REVIEW OF LITERATURE
Heidrick & Struggles an International Inc of Singapore published an article “Internal versus external hiring decision” in 2006 by Charles Moore, Managing partner.
Is it better to hire from within or outside of your organization? This was the problem faced by Heidrick International Inc. The firm had strong internal candidates, but was adamant about entertaining outside talent for Friel’s successor. After a few months, the board met to review a shortlist of external candidates, but despite the exhaustive process chose an internal applicant. While some may argue that we could have saved time and money by only looking within, the process ensured that every possible option was considered, and that we arrived at the best solution for the firm.s
Hiring externally has a number of challenges. The more seniority a position
carries, the greater the chance for failure. Unlike middle managers, the spotlight is immediately focused on the new senior executive. At many companies in Asia, the new executive will be confronted with a “sink or swim” situation: He will either adapt to the new culture in which he finds himself, or he will drown — and the company will be left with little more than an expensive lesson.
An internal hire, on the other hand, has proven his ability to operate within the
company’s culture. So why not, then, stick with only internal candidates? While certainly safer in the short term, relying only on internal promotions can lead to far greater long-term problems for an organization.
Whether an external hire succeeds in his position often depends on the company’s strong, forward-looking human resources team, which understands a company’s business strategy and proactively puts systems in place to ensure new executives adjust to their new culture. They provide the new executive with a mentoring and coaching network that will guide him through the critical first 12 months on the job. As for the executive himself, he should...