Internal Promotion vs. External Hiring Hiring talented and qualified applicants is a key to the future success of any company. There is a current debate among employers as to whether it is better to give preference to inner applicants before looking on the outside to fill an opening. Older and more established companies typically give preference to inner applicants while fast growing and more innovative companies tend to focus more on exterior recruits. Although most companies end up using a combined strategy, the ratio of internal to external recruits is always a controversial issue. However, before promoting internally, employers must understand the pros and cons that both hiring strategies offer.

Internal Promotion

Internal Promotion strategy is recognized by promoting workers from within an organization to fill future vacancies. Many companies use such devices as intranet posts, job posting boards, email flashes, and brochures to recommend current workers for tasks they may intend to complete. This hiring may be in the form of forming and shuffling short-term groups to fill certain positions or may be long-term changes. Internal employment may be mainly horizontally, or it may be for promotions in which the promoted worker's former post may not be filled (Bayo-Moriones, & Ortin-Angel, 2006).

External Recruitment

An External Hiring strategy is one which an HR division will methodically investigate the worker pool outside its workers to fill vacancies. Many companies will use job search websites, adverts in newspapers, referrals from current workers and job fairs to fill vacancies. Some companies will utilize an employment agency to fill vacancies that can be filled quickly, with less company-specific skill required to complete the preferred task. Other companies will use recruiters or consultants to seek, screen, and provide workers for a fee.

Pros and Cons of both Methods

When promoting from within or filling new roles with inner applicants, there is a positive impact...

Workers think that the company rewards effort by providing a chance to take on new obligations or shift to a division in which a worker has an interest. Internal hiring also can motivate employees to perform at optimum efficiency (Murphy & Zabojnik, 2004). When the compensation is a chance to shift into a better position, the employees will do their best to sustain an advanced level of efficiency. This allows a company to build powerful employees loyalty within the company by making employees feel valued and giving them development opportunities through promotions (Bidwell & Keller, 2014).
Internal Promotion has some natural benefits. Employers do not have to "reinvent the wheel" with an inner hire. He will likely understand the organizational culture, business model, and company procedures before taking new roles. Consequently, he will incorporate into the new position quicker than a new worker who must be coached on the many company formalities from benefits to fire exits before initiating job-specific coaching. These employees take more time to find, more time, and money to coach and may not completely incorporate into a company culture even after coaching. Often, self-development opportunities offer a powerful inspiration in a company that utilizes a powerful Internal Promotion technique (Bayo-Moriones, & Ortin-Angel, 2006).

The cost of internal promotion is low unlike when sourcing for employees outside the company. When advertising a position to the present employees, the HR division only needs to publish the job on a bulletin board and share the information on the company intranet. Recruiting external applicants needs the expense of marketing in exterior media such as magazines, websites, and newspapers. There is also the cost of time needed to screen candidates and conduct shortlisting and interviews.

Internal sourcing can provide motivation for workers to increase productivity, but it also can foster a competitive atmosphere leading to unproductivity. Workers may be…