How to Choose Between an Internal Promotion and an External Hire
When a key role opens up, the first question most companies face is whether to promote someone from within or bring in talent from outside the organization. It sounds like a simple decision, but the wrong call can set a team back for months. The right one can accelerate growth, strengthen culture, and build long-term stability. Both options have clear advantages. The challenge is knowing which one fits the specific role, the current team, and where the business is headed.
The Case for Internal Promotion
Promoting from within sends a powerful message to your entire workforce. It tells your team that hard work, loyalty, and development are recognized and rewarded. That kind of signal has a direct impact on employee retention, morale, and engagement across the organization.
Internal candidates already understand the company culture, the systems, the clients, and the expectations. They require less onboarding time and can often step into a new role with momentum instead of starting from scratch. According to a 2023 study from the Wharton School of Business, external hires are paid roughly 18% more than internal promotions for the same role and still tend to receive lower performance evaluations during their first two years. That data alone makes a strong case for looking inside first.
Internal promotion also strengthens your talent pipeline. When employees see a real path for growth, they are more likely to stay, invest in their development, and contribute at a higher level. That kind of culture does not happen by accident. It is built through intentional hiring and promotion practices.
The Case for External Hiring
There are times when the best move is to look outside your organization. If a role requires a specialized skill set that does not currently exist on your team, or if the company is entering a new market or going through a significant transition, an external hire can bring fresh perspective and expertise that an internal candidate may not yet have.
External candidates can also challenge the status quo in a healthy way. They bring new ideas, different experiences, and approaches that have worked at other organizations. For leadership roles especially, that kind of outside perspective can be the catalyst a company needs to break through a growth ceiling.
The key is making sure the external hire is the right fit, not just on paper, but for the culture and the team they will be joining. A strong resume does not guarantee a strong outcome. Fit matters just as much as qualifications, and that is where the hiring process becomes critical.
How to Decide
The decision between internal promotion and external hire should start with a clear and honest assessment of what the role actually requires. Not what it used to require, but what it demands right now and in the next two to three years.
Ask yourself whether someone on your current team has the skills, the readiness, and the desire to step into this role. If the answer is yes, promoting them may be the fastest and most effective path. If there are gaps that cannot be developed quickly enough, or if the role requires a completely different background, then an external search is the right move.
It is also worth considering the impact on the rest of the team. An internal promotion can create a ripple effect of positive energy and motivation. But promoting the wrong person too soon can do just as much damage as a bad external hire. Both decisions carry risk, and both deserve a thorough and strategic evaluation.
Why Working With a Recruiting Firm Matters
Whether you decide to hire externally or want help benchmarking internal candidates against the outside market, working with a recruiting firm that understands your industry can make all the difference.
At Bradsby Group, we have spent over 55 years helping companies make the right hiring decisions. With more than 10,200 placements and a 91.1% retention rate, we know what it takes to match the right talent with the right opportunity. Our team specializes in executive search and direct hire across technology, accounting, finance, healthcare, construction, life sciences, and automation.
We do not just fill positions. We help companies build leadership teams that perform and stay. As an employee-owned firm, every placement is personal to us. Forbes recognized us as one of America’s Best Recruiters, and our clients continue to come back because we deliver.
If you are facing a critical hiring decision and want expert guidance on whether to promote from within or bring in outside talent, Bradsby Group can help you evaluate your options and find the right path forward. Visit our website to start the conversation today.
