When unemployment was at its peak, companies could afford to cast a wide net in looking for the right new hire. Many highly-skilled workers were looking for a job where they could share their talent.
However, with unemployment down, finding that perfect new hire isn't as easy as it used to be. In this environment, it makes more sense to develop your existing employees and shape them to take on more responsibility within your organization.
There are four major reasons for this:
Your Employees Are Already There
So simple! The hiring process is costly: time and resources are devoted to advertising and interviewing; if the position is a new one, you have to factor in the new salary and benefits as well as extra work space and equipment.
By moving a current employee, you save those recruitment costs and a measure of the training costs, since the employee is already fluent in the day-to-day workings of your company and may even already have some insights to the new position or responsibility.
New Hires Are Risky
Any time you put someone new on the team, there's a chance it won't work out. As of 2014, "one in six employees quits a new job within six months — and 15% either makes plans to do so or quit outright with that time frame," in large part because the onboarding process is not thorough enough to prepare them to do the job. The new employee might not like the gig after all, or he or she might have a hard time fitting into your company culture or work ethic. If that new hire decides to leave after a few weeks or months, all that money you spent to bring her on is wasted.
Your existing employees have already proven their fit and their loyalty.
Empower Your Employees
This Forbes article mentions "opportunities for development" as one way to boost job satisfaction. Everyone wants to feel as though their work matters and that they have an opportunity to get better at what they do--and be acknowledged for that. Giving people a new title or more responsibility and the skills to go with it keeps employees engaged and interested in their work.
And consider this, as reported by Harvard Business Review:
"Internal recruiters cold-call the employees to alert them to openings inside the company. In 2014 the program reduced attrition by 1% and moved 300 employees, many of whom might otherwise have left, into new positions. Credit Suisse estimates that it saved $75 million to $100 million in rehiring and training costs."
You're Investing In Your People
Among the younger generation, 87 percent of millennials say development is important in their job. A willingness to help your employees develop professionally demonstrates your commitment to them, which strengthens their commitment to you, making them less likely to leave. "In general, people leave their jobs because they don't like their boss, don't see opportunities for promotion or growth, or are offered a better gig (and often higher pay); these reasons have held steady for years."
By encouraging your own employees to continue to advance in the company, you're showing your best people you want them with you for the long haul.
Help your employees succeed in their new roles via training and mentorship programs. Giving them the opportunity to do their jobs better improves their confidence and morale, which is always good for business.
You hired your employees the first time because you believed in them, and they still work for you because you like what they've done so far. With that in mind, don't overlook your best assets when it comes time to fill a new role or assign new leadership and responsibilities. You might have hired the perfect person for it a long time ago.