It's not better out than in!

There are two candidates for the job: one who has been with the organisation for eight years and another from outside. Who is likely to do better? Someone who is already in the organisation (an internal hire), or an external hire who is recruited from outside the organisation?

Two significant pieces of research involving thousands of subjects studied over a number of years come down on the side of internal appointments. One study followed managers in an investment bank; the other followed managers in a retail fast-service operation. Both studies found that internal hires performed better than external hires for two to three years. It is thought this is because people who are already in the organisation know what is expected of them, have the networks to make things happen, understand the culture, and know their colleagues’ strengths and weaknesses. 

Even though internal hires seem to perform better, they aren’t paid nearly as much as external hires. Both studies found that external hires were paid more, with one study finding an 18% difference! Equally unfair is the finding that external hires are twice as likely to receive transfers and promotions. It’s thought that organisations offer both of these as retention tactics for external hires; while it’s not felt necessary for internal hires have who have already demonstrated their stickability.

Sometimes, however, organisations need to bring people in from outside. The capability may not exist within the organisation, and there’s not enough time to develop it, or current models are no longer working and a fresh take is needed. In these instances, it is especially critical that the organisation support the external hire through a structured transition process.

In a McKinsey survey of 1200 newly hired senior executives, those who made the most successful transitions were twice as likely to say they received good support, resources, and information from their employer and their direct reports during the transition. This was especially true for external hires.

At Right Start Jobs, we’re of the view that all new management appointments need support during the transition phase. Research suggests this is especially important for external hires. We have a number of resources to help new management appointees; these include books, self-paced workbooks, an on-line programme, and 1:1 coaching programmes. Our website (www.rightstartjobs.com) includes a number of free resources and some further information on what is required to help new manager appointees succeed.

 

Photo by Elijah O'Donnell on Unsplash