When to Hire Internally vs Externally

Should you hire from outside or within your company?

July 1, 2021

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Human Vectors by Vecteezy

When hiring, teams have the option to hire from within the organization, or to hire outside talent. It’s important to remember that your decision not only impacts the individuals involved in the hiring process, but can also impact how other employees and even other organizations perceive you. In short, how you hire says something about your company’s values, growth strategy, and long-term goals.

Before deciding, assess what you truly need from the person stepping into the role, and your company’s goals overall. There is no right or wrong answer; and ultimately, you may decide that an internal hire might be right for one role, while an external search is the best fit for another.

Use the below guide to help you understand when making an external hire is more advantageous than an internal, and vice versa.

When to hire from within

Saving your talent acquisition team both time and money, at least in the short-term, are common reasons to hire from within. However, there are other circumstances in which you will want to hire internally, rather than look outside your organization for talent.

When you want to reward a team member for their loyalty

If there’s a loyal, hardworking member of your current team who wants more responsibility or to take on a leadership role, promoting them will show how much you appreciate their dedication. This is one of the main reasons why companies choose to hire from within; rewarding loyalty promotes continued loyalty. Plus, moving long-time employees into a new role can also decrease the chance that they will burnout or lose motivation, by providing them with new challenges and opportunities.

When you want to build on a team member’s leadership skills

You should also consider hiring from within if you have individuals who show promise in leading others. They may have started in entry-level roles and now are the person that others go to for guidance. This indicates that they are trusted by others, and may be interested in open leadership roles in their area of work.

When you have an open role that matches a team member’s skills & career path

Maybe you have a team member who has become the go-to person for a certain process, program, or product. Or someone that has expressed interest in a certain area of your business. The role you are looking to fill might be a current employee’s ideal next career move. If that’s the case, hiring from within will be rewarding for that individual, and it will also signal to other team members that you encourage cross-training and continued professional development.

When to hire from outside your organization

Looking outside your organization for your next hire has several key advantages, including adding new ideas, leadership, and diversity to your workforce.

To hire for a role with skills or experience not readily available on your current team

Encouraging skill-building and continued education among current team members helps with employee retention. However, in order to meet your company’s goals, your team may need individuals with certain hard or soft skills that aren’t readily available internally. For example, you may have a team of salespeople but no one with experience leading a sales team, or you may need to find an engineer with more niche technical skills than your current staff.

TIP: Are you debating whether you need to hire senior vs junior level employees? Check out this blog post for tips to help determine the best option for your organization!

To access a wider talent pool

Hiring externally opens up your company to a larger pool of applicants than if you decide to hire internally. Especially as news continues to surface about The Great Resignation and more Americans consider leaving their jobs, your company stands to gain from having a larger range of skillsets and experiences to choose from. Having more options throughout the hiring process means you can determine the exact criteria you are looking for in a candidate, instead of working from a relatively small number of options internally.

To bring a fresh ideas to your company’s culture and leadership

It may feel safer to hire someone who already understands your company culture and values. However, a new hire can bring new ways of working and communicating that have proven to be successful at previous companies.

If you’ve invested in your company’s culture and have successfully conveyed it to candidates, it can also make your future external hiring efforts easier. According to a 2020 G2 survey, 92% of people would consider changing jobs if offered a role with a company with an excellent corporate reputation. If an external candidate is excited about a company’s culture during the hiring process, that indicates that they’ll be committed to strengthening and expanding on it as an employee.

To increase the diversity of your team

As you’ve probably read, companies with diverse workforces outperform their competitors by 35%, according to a McKinsey study. If increasing diversity is one of your organization’s goals, open positions are a perfect opportunity to prioritize DE&I. Not only is diversity hiring a win-win for building an equitable workforce and your bottom line, having varying perspectives means you have more insights into your customers’ needs.


There are pros and cons to each option, but regardless of which you choose for each open role, the goal is to bring on the person who will help move your company’s mission and goals forward.

Depending on the circumstances, hiring externally and creating a new role may actually save you time and money than hiring for open roles. Moving someone into a new role internally means their position will be left vacant, and you will still have a role to fill.

Are you concerned about the investment of time and money needed in order to successfully hire externally? Using a recruiting automation software like Fetcher actually helps companies decrease their hiring times in a cost-effective way through automated sourcing and outreach. Learn more and schedule your demo today.

Check out our other blog posts for more talent acquisition tips and insights into recruiting trends.

About Fetcher

At Fetcher, our mission is to introduce companies to the people who will help them change the world. Our full-service, recruiting automation platform automates those repetitive, top-of-funnel tasks, so you can focus more on candidate engagement & team collaboration. Simplify Sourcing. Optimize Outreach. Hire Top Talent. Learn more at fetcher.ai.

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