Important Reasons to Hire Internally

Basic talent management involves three things; hiring, internal mobility/career development, and attrition. Attrition is estimated to cost companies about 50% of an employee’s yearly salary. And it’s not just the costs of recruiting outside talent that suggest you should promote and hire from within first. There are two more reasons:

1, Studies show new hires perform substantially worse than similar internal promotions and lateral reassignments. It takes three years for a new hire to perform as well as those employees recruited internally.

2. New hires are paid 18% more than internal hires/promotes; and it can take up to seven years to close the pay gap.

Conclusion. Hiring internally through lateral reassignment and promotions can save significant time and money.