The choice between internal and external hiring can be difficult. There are pros and cons to both approaches. For internal recruiting, your company will gain a reputation of having many opportunities for advancement, but when recruiting externally, you have the chance to gain a new insight into the company from an outside source.
Benefits and disadvantages of internal recruiting
When hiring someone from the inside, you have the opportunity to create a strong culture that values and supports internal talent development. The concept of mentoring and rewarding those who put in the time and develop skills to take the next step can energize the whole workforce. Morale also goes up when people hire internally, according to the Houston Chronicle. Additionally, when you hire from the inside, you are avoiding the high costs associated with recruitment agencies.
External recruiting
If you are a small or midsize business and don't have the internal talent pool, external recruiting is essential to hiring. Also, you gain from people's experience, talent and fresh perspective. Often, new employees expose the team to trends from the marketplace that can inspire them to perform at a higher lever. Talent Management recommends that companies do both internal and external hiring depending on the position.
The article warns, however, that between the two forms of hiring, the external is more difficult to pull off successfully because with internal recruits, much about them is already known and understood. External candidates are largely unknown variables, so it can be hard to guess what they will be like with other members of the team.
Lateral promotions
In some cases, just moving someone from one position to another is a good idea. The Houston Chronicle actually recommends this in a story about what to do when someone doesn't make the cut for a promotion, but it can also work for just switching around different people so that everyone can learn a little bit of everything happening in the company.