It’s time to make some tough hiring decisions. Your company has an opening, your employees know about it, and some of them are already sharpening their elbows and jockeying for position. Is the right worker already within your ranks? Or is she somewhere far beyond your company’s walls, searching for a business just like yours to call home? Should you make your employee selection from within, or should you expand your search?
There’s no simple answer, and every single one of the hiring decisions you make will be different. But that doesn’t mean your best course of action is to blindfold yourself and throw a dart at a wall of corporate headshots. Instead, study your specific situation to figure out which path to take.
When to Promote From Within
When the demand for your company’s products and services is growing but you’re still working with a limited budget, promoting a current employee to fill an opening makes sense. After all, when you don’t honestly have the time or money to spend on recruiting outside talent, things can get a little tricky.
Consider this: a study from the Wall Street Journal found that external hires earned 18% more, on average, than those who were internally promoted to an identical position. The same study also found that outside hires were 61% more likely to be fired from their new positions and 21% more likely to jump ship of their own accord. These numbers are working against you, and if you don’t have a monetary buffer to deal with the possible fallout of your outside hiring decisions, promoting from within could be the better, and safer, option.
It’s also the smarter choice if your current employees have experience in the tasks they’d assume with the new title. When the person you promote already knows the ropes, you’ll save time on training. Promoting from within also give you the opportunity to boost the morale of your workforce by showing your employees that hard work pays off and that you’re the kind of employer who pays attention to performance.
When to Broaden Your Search
Of course your business is full of bright, hard-working innovators – you only hire the best, after all. But just because someone is a great fit for one position doesn’t mean they’ll excel in a new role. In fact, promoting an employee from within sometimes hurts more than it helps. For example, when you promote your best salesman to a management position, you also take him off of the sales floor. If no one else can perform at his level, your sales and your profits could take a big dip. To keep your best employees in the positions where they can benefit your company the most, sometimes outside hiring is the best choice.
Hiring talent from outside your company is also a great way to spark a needed change. Perhaps you’re looking to take your company in a new direction, or maybe it’s time to take care of an important deficiency. For example, a marketing team that has decades of experience in traditional advertising might require some inside help on social media outreach. If the position you’re hiring for requires a fresh perspective, injecting some new blood into the workforce could be one of the best hiring decisions you’ll ever make.
Above all, just remember the golden rule of hiring: when it’s time to choose the right person to fill a position, base your employee selection decisions on facts and needs, not emotions. Sure, it can be tempting to elevate an in-house employee into a more important position, but that’s not always the best choice. To find the best answer for your current needs, acknowledge that you can’t make everyone happy all of the time. Then use all of the information at your disposal to make the decision that’s right for your company.