Internal promotion or outsourcing?

What are the advantages of internal promotion?

Internal promotion has many advantages for the business, although we could highlight the following four:

1. Motivation. Internal promotion has a positive effect on staff morale, as it is an indicator that the organisation rewards high performance.
2. Retention. Alongside other strategies, such as Flexible remuneration, internal promotion, which indicates real possibilities for career development, acts as a magnet to retain talent within the company.
3. Improved performance. Internal hiring helps to drive this. If indicators have been set to identify high performers, you may already know who stands out in their role and might need a new challenge.
4. Savings. Internal promotion reduces recruitment costs compared to those incurred in external processes: post a job offer in employment portals, hiring agency outsourcing and talent attraction strategies on social networks, among others.
5. Agility. The hiring manager often has knowledge of internal candidates and their performance, which shortens the interview process, allowing the business to continue at its pace sooner.

All these benefits also have a positive, direct or indirect impact on the ROI of recruitment, which is increased.

What are the disadvantages of internal promotion?

Promoting internally among employees also has some disadvantages. Limitation is one of them, and can occur at two levels:

• Because of the problems involved in leaving one vacancy open in order to fill another.
• Due to the limitation of opportunities caused by the company itself, by not opening up to new ideas and approaches, which external candidates would bring, influenced by other cultures and having been in contact with different ways of working.

Furthermore, in relation to team morale, it's not all advantages. And that's because, although it is true that internal promotion can be understood as a reward for commitment and dedication, it can become a double-edged sword., prejudicing the organisation, when:

• Increase the intensity of competition between colleagues, which could negatively impact team culture and performance if employees feel the need to stand out to promote themselves, something that would cause interpersonal conflict.
• Accelerates the Staff turnover if promotion opportunities offered to some team members cause impatience in others, They believe the only way they'll be promoted is when someone vacates a position. This leads them to seek other opportunities externally, to accelerate their career path.

Is outsourcing the solution?

Although most of the drawbacks mentioned can be translated into costs, in reality, they would seldom be as high as those of outsourcing.

The truth is that this option is linked to significant benefits, such as the revitalisation of the business achieved by bringing in new candidates, the greater opportunities to select the best talent, which are no longer limited to the workforce..

Besides while offering the lowest probabilities of resentment, competition, and internal conflict, outsourcing also brings its own drawbacks. Some of the most significant disadvantages of hiring external workers are the uncertainty or longer duration of the recruitment process.

But no doubt, The most revealing drawback of this alternative is the cost, which leads many companies to opt for a strategy of Internal promotion and to choose the candidate to fill the open vacancy from the best-qualified professionals already on the payroll.