Internal Hiring Can be Bad For Business

By Christie Summervill

Internal Hiring Can be Bad For Business

Hiring from within has long been esteemed as a tenant of an employee centric company. I mean, isn’t it only fair that if a position opens, the company look internally and give a current employee the first opportunity?

Many companies believe their “We hire from within” motto is evidence of what a good company they are.

Not so fast, Chief of Workplace Excellence.

If an employee is a part of the homegrown crew and has learned everything they know internally, their ability to provide innovative solutions may be limited. So while this may work if they are moving from a Teller I to a Teller II, this practice does not apply if the new position requires a completely different set of internal competencies to be successful. Would Dennis Rodman have made a good coach? (rhetorical question) Perhaps your best Consumer Loan Officer wouldn’t make the best Branch Manager. Your best Branch Manager may not be the most effective Head of Retail. These situations require individual consideration, based on the incumbent’s natural skill set, and that which is required by the new position.

The more critical the position is, the more important it is to thoroughly research what the market has to offer.

The most effective companies take the time to identify and recruit the best talent, and place them in positions that align with their natural competencies. Find other ways to keep employees engaged in positions that already fit their skill set. If they have to move up in order to feel they are succeeding, it may be that you have other issues to address.

Finally, if they are a good candidate for the position, their starting salary should be commensurate to what the market would pay someone new to the position. Paying lower than market just because they were hired from within is clear demonstration of the opposite of employee centric.

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