An inside hiring job

I recently read an article that stated 75 to 80% of all hiring done in late 2009 and early 2010 was done internally. In short... for all of those positions that are opened, three-fourths were filled by an internal candidate. While this does not sound good for the unemployed, it is also not ideal for the currently employed. There are reasons that people are hired within, so let's take a look at some pros and cons.

Why do companies hire within? Quite simply, to retain their employees. If someone is performing exceptionally and a position is opened at the next level, a promotion is in the works. Normally a company will be required by HR to post the open position, regardless of whether an internal candidate is slated for the job. On the downside (for society and those looking for work), this creates a false sense of hope. A person who is completely and overly qualified for the position, submits their resume, believing that this could be the position to get them back on track. They were born for this position. Little do they realize that the company already has their person, in-house, with no need for additional training or needing to get up-to-speed; no having to set up email accounts, or get them access into restricted areas, do paperwork or payroll submission, no background checks, possibly not even having to move their office, purchase new computers or equipment... all of the things that would have to happen should this position go to someone outside of the company wall.

Companies will do this to consolidate and save money as well. What happens to the position of the person who was just moved/promoted? Is that position now open for hiring? Not exactly. Companies will take that position and never refill it, instead spreading the work of that employee among the remaining staff in that area. This does not always happen, but it is a good cost saving measure for the company. That is one less salary plus benefits, one less computer to buy, office to fill with a person (more space for other projects), but the company still gets the same work or productivity.

However, you cannot get discouraged. Certainly, I have been on the bad end of this, getting a rejection email stating that the position was filled internally. But at least once, I was the outside applicant, who got the job over the person who was slated to fill the position. Between two finalists, an insider and myself (the outsider), it came down to the interview, presentation and the ideas that I brought from seeing the situation from the outside. And that is sometimes what is important: a fresh view on the situation. If you can convince the company that one of your greatest assets is your vision without knowing the history, the company will take a greater look at your potential.

NOTE: Some of the above statements behind why companies hire internally vs. externally are speculation on my part. I do not know all the reasons, however these do make sense to me.