by Stephen Bruce, PhD, PHR
Monday, September 7th, 2015 - HR Daily Advisor
The latest survey by the American Management Association states that one
third of organizations prefer to hire within. What are the other two thirds
missing out on? Todayfs Advisor will explore the ups and downs of this
topic.
The relationship between a recently open position and hiring can seem simple
and obvious. When one employee leaves, hire another. An American Management
Association survey,
discussed in a recent article by BLR®, says that the majority of employers take
this stance. They wait until they need someone before they start looking. As a
result, the company is already behind before it even begins interviewing.
Sometimes, a more proactive approach is in order. Many organizations find
that a program of retaining and developing existing employees—and then hiring
from that pool—can be of great value. Employers who rely on outside hiring donft
consider an important factor: employee loyalty and morale.
While employee loyalty has no exact dollar value, it is nonetheless a vital
metric. The reactionary method of recruiting talent from the outside has the
downside of making current employees who may have been a good fit for the open
position feel overlooked, damaging their sense of loyalty.
As every manager should know, low morale can have sweeping consequences.
Performance will suffer and employees will be more likely to leave the company,
resulting in even more vacancies to fill. Employee turnover costs U.S.
businesses approximately $11 billion every year, making overall retention the
perfect tool to fix the problem. An important part of retention involves hiring
from within.
Take a Look Around Your Company; the Best Candidate Might Be Looking
Back
Hiring from within can help boost morale, and a lot more. Here are some other
advantages of hiring within:
- Youfre hiring someone you know. Letfs face it, when you
hire from the outside, you donft even know if the person will show up for work
every day and give you a good dayfs effort.
- You avoid advertising costs associated with recruiting.
Recruiting costs time and money. An email to your employees outlining the job
costs nothing and takes only a little time.
- You donft have to offer sign-on bonuses or hire high in the
range. While not every company offers sign-on bonuses, remaining
competitive while hiring often requires offering bonuses or extra high
salaries. Internal hires often consider moving up (and all of the advantages
it entails) to be a bonus in itself.
- Your hire hits the ground running. No matter how talented
or experienced they are, outside candidates have to learn the ins and outs of
the company from scratch. An internal candidate already has an understanding
of how the company works, and can be brought up to speed on the new job much
more quickly.
- You save time and money on training. When training time
is reduced, that frees up the time of the employee(s) conducting the training
as well. In this way, you are effectively doubling down on time saved, and
therefore on money saved.
- You build retention and engagement. Hiring within shows
employees that you consider them important and offers them fresh duties. Both
of these advantages directly engage the employee. An engaged employee is much
more likely to remain focused and productive at work.
Tomorrow wefll take a look at the nuts and bolts of dealing with potential
internal hiring trouble, plus an introduction to BLRfs HR Playbook: HRfs
Game Plan for the Future.