Dear By the Numbers:
A preliminary word of caution: It can be a mistake to use statistical comparisons when making a promotion decision. What's right for one organization may not be right for another, so statistics can be more of a hindrance than a help by encouraging organizations to follow the general trend rather than identifying the most successful strategy for their current circumstances.
That being said, there certainly is much interest around this topic. You are not alone in wondering about it.
Unfortunately, although there is no shortage of opinions and best practices on the matter—even the U.S. Bureau of Labor Statistics offers data on both job openings and turnover—none of it indicates a percentage of internal versus external hiring.
With so much interest, why is no one tracking this data?
Statistical data on national issues such as employment (and unemployment) are given much more attention, since they are major indicators of the financial health of a country. Unfortunately, data on organizational hires and role changes are seen as less relevant. While many organizations do track how they fill job vacancies, this is done mostly for internal purposes—either to measure the effectiveness of talent management or to evaluate the cost of recruitment. There is no central repository for, or incentives to communicate, the information.
Whether internal promotion is better than external depends on your organization's situation. Before making a decision, determine what you need (and expect) from your hires and whether the right kind of talent is readily available within your organization.
Is your company growing and experimenting with new products and services? If so, a fresh perspective may be what you need. It can be a tremendous asset to tap an outsider who can bring different skills and ideas.
On the other hand, if you're squarely focused on further developing your core business—in which knowledge of your company and its proprietary processes are critical—the most relevant and most beneficial skills and experience may exist within your company now.
In short, there is no golden rule on internal versus external recruitment. It is important to treat each hiring decision as an individual case. Thinking through the pros and cons helps you determine a recruitment strategy that most effectively serves the organization.
SOURCE: Debbie Hantusch, SHL Group, Toronto, March 11, 2010
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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.