9 Talent Management Attributes: Better to Hire From Outside or Inside?

When you’re looking to hire new workers, is it better to hire from the outside or from the inside? This is not a new question, and it does not have an easy answer. In our experience of attracting, developing, engaging and retaining top talent, the best answer is that “it depends.”

Here are some of the factors to consider when you are looking for top talent to build your organization’s current and future capabilities:

1. Length of time to hire
Look internally first if you need to fill a position quickly. It takes far less time to hire from within because your talent pool is on site, easily accessible, and known.

2. Speed to productivity
Workers promoted internally typically get up to speed faster than new external hires. It is generally acknowledged that external hires take up to about two years to be fully productive in their new jobs. Everything is new…they have to build relationships and figure out where to go for support and resources.

3. Institutional knowledge
Hiring internally allows you to build on the employee’s knowledge of how the company works. They have developed the firm- or industry-specific skills needed to succeed.

4. Cultural fit
There is no doubt that an employee who does not fit the organizational culture will not be as effective as an employee who understands and adheres to the values and behaviors that the company espouses. Presumably, if you hire from within, you can be pretty certain that the employee knows and supports the organization’s culture.

5. Morale and company loyalty
If you hire from the outside as a matter of course, you risk undermining employee morale and their loyalty to the company. Employee engagement experts will tell you how important the idea of career development can be to your work force. If employees do not see a path toward advancement and growth, they will be discouraged and disengage or leave.

6. Cost
Almost always, it is more expensive to hire externally. Hiring managers have come to expect to pay 10 to 20% more for outside hires. This can be because of external hires’ more impressive resumes or because it costs more to lure them away from their current position into one that is somewhat uncertain.

7. New skills and approaches
The one clear and persuasive advantage to hiring from the outside is that you bring new skills and approaches aboard. Companies benefit from multiple perspectives and diversity. The mix of ideas in an open environment fosters innovation and constant improvement.

8. Onboarding process or system
If you hire externally, you should be confident that your onboarding process is a sound one. The faster you can incorporate new hires into the fabric of your organization, the faster they will contribute to the company’s overall business success.

9. Performance on-the-job
Despite getting higher pay, Pennsylvania Wharton School professor Matthew Bidwell’s research on hiring decisions in the investment banking industry shows that external hires receive lower performance scores during their first two years at a new organization as compared with internal hires in similar positions.

So it’s a mixed bag. Consider your unique situation carefully before hiring and prioritize the factors that are most critical to your organization’s success.

How to attract, develop, engage and retain top talent

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VNUS Medical has been very pleased with the effective management development programs that LSA Global has delivered for us over the last four years. The programs have been universally facilitated by experienced and best in class instructors. The knowledge gained by our management team has been put into practice very quickly. VNUS is very happy to be working in partnership with LSA because they consistently deliver excellent programs that receive exceptional feedback from our management team.

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We have worked with LSA Global for our learning and development needs and have always had great success. They helped us recently with customized Management Workshops that we held for the second time. It was fantastic, and I would highly recommend LSA to anyone that is attempting to get immediate and impactful improvements.

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The Next Generation Management Development courses have helped me communicate more effectively with my peers and teammates. By utilizing effective communication techniques such as clarifying and confirming, and asking open ended questions, I have been able to clarify and understand information in situations where I would have otherwise asked limited questions and made false assumptions.

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LSA has been a tremendous asset to my portfolio, both at my current company and my past company. As an HR leader, I am always looking for ways to find external resources that can provide a solution to our management training needs. LSA does that for me. Their solutions are presented in a much more leadership-oriented manner so as to be crisp, business relevant, and easy to apply right back on the job. I will continue to augment our programs using LSA solutions.

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I have worked with LSA Global at previous companies and welcomed the opportunity to bring them in to support my new organization. We worked closely with LSA to design a solution for our Client Partner Teams and Management Training on both coasts. LSA designed a customized solution for our business and organizational culture. LSA is a quality organization, one that I’d recommend to any company looking for a first class training and consulting partner that makes an impact.

Laurie Torres
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Congratulations on your pro-activity in establishing this program and developing such an effective New Employee Orientation course.

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Fujitsu

Our company engaged LSA to do a specialized “train the trainer” program, and the consultant’s performance outdid our exceptionally high standards for such a program. Very crucial to the success of this program was the work done upfront to discuss our needs and to interview key members of our organization so that the program specifically met our goals. Our facilitators continue to comment on the success of the program. Thanks also for the follow-up.

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Cutera

I’ve been associated with LSA for the last 8 years and have found them to be an extremely professional, well managed full service training organization. Since working with LSA, I’ve participated in a number of solutions ranging from Performance Management to Assertiveness Training – I’ve found that the quality of the resources is superior. They are well prepared and have definitely done a considerable amount of pre-work in order to customize our culture and business into the total learning experience – making it most beneficial for our employees.

Duane Schroeder
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The LSA Global team was very receptive and flexible to our needs every step of the way. Their staff and facilitator demonstrated attention to detail, responsiveness, and professional courtesy. The participants were thrilled with the outcome and rated the communication skills workshop and the facilitator as ‘Excellent’. I’d highly recommend working with the LSA Global team to meet your professional development needs.

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Intuit

Understanding and conforming to legal compliance was very important to our company. We turned to LSA Global to provide a quality and cost effective way to ensure that we were AB 1825 compliant. Their interactive eLearning program was top-notch. It allowed our managers to learn at their own pace, and on their own time. The program was tailored to include our logo and our internal harassment policies. It was interactive and met all federal and state legal requirements. I would highly recommend LSA Global to any company looking for an efficient and effective and top quality way to train their managers to be in compliance.

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We have been able to utilize LSA’s extensive network of top-notch resources to leverage our investment in employee development. The result has been the cost effective and highly efficient delivery of quality educational and management training programs.

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