Tool #20: Advantages and Disadvantages to Hiring an Internal or External Candidate

(See Case Study Page 8)

This tools indicates the different advantages or disadvantages of hiring from either within or outside the organization. Organizations can use these tools to decide how to proceed, depending on what characteristics are higher priorities to the organization.

Advantages and Disadvantages of Internal and External Searches
Internal/Closed Search / External/Open Search
Advantages
  • Easier to assess, because more information is available about candidate
  • More cost-effective
  • Employee will onboard to role more quickly, since they will already understand organizational culture, policies, etc.
  • Sets positive tone for other employees in the organization, who will see that there are opportunities for career growth, which may help with employee retention
  • Improves employee morale and loyalty
  • May be less costly salary/benefits-wise than hiring externally
  • Internal candidate less likely to make major changes upon assumption of new role
/ Advantages
  • Provides new perspective and ideas that an internal candidate may not have considered
  • Can provide insight from other sectors
  • May be more likely and willing to initiate necessary changes for future of organization
  • Hiring experienced employees from externally can reduce necessary onboarding if they have served in a similar capacity elsewhere
  • Internal politics / conflict can be avoided
  • Allows for rapid growth of organization
  • Can increase diversity
  • A larger pool of candidates can mean a greater of qualified applicants

Disadvantages
  • Risk of limited ideas or stale thinking
  • May not be able to position organization strategically in order to best face upcoming challenges
  • Onboarding or training may be a difficult change from previous role
  • Internal politics (how will staff react to new leader; how will rejected internal candidates feel towards selected candidate, etc.)
  • Difficult to do if organization is growing rapidly
  • Smaller talent pool / fewer candidates
/ Disadvantages
  • Lesser-known entity – information on candidate is not as available as for internal candidate
  • Search is more expensive, and takes longer
  • Onboarding process is longer, since they need to learn culture, policies, etc.
  • Does not indicate potential for career growth to current employees
  • May negatively impact employee loyalty and morale
  • May be more expensive salary/benefits-wise
  • Current employees may resent an external candidate and not work well with the new leader