do a thorough search for the best or most promising talent.

A one-size-fits-all solution won’t work when it comes to internal promotion. But we can provide you with some best practices:

  • Decide who will make job postings and promoting decisions
  • Outline a clear policy of how the posting and promoting should be done
  • Utilize a flexible employee management software to monitor internal and external candidates throughout the promoting process
  • Advertise the open positions to all employees to avoid potential conflicts. The position can be posted through internal newsletters, email, communication with managers, or internal job boards.
  • Thoroughly detail the job description and qualifications. Even if you have an internal candidate who you love, you need to do your due diligence to ensure they’re the best person for the responsibilities. You should detail job qualifications and abide by them to get the best applications.
  • Subject all internal applicants to the same screening standards as external candidates.
  • Promote qualified employees fairly. Ensure transparency throughout the process
  • Give feedback to the candidates who didn’t get the position. Advise them on the necessary skills required to qualify for the position in the future. Avoid sending a generic rejection letter at all costs.

Understanding how internal promotion works will help you to source the best internal candidates to fill your vacant positions and create a streamlined approach that can be used for future promotions.

Benefits of Internal Promotion

1. Less Expensive

It is by far less expensive to promote employees from within the organization than to hire externally. It saves on the risk of a bad hire, costs of advertising, paying for the posts on job boards, resume databases and background checks to source the most qualified employees.

Although some companies don’t have internally run job boards, the up-front costs of preparing and advertising the open positions are significantly lower in internal hiring than in external sourcing. Promoting internal candidates also saves you the cost of some basic training and prepping because the candidates already know your company and culture.

2. Boosts Company Engagement and Loyalty

Promoting internally boosts employees’ morale and engagement. Your employees want to grow and progress in their career paths. As they continue working for your organization, they may start looking for ways to move up the job ladder to get better payment, increased status, and expand their current responsibilities and skills. Promoting from within is one of the best ways to give employees such opportunities.

3. Reduces Hire Time

Undoubtedly, the external recruitment process is time-consuming. It requires hours of advertising, sorting through resumes, and background checks. Once you find promising candidates, you have to interview, evaluate and extend an offer an opportunity to work for your organization.

In contrast, internal candidates can quickly and easily be found in your office. You will spend much less time completing the interview process for a new position because you can rely on their manager’s feedback. If you are familiar with the employee’s competency and culture fit, you can drastically reduce the time it takes to complete the interview process.

4. Reduces the Risk of Bad Hire

External candidates come with a certain level of risk. Even if they have great references and experience, there is still a possibility they may not stick around, measure up, or fit your organization’s culture.

According to a Career Builder Survey, bad hiring is expensive and contributes to high turnover rates. Per candidate, it can cost small businesses an average amount of up to $11,000 and $24,000 for large businesses.

5. Internal Candidates Already Know the Company’s Culture

Internal candidates already know the mission and vision of your organization. They likely have thought about whether or not they plan to stay with your company for the long term. If they apply for the new position, it means they are already in love with the company’s culture and would like to promote it further. Otherwise, they would apply for positions elsewhere.

Promoting is an integral part of every HR professional’s job, and doing it right to obtain the best candidates requires a great deal of effort. Some external hiring will undoubtedly be necessary, but taking time to build an internal hiring process can pay off greatly in the long run.

Are you planning to conduct internal promotion but are overwhelmed by the idea? Goco has your back. Our performance management feature can help you set your team members on a path for internal promotion. Contact us today to schedule a tour.

See how GoCo can simplify your HR