Outside hires take three years to catch up.

Wharton management professor Matthew Bidwell found that It takes up to three years for an outside hire to operate as competently as an internal hire. If that weren’t bad enough, he also found that external hires are paid 18% more! (Here’s a link to the study)

In recent years the proportion of external hires has risen to eclipse that of internal hires. Peter Cappelli, professor of management at the Wharton School in Philadelphia, found that:

In the era of lifetime employment, from the end of World War II through the 1970s, corporations filled roughly 90% of their vacancies through promotions and lateral assignments. Today the figure is a third or less.

As the average duration of employment decreases, the impact on our organizations intensifies. What can we do to combat the trend?

The best thing to do is to keep employees happily employed. Unfortunately, that’s a little outside our wheelhouse as talent sourcers.

So what can we do?

You can start by posting our open positions internally first. This set’s up internal hiring as your preferred source with external hires taking up the slack.

Your next move will be to protect internal candidates from managerial interference. Cappelli noted that during the internet boom managers weren’t notified when their employees interviewed for a higher department. Why? Managers often blocked internal promotions, which prompted ambitious employees to leave.

Does this happen at your organization? If so, you should consider keeping current managers in the dark when it comes to internal mobility.

Finally, you should implement a formal Internal Mobility Platform like the one we offer at EmployeeReferrals, Inc.

Our platform ensures every employee is aware of the open positions at your company and provides a private platform for communication between your in-house recruiters and those employees looking to move up.

Would you like to see a demo of our Internal Mobility tool?

Click here to schedule an appointment.


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