As someone who wants the best for your business, you might have already wondered where you can get the best person for an open position. There seems to be an endless supply of candidates both from within the company and from the world outside. The question in front of you is which route you should take.
There is no general rule that governs the hiring process. What you should do instead is assess your circumstance from a business perspective, and start from there.
o get that right person for the right spot, you should first know the fundamentals of hiring. In this article, you can get an idea of what you need to know when it comes to hiring from within or outside your office.
On Skills and Ideas
The typical reason behind the desire to hire people outside the existing pool of employees is the likelihood of getting a more highly trained individual who can provide a fresh insight to the company. External hires might have the advantage of training from another company, and that saves time and money because you won’t have to train them as extensively. This frequently happens when external hires come from a larger company that has a larger training budget. Smaller companies can piggyback on this training.
According to a report by Training Magazine, companies in the U.S. spend an average $4.5 billion on training and development programs for employees. If you are just starting your business and want to have a great employee minus the costs, you should take advantage of people outside that can bring an existing set of skills to the table. There are companies to look out for that train employees well. Make sure that you take note where your applicants come from, so you know whether they are more likely to be competent. Usually, these people are more refined in their abilities and are better at handling the stresses that come with the job.
Unlike with internal recruits, you can get an inflow of new ideas with an employee who has not been exposed or overexposed to your corporate culture. An outside prospect often yields new ideas. He or she may bring information or methodologies from her former employer that can be integrated into your best practices.
You are bound to have financial constraints. This applies not only if you’re a small business owner but also also if you’re part of a larger organization. Usually, hiring internally or promoting from within has the edge if you want to stick with a budget.
Although hiring costs vary by industry and region, it is always surprising to see the final figure after all of the line item costs have been factored in. The total cost of hiring one new employee could be as high as $5,000, or more, in the professional or manufacturing industry. Even hiring a new employee in a services-related industry typically costs more than $1,000, according to Recruiterbox.com.
There are many individual costs incurred during the hiring process, including advertising costs, in-house recruiters’ salaries, third-party recruiter fees, travel expenses, sign-on bonuses, and employee referral bonuses. For certain high-level jobs, there may be employee relocation costs as well.
It is important to note that the hiring costs associated with hiring a productive employee are far less than the cost and overall impact of making a bad hire. If a new employee is not a good fit, and terminates after a short period of time, then the company may experience a number of additional costs, including the cost to recruit and train a replacement, as well as the unproductive time that is lost.
Furthermore, you can avoid expenses on advertising or other costly external hiring methods by attending job fairs or working with staffing agencies. With inside hires, time and money are saved on workplace training regarding company benefits and policies, and unlike new hires, current employees don’t need adjustment periods to acclimate to the work environment. Required paperwork and drug testing have already been completed, so the time it takes to transition a person actively working into an open position is nearly instantaneous.
On Filling the Gaps and Rebalancing
When you want to improve workflow and production, the natural way to go about it is to get people outside. If your small business is experiencing increased success and higher demand for its products or services, it is best to turn to external hiring to avoid disrupting a steady, secure workflow. Promoting a current employee to an open position creates another open position that must be filled. A rapidly expanding company can’t afford to let this happen. Rely on external hiring methods for greater efficiency in expanding your workforce.
For instance, say your company is interested in expanding to New York City, you may want to post on job sites there to gauge interest. It is better to get people that are in proximity instead of having someone from your main office moved there. Internal hiring has a huge effect on workflow, because once the promotion is in effect, you are then creating a gap behind. Instead of this, external hiring can get you people that can support your expansion without greatly affecting other areas of the business.
In the same way, internal job pools may cause problems with a larger company’s diversity mix, and lead to problems with the Equal Employment Opportunity Commission in terms of promoting a diverse workplace. External job recruiting allows for rebalancing on this side.
On Corporate Culture
Company culture is an important facet in the office. Corporate culture refers to the beliefs and behaviors that determine how a company’s employees and management interact and handle outside business transactions. Often, corporate culture is implied, not expressly defined, and develops organically over time from the cumulative traits of the people the company hires. A company’s culture is reflected in its dress code, business hours, office setup, employee benefits, turnover, hiring decisions, treatment of clients, and every other aspect of operations.
According to Business Magazine Inc., the idea of corporate culture emerged as a “consciously cultivated reality” during the 1960s. It became a sociological workplace point of consideration, together with social responsibility. It became part of the checklist for professional development as it led to personal growth. Plus, during that time, personal development was, and still is, linked to cultural integrity and sociological awareness. In turn, this holistic maturity in the workplace resulted to higher corporate productivity.
Company culture is important to employees, because workers are more likely to enjoy their time in the workplace when they fit in with how things run and relate inside the office. Employees tend to enjoy work out better when their needs and values are consistent with those in place where they spend their much of their waking time. As such, they tend to develop better relationships with co-workers, and are become more productive. This is why if you want to keep everything in the office running smoothly and retain a stronger cultural identity for your company, keeping with the current staff and promoting is the best way to go.