Now's the time to hire from within

Recruiters working in a tight labor market might benefit from promoting internally.
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· 3 min read

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To many recruiters looking to fill a more senior-level position within an organization, there exists a vision of a perfect candidate out there in the wild, capable of performing professional magic with their big managerial brain and PowerPoint skills. All you need to do is bag this quarry with a tranq dart and prop them up at their new desk before the Zoom meeting announcing the big hire.

But there’s a problem with that strategy: Today’s labor market is rocked by mass resignations: In September, 4.4 million workers quit their jobs in the US, according to the Bureau of Labor Statistics, and the NYTimes reports that there were approximately 75 unemployed workers for every 100 open jobs in September. For recruiters, this tight labor market underscores the benefits of promoting from within. 

The cognitive dissonance of recruiting: There’s “a weird psychological thing that happens at organizations,” explained Tim Sackett, an HR tech analyst and self-described “blogger-type person.” It goes something like this, according to Sackett: Managers are less inclined to promote people they already work with, because the employee’s professional weaknesses are already known. When it comes to an outside candidate, recruiters and managers may not see the complete picture, because they’re only being shown the candidate’s strengths.

“When you’re interviewing somebody, all you really hear about and understand is their strengths,” Sackett told HR Brew. Sometimes, recruiters can lead themselves to believe that “there’s somebody out there that's going to be brilliant [and] better than what we have internally,” he noted.

Some research suggests companies would be better off promoting from within. A study published last October by professors from Cornell and the University of Minnesota found that “internal hires had greater objectively measured performance than their external hire counterparts,” when examining the performance of 109,063 salespeople at a national retailer over a seven-year period.

We should mention retention: Hiring internally also helps with retention, according to a LinkedIn study from 2019 that examined 32 million user profiles. The study found that someone who’s promoted internally at a company “has a 70% chance of still being there, while someone who moved laterally has a 62% chance” after three years.

The internal hiring process can foster an atmosphere of reciprocal appreciation, Sackett argues, especially if managers known to develop talent are recognized. When companies “reward and recognize those managers that are developing talent,” it tends to permeate an organization’s broader culture, Sackett said. Workers tend to agree, as a Joblist survey from March that queried 1,000 working professionals about their preferences for leadership found that 56% of employees thought internal promotion was a benefit to organizational morale.

Bottom line: The perfect candidate doesn’t likely exist, and some of the best options may have been plugging away right under your nose for years.—SB

Do you work in HR or have information about your HR department we should know? Contact Sam Blum via the encrypted messaging apps Signal and Telegram (@SamBlum_Brew) or simply email [email protected].

HR is challenging. HR news doesn’t have to be.

HR Brew keeps you effective in the fast-changing business environment.