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What frameworks exist to assess hiring internal employees versus external agencies/consultants?
OVERVIEW
Hi there and thanks for asking what frameworks exist to assess hiring internal employees versus external agencies/consultants. The short answer is when it comes to deciding whether to hire externally vs. internally, there’s no one-size-fits-all approach. Internal hires retain organizational knowledge and get up to speed in their new roles more quickly than external hires. Many firms use advertisements in newspapers, job search websites, job fairs and referrals from current employees to fill positions.
Below is a deep dive of my findings.
FINDINGS
I searched corporate websites, academic databases, user forums, review sites and industry reports in order to compose the best answer to the question.
Should you hire internal employees or should you look at the external job market? "It is a useless debate in the 21st century because you have to do both," says Harvard Business School professor Boris Groysberg. He maintains, “It’s not whether you hire from inside or outside, it’s figuring out under what conditions you stay inside or go outside."
On the other hand, Daniel Sonsino, vice president of talent management at Polycom believes "internal hires retain organizational knowledge and get up to speed in their new roles more quickly than external hires." He says hiring internally also increases engagement and when employees' career grows within the organization, they tend to refer others more frequently.
The key to determining whether it is best to hire from within or to look outside occurs long before a hire is made, according to SHRM. Taking a diligent approach to workforce and succession planning is the first step, and what occurs after the hiring decision—during onboarding, or the “integration” process—is equally important.
Like Sonsino, vice president of human resources for Tedeschi Food Shops in Rockland, Mass., Roger Ahlfed, also believes that “when you promote people internally, one of the biggest advantages is that they already know how to work in the environment.” He says when you are considering hiring somebody externally, cultural fit is the most important factor. It is also believed that it is faster and less expensive to hire from within. But external hiring delivers advantages also, including injecting fresh ideas and new skill sets into a company. It also allows the company to choose from a wider scope of candidates. This is not to say that these benefits will convert to successful hires.
From another perspective, IZA World of Labor, September 2016 edition talks about internal hiring versus external recruitment. The frequent question of whether to hire from within or outside the firm when filling job vacancies was raised. "The answer matters, because 'insiders' and 'outsiders' differ in important ways." Research has shown, for example, that "outsiders tend to be better educated and more experienced than insiders," suggesting that outsiders are held to loftier hiring standards. When deciding between internal and external hiring, IZA says employers should consider a number of factors. One of which is, internal hiring is also advantageous in that it serve as an important means of motivating workers.
RECRUITMENT STRATEGIES
Internal Recruitment - According to Chron, "an internal recruitment strategy is characterized by promoting employees from within an organization to fill upcoming positions." Many firms use such devices as job posting boards, email flashes, intranet posts and fliers to advise existing employees of positions they may vie for. This recruitment may be in the form of creating and shuffling temporary teams to fill certain tasks or may be permanent changes.
External Recruitment - An external recruitment strategy is "one which a human resources department will systematically search the employee pool outside its own employees to fill positions." Many firms will use advertisements in newspapers, job search websites, job fairs and referrals from current employees to fill positions. Some companies will utilize a temporary employee agency to fill positions that can be completed quickly and with less company-specific skill required to complete the desired task. Other firms will use headhunters or hiring consultants to seek, screen and deliver employees for a fee.
SHRM asserts that when it comes to deciding whether to hire externally vs. internally, there’s no one-size-fits-all approach. But experts point to general scenarios when it may make sense to consider one approach over the other. Below is a checklist of things to consider.
*Tough corporate turnarounds or strategy shifts are underway.
*Succession planning and performance information is inconsistent,
absent or hard to access.
*Specific skills are needed that are not readily available within the
organization.
*The organizational culture welcomes multiple perspectives.
* Processes are in place that support job training and full integration
into a position.
*An organization is thriving.
*Succession planning and performance reviews are consistent and
transparent.
*An abundance of firm- or industry-specific skills are required for the
job.
*A unique and strong organizational culture may be hard to
understand or fit in with.
* No or few processes are in place to support job training and
integration into a position.
12 STEP RECRUITMENT PROCESS
Finally, Workable suggest a 12 step recruitment process that organizations may consider when position(s) become vacant.
* Identify need for an opening
* Decide whether to hire externally or internally
* Review the job description and compose a job ad
* Select appropriates sources (external or internal) for posting the
opening
* Decide on the selection stages and possible time frame
* Review resumes in company database/ATS
* Source passive candidates
* Shortlist applications
* Proceed through all selection stages
* Run background checks
* Select the most suitable candidate
* Make an official offer
Workable says "the first five stages are mandatory in every hiring. The remaining steps can be adjusted to suit the need or culture of the hiring organization.
CONCLUSION
To wrap it up, review of the data revealed when it comes to deciding whether to hire externally vs. internally, there’s no one-size-fits-all approach. Internal hires retain organizational knowledge and get up to speed in their new roles more quickly than external hires. Many firms use advertisements in newspapers, job search websites, job fairs and referrals from current employees to fill positions.
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