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3 Reasons to Hire from Within the Company


3 Reasons to Hire from Within the Company

When a new job opens up, you may know just the person to fill it. That is, if you think of the potential applicants within your organization first. A common dilemma for hiring teams is whether to look internally or externally for a new employee, but many organizations know the importance of looking at your existing employees first.

One study discovered that external hires were 61% more likely to be fired from their new jobs than internal hires, and they tended to score lower on performance review. Yet, despite their lower performances, external hires makes approximately 18% more money than internally promoted employees. After all, an employee who is promoted is more likely to truly want the job and be interested in growing their role in the company, whereas an externally employee may jump from job to job after one-to-two years at a company.

This can all be narrowed down to three main reasons to hire within the company before expanding your search to external candidates.

Shorter Time to Hire

Searching for a new employee is time consuming. On average, it takes about 44 days to hire a new employee, according to a 2015 report, which has increased steadily since 2010. Hiring from within allows talent acquisition and HR teams to save time during the recruiting process because they can review eligible candidates within the company more quickly. Rather than taking the time to contact new applicants directly or post job descriptions online, publicizing the job to existing employees who are quick to jump on opportunities for advancement will allow you to make hiring decisions much quicker.

Less Training

The average organization spends more than $1,000 per year on training per employee, and that number can change dramatically depending on the technicality of the job. When organizations hire internally, they save additional time and money on training because, in most cases, the internal employee is already familiar with the skills and requirements of the job. Even in cases where the internal employee requires additional training, organizations save time bringing the employee up to speed on company background because of their history. This also means that the promoted employee will have a smoother transition than a brand new hire and will likely be able to learn how to do the job much faster.

Lower Costs

Turnover and hiring are expensive to manage, but hiring from within can save organizations thousands of dollars on recruiting and training. Because it eliminates the need to reimburse travel expenses, pay for advertising and training or leaving the position unfilled for long, hiring from within tends to save organizations a lot of money, particularly on upper-level positions that require more time and training. Instead, promoting an internal candidate allows you to focus on hiring a new, lower-level candidate, which will likely cost much less. Plus, because internal hires tend to be paid less than external hires, the organization saves money on compensation. The Bidwell study showed that employers that sought out external candidates generally hired individuals with more experience and education but underestimated how much time it would take new hires to get up to speed and learn the ropes of the company. No matter what, organizations that promote internally first tend to maintain productivity and therefore lower costs.

How Video Interviews Help Hire Internally

If you are interviewing an internal candidate who works in a different office location, it’s easy to set up a live virtual interview to discuss the role rather than pay for the candidate to travel. Because you already know the employee’s reputation within the company, interviewing them remotely likely seems less “risky” than interviewing an external candidate whom no one at the company has had contact with before. Internal candidates come with clear references and background information, and if interviewers are in multiple offices, some recruiters may not see it necessary to coordinate in-person meetings.

No matter how you hire, it’s worth it to consider your internal options first. After all, employees appreciate the opportunity for growth and the chance to prove their worth. Hiring from within gives employees a clear growth path to work toward, improving their engagement and potentially reducing employee turnover long-term.


Holly Wade is the Marketing Manager at GreenJobInterview. She comes from the technology world with a background in marketing and public relations, where she specialized in content management, brand development and social media. Connect with Holly via LinkedIn: