The debate about whether organizations should fill newly available positions from within or bring in outside talent is complex and ongoing. There certainly is not a one-size-fits-all solution for every organization.
However, in the last few years, more and more companies have come to realize that there are plenty of good reasons to focus on internal promotions rather than bringing in external talent. Some of these reasons include cost savings, increased productivity, and employee satisfaction. Let’s explore some of these benefits below.
4 Benefits of Promoting Employees Internally
1. Increased Employee Retention
One of the most important benefits your organization can get from prioritizing internal recruiting is an increase in employee retention. According to LinkedIn’s 2022 Global Talent Trends Report employees stay 25% longer at organizations that provide them with internal promotion opportunities compared to those that don’t.
When your staff see that they are being prioritized for those newly opened positions, they feel that your organization values them as employees, and like they are a part of the overall business strategy.
In turn, employees who feel like they are valued and will have growth opportunities within your organization will be significantly more likely to stay and work towards being successful in their current roles and contribute to the organizations goals.
2. Accelerated New Hire Productivity
When you backfill or simply hire from within, you are filling that new position with someone who is already familiar with your organization’s values, culture, product, and solutions.
This familiarity with the inner workings of your organization makes for a much shorter onboarding process for this employee, while allowing them to focus on learning any new skills they will need to perform their new role and sharpening transferable skills.
Being able to focus your employees training in this way allows them to start doing the job to some capacity, and contribute to ongoing projects much faster than any external hire would be able to, given the much larger amount of basic training they would require at first.
3. Savings on Recruiting Cost
Hiring new talent externally is no cheap task. From having your HR team post the position on job boards and create ads for the position you’re trying to fill, to the revenue lost while the position sits vacant. Looking outside your organization for qualified talent is often more expensive than looking within your existing talent pool.
According to a study done by the Society for Human Resource Management (SHRM), on average, it costs $4,700 to hire a new employee from an external source. However, that cost doesn’t consider “soft costs” like the time spent by department leaders supporting the hiring process and other losses in productivity which can raise costs to more than triple that amount.
Having a streamlined internal promotion and hiring process allows your organization to bring in an employee that has already been trained and is familiar with the job functions. This not only makes for cost savings but allows the employee to see more success, faster, and lets the company see the ROI of bringing them onboard quicker.
4. Boost Chances of Hiring a Top Performer
When your organization looks to hire from within, it’s much more likely that you will see higher levels of overall satisfaction with the performance of that new employee. According to a Deloitte study, organizations that favor internal promotions are 32% more likely to be satisfied with the quality of their new hires, compared to the 61% likelihood of an external hire being let go or leaving within their first year.
Bringing a new role player into any new position always comes with a high level of uncertainty for that department and its leadership. Finding the right person to bring into the team internally can help reduce that uncertainty by a significant factor and give management reassurance that they are most likely making the right addition to the team.
This should encourage management to dedicate more time and resources into learning how to enhance that employee’s performance from the get-go, instead of focusing on whether they are a good culture fit or not.
Upskilling and Reskilling for Internal Mobility
Upskilling and Reskilling plays a crucial role in allowing your organization to establish a solid internal recruiting program and reap the benefits of internal employee promotions.
Providing employees with online training tools that will map their core competencies and generate personalized learning paths enables them to master their current roles while learning new skills that will prepare them to take on new opportunities.
Making sure upskilling and reskilling is implemented as a cross functional effort between your learning and development, HR and recruiting teams is the best way to ensure your organization maximizes the benefits of internal recruiting.
Online Learning Solutions
As talked about previously, it’s important to have a platform that allows employees to develop new skills and level up their existing competencies.
Using an upskilling and reskilling platform that offers your managers and employees a collaborative way to determine what skills employees are proficient in, and which ones they need to work on developing the most can streamline this process.
BizLibrary’s upskilling and reskilling solution makes this possible through an integrated skills rating system that managers and employees can use to benchmark their skills and re-rate their proficiency levels as they complete training modules.
This skills rating system also works within a personalized training and development plan for each employee. The training plan is mapped to an extensive content library that gives your managers the ability to assign modules on key competencies needed for employees to succeed at their new role.
Employees are also able to identify new skills they are interested in learning and include them in their learning tacks, even if some of the skills are outside the specific scope of their role and if they want to complete any personal development modules.