According to a workplace study by Wharton Professor Matthew Bidwell, external hires have significantly lower performance evaluations for their first two years on the job when compared to internal workers who are promoted into similar jobs. Additionally, they have higher exit rates and are paid an average of 20% more. Are you interested in paying more for less productivity? This should be enough to consider your current employees first when a new position opens up, but if you’re still on the fence the rest of this blog will give more reasons why promoting internally is the right decision for your company.
As job hopping continues, you may be hesitant to put time and money into developing your employees. But is this costing you? Is it possible the lack of loyalty from employees is a direct result from employers not giving them opportunities to grow?
By focusing on training and building career paths for your people, you will offer clear direction. This attitude will be a significant step in building a culture that is focused on the success of its employees.
We all know that outside hires can sometimes struggle to adapt. When you bring in somebody new, they don’t know the culture or best practices. However, if you were to promote a current employee, they will come into the position with relevant experience and an understanding of the company’s goals. This will minimize loss in productivity and lessen the amount of time needed to get them set up.
By hiring external candidates to upper-level and mid-level positions you can diminish the motivation of your mid-level and junior-level talent that were looking to move up the company ladder. But when you choose to promote from within, your employees will know that the sky's the limit, so they will work hard and deliver more for your company. Above all else, promoting a current employee will show that you value their contribution to the team and that they have potential beyond their current role.
Even with all of these benefits of promoting from the inside, you will still find yourself needing to make outside hires on certain occasions because a specific skillset or fresh perspective is needed. When this happens, take the time to get to know the candidate and evaluate how well they will fit the position and how well they match up with company on all levels.
Worried your employees aren’t satisfied? Check out one of our recent blogs on how you might unknowingly being letting your employees down.