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Updated Mar 22, 2023

Why You Should Promote From Within Your Company

Before hiring externally, your company should consider the benefits of internal recruitment. The right person for the job may already work for you.

Laura Spawn, Community Member
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Table of Contents

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Whether you’re filling a vacancy for an existing position or creating a new role due to organization expansion, recruiting for a job opening can be an exciting time for a company. While your first instinct might be to start searching the globe to see what’s out there, you might be best served by looking closer to home. Before hiring externally, you should examine the merits of internal recruitment and how this approach can benefit your business and your employees.

Employers can make the most of internal hiring by choosing employees that have demonstrated business loyalty, are a cooperative fit into company culture and help inspire increased productivity among their workforce.

Let’s look at the best ways to promote internally and the benefits and risks your business may face during the process.

Business benefits of promoting from within

Internal recruiting is an efficient hiring tactic with both evident and subtle business benefits. Existing employees that have already gone through the onboarding and training process can save the company time and money. Plus, having your staff see that you are open to promoting internally can encourage high engagement, as they seek opportunities to move up. 

These six considerations make a case for promoting from within rather than hiring externally.

1. In-house candidates are low risk.

There is a built-in level of security when the talent pool already works for the hiring company. When you’re already sure of the candidates’ quality, the recruiting focus is on finding the right fit for the vacancy. You also have direct access to all applicants’ work histories, personnel files and references.

2. Trust is already established.

Expanding on the low-risk nature of promoting from within, internal recruiting is a reminder of the mutual trust established between a current employee and their colleagues. They already have cultivated relationships and understand your business’ mission, objectives, challenges and how their career goals align with the company values and culture. [Learn More: Tips for Hiring on a Limited Budget.]

3. Hiring from within saves money.

Internal recruiting saves your business the costs associated with external hiring, such as advertising the job posting, subscribing to applicant resume databases and paying for background checks. 

4. Internal recruitment keeps company morale high.

The potential of upward mobility within the workplace fosters an engaged company culture and reduces employee turnover. Employees who feel seen and valued are inspired to complete their best work daily.

FYIDid you know
Internal recruitment gives a voice to your entry-level employees. For example, if an entry-level employee is promoted to manager, that new leader can help explain to management the entry-level team’s valuable role and what they might need to meet goals and thrive.

5. Hiring from within is a cyclical investment.

Imagine internal hiring as an investment circle that promotes employee loyalty and reduces turnover. When you hire someone new, you spend time onboarding and training them, a form of investment that will hopefully lead to high productivity and quality workflow returns. 

Suppose the investment is booming and the employee earns a promotion. In that case, you will then build on the knowledge, skills and training already imparted to the employee while inspiring the employee to reinvest in the company by not seeking another employer.

6. The learning curve is shorter.

Transitioning an in-house employee to a new role, especially one within their department, takes much less time and far fewer resources than onboarding an external hire. Internal hiring is a particularly useful strategy when you must suddenly fill an unexpected vacancy due to occurrences like resignation, a change in health status or death. 

When time is of the essence, the company knowledge already possessed by a current employee is invaluable.

Types of internal recruitment

When promoting from within your company, you have several options for internal recruitment strategies to match your business style and hiring goals.

Open job posting

In this type of internal recruiting, your human resources department or upper management announces a vacancy to which any qualified candidate may apply. The job can be posted on a business communication platform like Slack, through a company email or to an internal job board.

Manager referral or nomination

Some businesses prefer a subdued approach to internal recruitment. Rather than making an open job posting, you may seek manager referrals or promotion nominations of top-performing employees from department supervisors. This form of internal recruitment could also include department transfers, such as an employee from Department A could move to Department B while earning a promotion.

Part-time employee or freelancer to full-time employee

A part-time employee or an independent contractor already working with your company could transition to a full-time employee role if their work is exemplary.

Succession planning

Succession planning is a business practice for recognizing and training new leaders to replace former employees who move on to other organizations, retire from the company or leave the workforce altogether. With this type of internal recruitment, managers are trained to understand and develop the potential within their team members. When a promotion opportunity arises, you can immediately consult those managers about which employee is most qualified for the job.

Did You Know?Did you know
A recent report from Pew Research found that 33 percent of workers left a job due to a lack of advancement opportunities.

Boomerang employee: A hybrid recruit

In addition to the four types of internal recruitment, companies can look to boomerang employees for promotions. The boomerang employee strategy is a hybrid hiring model combining internal and external recruitment elements.

A boomerang employee is a worker who takes a job with another company but returns to work for their former employer. Your business can relish the dual benefits of working with an employee already familiar with your values, culture and structure while utilizing the new industry knowledge and experience they gained while working for another employer.

How to make the most of an internal promotion

Despite the many business benefits of promoting from within, you should take additional steps to give your internal hiring plans the best chance of success. These suggestions can serve as an internal recruitment firewall:

  1. Abide by all federal and state laws regarding hiring discrimination based on race or color, national origin, age, citizenship, military service, religion, sex, sexual orientation, pregnancy, genetic information or disability.
  2. Select the internal recruiting strategy that makes the most sense for your business’ goals and needs. The four styles of internal recruiting discussed above, as well as the boomerang employee option, are all viable starting points.
  3. Do not make a companywide job opening announcement if you already have a top-performing employee in mind for the promotion.
  4. Ensure that internal promotions are not the only ways employees are validated for their work ethics and talents or celebrated for their accomplishments.
  5. Avoid personal bias and favoritism toward applicants. Naturally, some employees and managers will have closer relationships than others. Still, personal opinions should not overshadow objective data or skills assessments that demonstrate which in-house candidate is right for the job.
  6. Develop a thorough job description as detailed as it would be for an open, public job posting. Yes, internal job candidates have company experience and knowledge, but they want to be just as informed about the job’s responsibilities and requirements as any outside candidate would be.
  7. Create a system to track applicants with the initiative to apply for promotions to streamline future hiring campaigns. This resource will allow you and your company’s managers to quickly access resumes and cover letters, previous applications and these leadership-minded employees’ top skills and qualifications.
  8. Conduct transparent internal hiring and be prepared to constructively explain to an employee why they were not chosen for the promotion and how they can improve their hireability in the future if they ask.
TipBottom line
When promoting an employee from within, it is important to formalize the process by sending the staff member a promotion letter.

Potential drawbacks to internal promotions and how to mitigate them

Although developing a hiring strategy is an individualized process that depends on your business’ human resources needs, financial well-being and immediate and long-term objectives, internal recruitment may create challenges that apply to all hiring scenarios. 

The good news is these potential drawbacks to internal promotions have clear solutions.

Limited applicant pool

One potential drawback to promoting from within is that you will not have access to the diverse selection of applicants who you would encounter with an external search process. Although internal job candidates are known to their managers and may not have to complete a formal interview, these potential hires will not necessarily contribute outside-the-box thinking to the vacant position. 

Bottom LineBottom line
Any possible negative impacts from a limited hiring pool can be lessened by exploring cross-department hiring, including opening the position to remote workers and searching for in-house applicants with previous professional experience in a similar role.

Stagnant perspectives

A significant benefit of external hiring is that it provides an instant burst of new ideas and perspectives within your organization. To avoid reinforcing the status quo within your company, prioritize engagement among team members. 

It is vital to keep lines of communication open and encourage team members to express their opinions, not only during periods of internal recruiting but year-round. Regularly check in with employees about what works and what could improve. 

Collect feedback through surveys, team and one-on-one meetings, performance reviews and exit interviews.

Resentment among nonpromoted employees

“Why not me?” is an understandable question employees may ask of themselves or directly to managers when a co-worker is selected for a promotion instead of them. Employees feeling overlooked or undervalued can breed jealousy and friction within the workplace, but this challenge of internal recruiting can be minimized with care and clarity.

Suppose you or team managers notice shifts in team cohesiveness after an internal promotion. In that case, you can schedule individual meetings with employees to discuss concerns, answer questions and address why another team member was selected for the promotion. 

In addition, you could provide employees with guidance, resources and professional development opportunities to increase their likelihood of earning a future promotion.

Another vacancy in the existing workforce

When an in-house employee is promoted, their upward move will naturally leave a gap in their former role. Work with your team managers to decide if the promotee’s former position can be absorbed into adjusted duties across the department, dissolved altogether or filled by a new hire. 

If recruiting a new team member is the best solution, the internal hiring process begins again, or you can consider outside hiring to onboard external talent.

Promoting from within is good for everyone involved. Businesses profit from lower hiring costs, uninterrupted productivity and reduced employee turnover, while employees benefit from high company morale, professional validation and a culture of upward mobility. 

Any business with current or upcoming vacancies should feel encouraged to look first toward internal recruiting before hiring external candidates. After all, the grass is not always greener on the other side — sometimes, it’s just a mirage.

Julie Thompson contributed to the writing and reporting of this article.

Laura Spawn, Community Member
Laura Spawn is the CEO and co-founder of Virtual Vocations. Alongside her brother, Laura founded Virtual Vocations in February 2007 with one goal in mind: connecting jobseekers with legitimate telecommute job openings. Laura has nearly two decades of experience working from home and spends her days overseeing Virtual Vocations' team of more than 50 remote employees and contractors, who together have helped more than two million jobseekers over the last 12 years. Laura holds a bachelor's degree in public agency service management from Northern Arizona University. She lives in Oregon with her husband, three children, and two dogs, Ivy and Jilly.
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