Advantages of internal hiring for organizational vacancies

¶ … hiring internally to fill vacancies within an organization.

There are a number of advantages to hiring internally to fill vacancies within an organization. First, it needs to be understood that there are two different types of internal hiring. One is vertical hiring, that is raising an internal candidate up a level within the same position. The other is lateral, where the worker is moved without promotion from one job to a similar one in a different division or department (Bidwell, 2011). The advantage will differ between these types.

The first advantage is familiarity with the organizational culture. Whereas outsiders must adjust to a new organizational culture, internal hires are already generally familiar with the overall culture. This is especially the case with vertical hires; lateral hires might notice some cultural differences between divisions. Familiarity with the culture can have a number of impacts. First, there is no culture clash, something that can be very disruptive within an organization. Second, the turnover rate is going to be lower. Culture clash issues are one of the contributing factors to the fact that outside hires are more likely to leave the position post-hiring (Bidwell, 2011).

Internal hiring is also thought to improve the morale of the organization. Vertical hiring in particular provides workers with motivation. The type of motivation depends on the type of hiring, of course. Where hiring is done on merit, the workers are motivated to perform better and to demonstrate leadership skills. Where hiring is done on seniority, the workers are merely motivated to stay in their positions -- performance is not a big factor when it is not specifically rewarded.

Internal hiring also allows the organization to hire people that it has spent time grooming, thus making a better use of the organization's resources. Where organizations invest in training and development programs, internal hiring provides an opportunity for the organization to earn a return on that investment (Arnold, 2012). If the organization does not provide opportunities for its employees to move up in response to training and development, the benefits of those training and development resources are likely to be enjoyed externally, for example at competitors who poach your unsatisfied employees. It is important that there are internal hiring opportunities because a lack of fulfillment will cause good people to move on from the organization.

Returning to the strictly functional arguments, it is also noteworthy that internal candidates are familiar with the systems and processes. Even when learning a new position, they have a rough idea of how things work, and they have people within the organization who can serve in a mentorship role. The result of this is that the organization is well-positioned with internal hires to proceed more quickly with getting that person up to speed. There is a much steeper learning curve for external hires, which is why such hires often are required to have a high level of experience in the position already, so that there are at least some transferrable skills.