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Management: Internal Labor Promotions vs. Outside Hiring

Introduction: Internal Labor Promotions vs. Outside Hiring

This study reviews the significant discrepancies between the external and internal recruitment methods as well as verifies their primary advantages and disadvantages.

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The process of internal employees promoting implies the usage of inside positional approach that is available exclusively for the workers, who are already employed by an individual institution. In contrast to it, the adoption of external hiring predetermines the attraction of new employees, which results in the alteration of work methods and specifications (Doeringer & Piore 6).

The modern labor market promotes resilient work strategies. Therefore, multiple contemporary companies and enterprises practice outside hiring as an alternative method of internal recruitment. However, some employers reveal caution about finding new employees since they are not confident about the performance quality of the external market workers.

Internal Recruitment as a Guarantee of Labor Flow Stability

The traditional practice of internal recruiting is characteristic of large enterprises that rely on the principles of work stability and quality of results. Since an employment of new workers always includes a factor of risk, it is entirely uncommon for the employers to employ this type of human resources management (HRM).

Moreover, some theorists regard internal promotions as a method of incentive work performances.¹ Specifically, it is assumed that some employees are motivated to accomplish their work efficiently if they are aware of possible ascending on their posts. A possibility of gaining a senior position promotes talents eviction and skills development. Thus, internal promoting accounts for both human capital and natural abilities unfolding (Fee, Hadlock and Pierce 14).

Internal promoting guarantees efficient financial distributions both for the employers and employees. While the procedure of outside hiring is time and cost consuming, the inside positional transfers require small company’s budget expenditure. Moreover, the workers, who manage to get senior positions, typically are assigned higher wages. Therefore, the financial efficiency of internal promoting serves as the primary advantage of the HRM method.

To sum it up, one can outline a range of consistent factors that enhance the probability of internal recruitment. First, it is acknowledged that the method of promoting accounts for high accessibility of labor since the workers, who are viewed as the candidates for promotions have some experience of working within the specific institution. Consequently, the management possesses some practical information about the employee’s performance and abilities.

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Second, the promotion candidate is well-acquainted with the principles of a corporate culture that exists in a particular company as well as the organizational techniques and work procedures. Thus, the management does not have to spend much time on explanatory sessions for the newly-recruited employees. Third, the possibility of promotions always attracts the motivated workers, who are interested in the constant improvement of their working skills and abilities.

No wonder that many companies emphasize positional advancement as a primary characteristic of institutional culture. The strategy helps the employees to set some long-term goals at work, for the possibility of rewarding serves as a high inspiration and enhances the quality of individual performances.

Fourth, organizational loyalty is a direct consequence of the promotional practices that are adopted by the employers. In other words, constant advancements at work stipulate employees’ devotion to the particular institution, which influences the quality of work. Finally, the HRM technique is cost efficient since it does not require any financial allocation for the basic recruitment operations.

Potential Disadvantages of Internal Promotions

The newly-developed labor standards emphasize a number of disadvantages that concern internal advancements. The HRM experts adopt skeptic attitudes towards the relations between the necessity of inside promotions and the personal qualities and achievements of particular workers. Specifically, it is claimed that the act of positional transition is based on two factors: the vacancy opening and the availability of a particular employee, which matches the requirements.

Thus, it is quite clear that the fact of a particular position appearance does not concern the employee’s performance but rather serves a sporadic payoff of a specific HR removal. When the management strives to fill the vacancy, it often does not find an internal employee, who would serve as the most appropriate substitute. Therefore, the candidate with maximum related abilities is selected for the promotion. Still,

it does not always satisfy the requirements of the company, which can result in a failure of particular work task accomplishment (Fee, Hadlock and Pierce 18).

According to the HRM specialists, internal promoting creates a consistent space for social inequalities. It mainly regards the problem of gender manipulations.² Thus, it is claimed that women’s abilities are often underestimated at work, which signifies a lower level of promotional practices. Consequently, the small part of female promotions stipulates an introduction of low salaries that are allocated to women. The problem raises many debatable questions and supports the idea of gender prejudices on a global scale (Cobb-Clark 11).

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Promoting from within stimulates narrowing of ideas development and precludes introduction of new thinking paradigms. Thus, it is argued that people, who have a tradition of working within one establishment, adopt a single view of working procedures, which stipulates their standardized reaction on the tasks.

Thus, the work procedures that are conducted by the company gradually become trite. Promotions do not reveal any substantial changes in the employees’ behaviors. Therefore, the institution, which runs unchangeable work teams, risks falling into the category of uncompetitive companies.

Finally, the alteration of values and priorities that are supported by individual employees can be a ground for reducing performance quality. Thus, the workers, who experience sudden shifts in professional behavior often tend to disqualify as professionals since their standard occupational practices are hindered by new responsibilities. Therefore, without proper instruction, internal promotions do not turn to yield fruitful results for the individual companies.

External Recruitment: In search of New Ideas

The process of external recruitment is characterized along few lines such as cost distributions, instructional efficiency, and idea flows. Due to the contemporary HRM theories, the process of hiring from the outside stipulates the attraction of innovative thinking paradigms, which makes the functioning of the particular working institution changeable and result-oriented.

Thus, it is claimed that the management of the companies benefit from striving to recruit external employees since this type of employment helps the institution’s administration to choose people, who can bring some changes into the working procedures. The history of HRM development cites the case, which reveals the benefit of the technique.

In 1978, the high-rating company Stroh Brewing Co. was the first to adopt an extensive external recruitment practice. The management of the corporation made a risky decision of employing approximately 20 % of outsiders with a purpose of bringing the company to a new quality level. Despite skepticism, the action resulted in the brand becoming the third largest American brewer (Schuler and Jackson 212).

Besides, a consistent advantage of external recruitment is its quality orientation. Specifically, hiring a worker from an outside space predetermines an employment of competitive strategic techniques, which provides the managements with a wide choice of candidates. In contrast to it, internal promotions offer a limited number of bidders since the management is forced to select a candidate out of available employees.

Due to the recruitment standards that are supported by the major companies, an experience is viewed as a primary asset that enhances the chances of an external employee to receive a desirable position. Consequently, if a company chooses a worker, who possesses some constructive, practical abilities that are related to the work area, it excludes the necessity of preliminary training and prolonged instructions.

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Professional employees are well-acquainted with the type of work that they are about to perform. On the opposite, the workers, who are promoted on the internal basis often lack some knowledge about the specifications of new professional duties and require detailed guidelines on the work procedures.

Finally, recruitments that are performed in a form of external competitions often attract people from the contrastive occupational areas. For instance, the academic writers, who specialize in creating the top-notch scientific papers, are likely to transit to the area of creative writing or journalism.

As a result, the publishing company that recruits an academic writer receives a flow of new professional insights. Specifically, the works that are created by the new employee become well-structured and objectively grounded. The strategy assists individual companies in overcoming its weaknesses and focusing on the improvement of work quality.

Detriments of Novices’ Work

The shortcomings of external labor marketing come as evident opposite effects of novices recruitment. One can outline a selection of the fundamental factors that disrupt the idea of external hiring.

First, recruiting a person from the outside space requires much time and costs. The candidatures selection often comes in a form of application filing, complex reviews of portfolios and other supporting documents as well as the interviews management. Moreover, the process of official employment occupies a prolonged period.

Second, the company that adopts external orientation reduces the chances of the internal employees for being promoted to their posts. Consequently, the procedure of outside hiring is incentive-damaging since it discourages the company’s workers from improving their professional skills. In contrast to it, internal promotions motivate the institution’s leaders to work hard so that to receive a new position within the specific company.

The aspect of organizational foreignism appears to be one of the fundamental disadvantages of external recruitment as well. Thus, due to the HRM specialists, there is a strong tendency for the novices’ work to be inefficient on the primary levels of employment since every company or organization maintains individual standards of corporate culture and organizational rules. Often, it is a challenge for the external employees to get integrated into the work, for new working practice needs complex adaptation.

Finally, the HRM professionals report that a strong opposition to the ideas of novices is often evinced by the company’s employees. Thus, it is a common practice for the external workers to introduce innovative thinking paradigms that are not characteristic of a particular work environment. Consequently, the internal staff members can not adapt to the altered parameters of work.

The relative inefficiency of external recruitment may be supported by the consistent statistic data citing. Specifically, due to the Development Dimensions International reports, the senior employees, who were hired through outside recruitment, fail to match the expectancies of a particular company or organization in 34 % of cases. On the opposite, only 20 % of the internal workers reveal similar results.

Besides, it is acknowledged that the enterprises that recruit more than 25 % of outside employees face double breakdowns in productivity (Byham and Bernthal par. 7). Finally, due to the complex study of 11 global corporations that achieved the top proficiency results in a year, the management of the prevailing number of companies did not commit any external transitions, which resulted in advancing the organizations’ success.³

Conclusion: Finding a Balance between Internal and External Recruitment

The paper characterizes the pros and cons of the internal work transitions as well as analyzes the standards of external recruitment. Due to the findings of the study, there is a concrete area for every type of employment. Thus, internal promotions account for maintaining stability at work. On the opposite, external recruitment stipulates an introduction of innovative, creative ideas and organizational alterations.

The practical evidence proves that placing the novices on the senior positions results in hindering the quality standards. Therefore, an alternative method of employment may be offered as a stimulator of balancing between two major types of recruitment. Specifically, it may be suggested to include external employees exclusively into specific middle sectors that require innovative work insights. Logically, the senior posts have to be allocated for internal promoting since it supports regularity and quality achievements.

Works Cited

Byham, William and Paul Bernthal. n.d. The Case for Internal Promotions. n.d.

Cobb-Clark, Deborah. “Getting Ahead: The Determinants of and Payoffs to Internal Promotion for Young U.S. Men and Women.” Social Science Research 12.1 (2001): 5-16. Print.

Doeringer, Peter and Michael Piore. Internal Labor Markets and Manpower Analysis, New York: Routledge, 2002, Print.

Fee, Edward, Charles Hadlock, and Joshua Pierce. “Promotions in the Internal and External Labor Market: Evidence from Professional Football Coaching Careers.”

The Journal of Business 79.2 (2006): 12-36. Print.

Schuler, Randall and Susan Jackson. “Linking Competitive Strategies with Human Resource Management Practices.” The Academy of Management Executive 1.3 (2005): 207-219. Print.


  1. For the reviews of incentive promotion theories, refer to Gibbsons and Waldman (1999).
  2. For more on gender violations in recruitment practices, see National Longitudinal Survey of Youth (2001).
  3. For more on recruitment statistics, consult the Development Dimensions International reports.

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