Internal promotion or outsourcing?

Internal promotion turns out to be the first choice of many companies that want to minimise the costs typically associated with the recruitment process.. This is illustrated by this article in Forbes, which reveals that The economic factor is one of the main reasons for relegating outsourcing to the background.

However, each strategy is linked to pros and cons that are worth considering before deciding on the method to be used to fill that soon-to-be vacant position in the company.

What are the advantages of internal promotion?

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

1. Motivation. Internal promotion has a positive effect on staff morale., It is an indicator that the organisation rewards high performance.
2. Retention. Along with other strategies, such as flexible remuneration, internal promotion, indicating real possibilities for career development, acts as a magnet to retain talent in the company.
3. Improved performance. Internal recruitment helps to drive this. If you have set indicators to identify high performers, you may already know who excels in their role and may need to be challenged again.
4. Savings. Internal promotion reduces recruitment costs compared to those involved in external processes: post a job offer in job portals, outsourcing of recruitment agencies and talent attraction strategies in 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 get on track sooner.

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

What are the disadvantages of internal promotion?

Promoting employees internally 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 limited opportunities caused by the company itself not being open to new ideas and approaches, which would be provided by external candidates, influenced by other cultures and who have been in contact with different ways of working.

Moreover, in terms of team morale, it is not all advantages. And that is because, While it is true that internal promotion can be seen as a reward for commitment and dedication, it can be a double-edged sword, harming the organisation, when:

• Increases the intensity of competition between peers, This can have a negative impact on team culture and performance if employees feel the need to stand out in order to promote themselves, causing interpersonal conflicts.
• Accelerates the staff turnover if promotion opportunities offered to some team members cause impatience in others, who believe that the only way they will be promoted is when someone vacates a position. This leads them to look for other opportunities outside, to accelerate their career path.

Is outsourcing the solution?

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

The truth is that this option is linked to important 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..

In addition to While there is less likelihood of resentment, competition and internal conflict, outsourcing also brings disadvantages. Some of the most important disadvantages of hiring external workers are the uncertainty or the longer 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 among the best qualified professionals already on the payroll.