One of my own challenges of writing client CVs is that I always talk through the dual road – that the CV is not a standalone: the CV can be brilliant as a reflection and clarification of the candidate. What it can’t do is either ensure that candidate applies for the appropriate job – realism vs. aspiration as I always tell them – or know whether the company applied to – correct or not – has a preference for external or internal, or even a specific plan regarding the currently advertised role: they may already have recruited internally but know that legally they must advertise.
From both the company’s own / known point of view, and that of the hopefully-researched applicant’s, interviews and job searching is determining whether the company prefers hiring internal or external candidates. Many clients I have spoken to say they have been told the company’s final decision was to hire an internal candidate.
My thinking is therefore, let’s find out the reasons and motives behind hiring external versus internal candidates, and the positives and negatives to each.
The person who fills this position regardless of being an internal or an external recruit is to bring value in. Internal and external candidates offer completely different values and it is important to know which values are being brought by each category.
INTERNAL HIRING
Internal hiring can be horizontal – from one department to another one, or by promotion – offering a higher position to a current employee who is familiar with the job and has the potential to perform the new tasks and accept more responsibility.
UPSIDE – PROBABLE
The internal candidate knows the business model, goals, culture, and – crucially – the team (to a larger or smaller degree). But – or and depending on what role the employee is taking up – the team also knows their abilities (or lack of) to do the job based on previous performance.
The internal candidate has already demonstrated his or her potential, and has established a relationship with their colleagues, as well as the leaders and management. Of course the relationship may be good with the manager but not with the colleagues – a probable recipe for a tough road but that’s not for here.
This established relationship and knowledge about the culture and other employees should help the newly-promoted employee to settle in quickly. As a result, they are able to assimilate faster into their new position and role. Internal hiring usually brings a pay rise – isn’t that why most people apply? – which increases employee satisfaction and morale. And internal recruits are useful for long-term commitments and planning because their hiring says to other employees that the organisation values their career planning and development.
DOWNSIDE – POTENTIAL
Hiring internal candidates prevents new minds and new ideas from entering the company. Knowing the personnel, internal environment, and culture could obstruct the newly promoted employee from making tough decisions and implementing required changes if the culture is one of resistance to implementing changes, or the implemented changes would effect on the current employees.
There can, from experience, be a naivety here too. I was, many years ago, promoted by a younger manager. I wasn’t capable, he liked me, he was inexperienced – all happy in the playground until it was evident I couldn’t hack it and he was given a spank for being stupid enough to promote me. Not a good few weeks!
EXTERNAL HIRING
External recruitment is usually based on reviewing impressive candidates – based on impressive CVs, past positions and job titles. Externals will often, though not always, have higher education and more extensive work experience than the internal candidates. The education serving the role better is, of course, a hot topic in 2017 – many business leaders are unimpressed with degrees and there are now more graduates in jobs that don’t require a degree than there ever have been.
UPSIDE – PROBABLE
The external candidates bring a new energy and a fresh vision – they’re keen and hopefully well-researched. They may also bring skills and knowledge that were not available internally. The external hires are probably eager to make changes to their new work place and implement their new ideas, information, and practices. Hiring external candidates can also increase diversity and shake things up, perhaps refreshing or even reinvigorating current employees. That of course all assumes they settle quickly and are accepted.
DOWNSIDE – POTENTIAL
An external candidate is always a gamble – you don’t know if they will be a good fit and if they have the required skills and abilities to perform the job. On paper, they may be great; on the shop floor – who knows?
Also – and not to be underestimated in post-2008 austerity – hiring external candidates is associated with higher costs as external recruits tend to be paid more. In addition, external candidates need longer to bed in and adjust, to become familiar with the culture and business model, to build relationships, and learn the ropes – the current employees spend time training the new employee to bring him/her up to speed. It’s either going to be pleasant and seamless for both “sides” or not – by which time the contract’s already been signed. There is always a possibility that the new employee will not fit, which can create friction and dissatisfaction for other employees. As the new employee has to spend time to become familiar with the new policies, system, and work environment. His / her colleagues may feel they’re “carrying” and become resentful.
FACTORS AFFECTING A COMPANY’S DECISION
Bringing in a new and fresh face to a company might be tempting, however it is always hard to integrate new people into a system that is already established. In general, external and internal candidates bring completely different values to the organisation and it is critical to know the different values of each category. Here are some general factors affecting the decision on whether go with an internal or external candidate:
Line managers’ ability to mentor and train a newly-promoted employee vs. external candidate
Organisation’s culture and its openness to possible changes
Higher cost of bringing the external candidate on board
The need and place for new expertise
(http://www.legalsupportnetwork.co.uk/human-resources/resources/internal-vs-external-recruiting-which-side-are-you) – “A 2012 study in the US looked at 6 years of employee data from financial services and publishing and found the following trends about external hires compared to internal transfers
• External hires get paid more than internal transfers
• External hires receive lower performance reviews in their first 2 years
• External hires are 61% more likely to be fired and 21% more likely to resign
• External hires are likely to have a better education and more experience
• Employers underestimate the time it takes for an external to get up to speed”
Pretty reflective of our thoughts above. So in the final analysis……..? With the best will in world, no manager is telepathic and I’m afraid all you managers, no matter how much groundwork you do, are ultimately guessing and hoping (sorry!)
FINAL NOTE
The important note is that hiring an employee, either external or internal, is the start not the finish line. Both need the company’s support to succeed. Internal hires need some push to go beyond what is already acceptable and the external one need some guidance on what needs to be done to avoid conflict with the staff.
