The Pros & Cons of Internal Promotions

Store incharge training young worker. Supermarket manager giving training to a trainee.

When you need to fill a position within your organization, do you always look for an external hire?

If yes, now might be the time to consider looking a little closer to home. There are many advantages to hiring internal employees, yet many businesses still shy away from this recruitment strategy.

Not sure whether you should invest in external recruitment or opt for internal promotion?

Keep reading to discover the pros and cons of internal promotions. Plus, how you can ensure you find the right internal candidate for the job.

What is internal recruitment?

As the name suggests, internal recruitment is the process of promoting employees internally when you have a position to fill rather than advertising for the role externally.

Internal recruitment is a growing trend in 2022 as businesses seek ways to cut the cost of recruitment and make the most of the talent they have – a bit like the “don’t move, improve” motto that trended in the property sector during the pandemic.

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What are the benefits of internal promotion?

1. It can be a lot quicker

If you are looking to fill a position as quickly as possible, there is no denying that internal promotion is the way to go.

With no need to write a job posting, sift through resumes, interview candidates and conduct background checks, the entire hiring process is simpler and faster.

Furthermore, you can save even more time as you already know everything you need to about your internal candidates. You know what their strengths and weaknesses are, what their career goals are, and how reliable they are.

All of this combined means you can save a significant amount of time when you choose to promote internally rather than recruit externally.

2. It can be more cost-effective

Every business wants to find ways to save money, and internal promotion can save you a significant amount.

Whether you carry out external recruitment in-house or you typically use a recruitment agency, it is a lot cheaper to promote internally.

Furthermore, as well as no hefty advertising and agency fees, you don’t have to contend with any counter-offers or negotiations over salaries. Usually, employees welcome internal promotions with open arms.

Also, use a process called internal mobility to redeploy workflows and minimize any disruption to your business.

3. It is safer

When you recruit externally, there is always the worry that you have not found the right person for the job. An applicant can do and say all the right things, but you never really know what they will be like, how they will perform and whether they will fit in until they start.

However, internal employees are a much less risky option as you already know everything about them. Plus, hopefully, the employee is already fully integrated into your company culture.

4. It can boost your brand reputation

If you always overlook your existing employees in favor of external ones, this shows that you do not prioritize career development within your organization. This is not good for morale in your workplace and showcases your brand in a very unattractive light. Therefore, when the time comes to find an external hire, you may experience a lack of suitable applicants.

However, if you show that you recruit fairly and offer up positions for both internal and external candidates, you will find your brand reputation improves. You can then attract a higher calibre of candidates.

5. It can improve employee engagement

Post-pandemic, employee engagement is more important than ever, yet it is one of the hardest things to achieve.

However, by ensuring that you promote internally, you can make your existing staff feel valued and supported, which, in turn, will boost employee engagement.

If you neglect to give your internal employees the opportunity to grow, they are highly likely to look elsewhere for career fulfilment which means more recruiting costs your business.

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When is it best to promote internally?

  • You have a limited recruitment/training budget.
  • You are recruiting for a position that requires in-depth company knowledge.
  • You have several employees eager and ready to take the next step.
  • The skills needed are already available within your existing talent pool.
  • You are on a tight timeframe.

What are the drawbacks of internal promotion?

1. Potential for resentment

One of the main risks of internal promotion is the creation of resentment amongst employees and managers.

If more than one person goes for the promotion, the employees who do not get it are likely to feel bitter or angry. Plus, managers are never happy about losing valuable staff members even if they know that they are moving on to better things.

2. Gaps in the workforce

Although it may seem easier to fill a role internally, you need to remember that when you promote someone or transfer someone from one department to another, you still need to fill that vacant position one way or another.

This may involve a series of transfers, promotions, and moves that can cause disruption to your business and may even result in a need to recruit externally.

3. Limited talent pool

One of the main drawbacks to promoting internally is that you are limited in your choice of applicants. This is not always a bad thing, but if your current employees are lacking in specific skills needed for a newly created role, you may struggle to find the right internal candidate for the job.

Furthermore, internal applicants will not be able to bring a fresh perspective to the business, which is often needed to inspire innovation and spark creativity.

4. Risk of complacency

If you become too reliant on promoting internally, you may notice that your employees become complacent. Without the fear of competition, they may start to lack drive and not feel like they have to make an effort to impress or challenge themselves.

This, in turn, can lead to a reduction in productivity and an inflexible company culture that is unable to adapt or evolve.

Shot of two builders shaking hands at a construction site

When is it best to hire externally?

  • You are looking to grow your business.
  • You need fresh perspectives – this brings about new ideas and could make a huge difference to making impactful changes!
  • You want to hire a more diverse workforce.
  • You need a change in direction.
  • You need to acquire specific skills that you do not have available in your existing talent pool.
  • You have a more flexible budget and timeframe.

Which hiring process is right for you?

If you are still not sure whether you should hire externally or promote internally, why not combine both recruitment practices for optimum results?

While there are clearly some cases where external recruitment is the preferable choice, there is no reason why you shouldn’t turn to your existing employees for both vacant and new roles within your organization.

If you need help finding new candidates externally or making the most out of the employees you already have, then here at Oleeo, we can help you. Our top-rated Talent Acquisition Recruitment Program is exactly what you need to gain that competitive edge over your rivals and attract the top talent within your industry. Get in touch with us today to find out more about how we can help you, no matter your recruitment needs.

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