internal candidates

9 Reasons Startups Should Hire Internal Candidates

Give one reason why a startup should hire internal candidates when looking to fill a new role?

To help startups discover the benefits of internal hiring, we asked hiring managers and startup CEOs this question for their best insights. From maintaining a culture of collaboration to brand familiarity, there are  benefits to choosing internal candidates to fill new roles.

Here are nine reasons why startups should hire internal candidates:

Maintain a culture of collaboration

While you can hire externally to align with your existing culture, sometimes it’s much easier to simply maintain the company culture from within. While agile methodologies help to make your organization more nimble and ready for constant change and improvement, sometimes changing from within might make more sense for your organization and its long-term goals. Essentially when you’re still in the earlier stages of implementing an agile approach, why start over from scratch when you’ve already achieved buy-in from everyone on your current team?

Debra Hildebrand, Hildebrand Solutions, LLC

Employee retention is worth more than a thousand words

Daily work routine kills, even if the job is the best in the world, so sometimes employees need to change their roles. It is not uncommon for people to think of switching a job due to routine, but an internal job board may stop them before they drop out and leave a company.

As a result of previous experiences, an internal employee needs less time for onboarding. Time plays a huge role here; the sooner they start to work fully independently, the better they will impact the company.

In Tidio, we had three internal recruitments last year; three employees decided to stay with us and take on new challenges. We not only saved our money on three recruitments, but more importantly showed our employees that we care about their development. Our company mission can be summed up in three words: Grow with Tidio!

Ewelina Melon, Tidio

HR Experts and Business Leaders Share Their #1 Tip for Hiring Top Talent

Reduce training time

Hiring internally can help reduce the amount of training that needs to be done for the new position. Of course, any employee in a new role is going to require some amount of training to be able to do their best in the new position. But an internal hire is already knowledgeable about the company and its culture and may be able to transfer some of their existing skills and experience to the new role. This can save time as an internal hire can get up to speed with the new position much more quickly than an external hire.

Dave Rietsema, Matchr

Better performance ratings

Internal candidates tend to cost less than external hires and perform better on the job. Research shows that external hires with higher average salaries have a lower performance rating on manager evaluations during their first two years on the job than internal promotions into similar roles. You won’t just keep your employees happy by promoting them rather than an outside candidate. They understand the inner workings of the business already, which can help them better fill the expectations of a new role than someone from the outside.

Cliff Auerswald, All Reverse Mortgage

Hiring internally saves money

Internal hiring is statistically less expensive than an external hiring process. For startups that are already likely sweating to make a tight budget stretch and flex, that cost efficiency is pretty hard to ignore.

There are a few key reasons why internal hires save startups money. First and foremost, they dramatically reduce the recruitment and hiring timeline, often trimming a multi-week, sometimes multi-month hunt down to just two to three weeks on average.

Then you save on more technical things like background checks, prolonged orientation and on-the-job training. Plus, there’s no need to pay third-party recruiters, which really jacks up costs. Calculate all these factors — both in expenses and the cost of time — and it’s clear why internal saves money.

Morgan Taylor, Sourcery

Loyalty is a two-way street

A startup’s greatest assets are its dedicated employees, and showing that the company prioritizes the advancement of its own staff is essential to building a workplace culture founded on mutual respect. That isn’t to say one can’t consider external candidates during the interview stage, but internal job applicants should always be welcome and, if equally qualified, prioritized when hiring. Without opportunities for career progression, companies will see a rise in employee turnover rate – which is costly enough for big companies but can be devastating to start up.

Jaymee Messler, The Gaming Society

Increases employee morale

Promoting from within the existing employee pool sends a message that there is room for vertical growth at the company. This can be a massive boost to overall morale at the company as it shows that their efforts are recognized and will potentially be rewarded with advancement. As a result, employee loyalty and work ethic stand to see a noticeable increase if internal recruitment is shown to be on the table.

Bill Lyons, Griffin Funding

Must-read: How to Staff a Strong Culture on a Shoestring Budget

The probability of risk becomes much less

With internal hiring, the startup already knows the candidate and vice versa. This means they’re already well acquainted with the employees working in the startup along with the rules and workings. This takes away the maximum risk of whether the candidate is perfect for the position or not. Since the internal candidate has already worked with the company, this adds as a benefit. They can help you with better ideas and approaches on how to tackle problems and situations.

Meera Watts, Siddhi Yoga International Pte. Ltd.

Brand knowledge and familiarity

An internal candidate is already familiar with your startup and someone who shares your vision and core values for your brand. This will save you time from getting them on board for the new role because they have existing brand knowledge and familiarity. It can shorten the learning curves and they can be up to speed easily. It also boosts loyalty and commitment, knowing that you trust them and you value their growth within your business.

Bobby Klinck, founder and entrepreneur

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