It’s the dilemma that many managers face when a position within the company opens up: To promote one of your loyal, tried-and-true employees or to venture into the unknown and hire from outside the company.
It’s never an easy decision for anyone, and every company’s situation is slightly different, but if you’re finding yourself facing it, here are some questions to ask yourself to help decide whether it’s better to hire someone new or promote someone from within.
1. How tight is your budget?
If the first consideration you have for your new hire is keeping the person’s salary manageable, know this: new hires tend to earn about 18 to 20 percent more than employees hired in-house, suggests 2012 a study published in Administrative Science Quarterly as detailed in The Wall Street Journal. If funds are a big issue, take a look at the amount the in-house candidates are currently earning. Chances are you’ll need to give that person a salary bump in order for them to feel comfortable taking the job, but that salary increase may still be less than a new hire would demand in the position.
2. Do your existing employees have the experience?
Sometimes you’ll be hiring because your company needs a dose of new blood, a fresh perspective or a set of skills that none of the existing employees seem to have. If that’s the case, you may be able to save yourself time and money in training an existing employee by bringing in someone who’s already skilled.
3. Are you willing to wait to get someone up to speed?
Then again, that new hire may have the skills for the job, but you also have to consider how long it’s going to take for that person to learn the layout of the building, your software programs and your company processes. For some positions, it will take the same amount of time to teach that new hire about the nuts and bolts of the company as it would to train an existing employee in a new set of skills.
4. Do you want to change the company culture?
There’s more to “cultural fit” than you might imagine. If you’ve interviewed external candidates and are not sure whether they’ll fit into the company culture, you may be better off hiring an existing employee who already fits in. In other words, if you’re doubting whether a person is going to fit in, chances are they won’t.
5. How easy is it for you to gauge a person’s “fit"?
Then again, if you’re aiming to change the attitudes, work ethic or workflow within the company, the only way to do that may be to hire someone new. Even better: hire a few new employees instead of just one, carefully selecting people who embody the type of company culture you’re trying to get. It can be difficult to determine whether someone really fits your company culture – or your desired company culture – in interviews, but researching the person online and checking his or her references should help.
See also: How to Induct a New Employee
Ultimately, the decision to promote from within or to bring on a totally new employee is going to come down to a lot of soul searching and a good deal of research and interviewing. People you’ve already hired will be easier to train and may be more successful in a strong company culture. When you’re looking to change that culture, however, looking beyond the four walls of your workplace may be the way to go.