The research also revealed that external hires were 61% more likely to be fired or laid off from their role and 21% more likely than internal hires to resign voluntarily.
One of the most critical decisions a company will need to make during times of growth is whether it should promote from within or hire talent from outside.
Whilst there will sometimes be a firm case for hiring externally, there are so many benefits to promoting from within that it should be your goal to do so as often as possible.
Save your company money
Finding a new employee can be time-consuming and expensive. You spend hours on the recruitment process, and the candidate selected needs to receive training, often pulling necessary resources away from their primary function.
Productivity is also lowered while a new employee gets up to speed. This may take a couple of months depending on the role.
When you bring in someone new, they will not be familiar with your company's work culture, and they certainly won’t know any of your company’s best practices.
Often this translates into a longer training period for an external hire. While they may bring a fresh perspective, differing management styles can sometimes cause a serious culture clash which can end up damaging morale.
When you promote from within, your employee already knows the systems, culture fit, management style, and day-to-day of the business, ensuring that everything carries on as usual.
Motivated employees work harder
When there’s an opportunity to be promoted from within, employees work harder to accomplish goals.
It keeps them motivated and provides extra incentives year-round. When the sky is the limit, you work harder and deliver more.
Start promoting on merit when a position opens up rather than waiting for annual reviews.
Keep institutional knowledge
Long-term staff are the keepers of knowledge in your company.
They’ve experienced obstacles, and they’ve learned how best to problem-solve while aligning with company values.
This allows for faster, better decisions you can trust.
If a long-term employee leaves, they take with them years of valuable knowledge, which hurts the team's skills.
Boost employee retention
When employees know they are first to be considered for a more senior role, they can be more strategic in planning a career with their company over a significant period. This raises overall company growth and drives retention.