Top 3 Benefits of Promoting From Within

May 1, 2017 Ioana Marinescu

It’s a common internal debate among many hiring managers: When you have a new position to fill, should you look to your current employees and promote from within the company or go to the outside market to look for a candidate?

Though your first reaction is to immediately start advertising your opportunities externally, it’s worth your time and consideration to look at your current employees first, as there are many advantages to hiring internally. Below are three of the biggest benefits to promoting employees from within the company.

You’ll save money on hiring costs.

One obvious advantage of promoting from within is that you save on hiring costs: There’s no need to spend time and money advertising your position, reading tons of applications and interviewing a bunch of candidates. Even when you think you’ve found your ideal candidate, there is always the chance he or she will turn down your offer in favor of a competitor’s. When promoting from within, you can quickly narrow down your candidate pool and the information you need to evaluate them is readily available. (No need to wait to see if applications roll in.) Not to mention that minimizing your time to hire also minimizes the productivity lost from having an open position. Plus, the likelihood an employee will turn down a promotion is little to none.

You’ll save money on compensation.

When you hire someone from outside, you have to make sure your compensation package is competitive – particularly when the position is hard to fill. Certain software enables you to gauge how hard a position will be to fill. CareerBuilder’s Supply & Demand Portal, for instance, features a “Hiring Indicator” which shows – on a scale of 1 – 100 – how hard a position will be to fill for a certain job. You can also pull real-time data to see find the average compensation for that position. For example, looking at the data today, senior accountants are moderately hard to recruit, and they are paid $69,500 on average. Staff accountants, on the other hand, are paid $57,200 on average.

If you aren’t able to offer the most competitive rate, instead of going to the market, you could promote your best staff accountant to a senior accountant position. And you may be able to give them a raise of less than the full salary difference between a staff accountant and a senior accountant. (Eventually, you will have to adjust your pay to keep them from moving to a competitor, but in the short-term run you may be able to get away with it.)

You’ll see a better quality of performance.

When you promote employees from within, you already know they fit well with the company culture and have a proven performance record. And because they already know the company and the culture, your internally promoted employees can hit the ground running instead of having to go through an onboarding process, the way external hires might. In fact, research has shown that internally promoted employees perform better than external hires and are less likely to leave their jobs on their own accord. Of course, your newly promoted employees may still need some time to adjust to their new positions, and may require a moderate amount of skills training to ensure they are equipped to succeed in their new positions.

Ioana Marinescu is an assistant professor in economics at the University of Chicago Harris School of Public Policy. Her research focuses on understanding labor markets. She has been collaborating on data and research projects with CareerBuilder and she is especially interested in how to get the right people to work in the right jobs. You can follow her on twitter @mioana and check out her research on her website,

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