When hiring staff, you can either recruit from outside the organisation, or hire from within the organisation.

If possible, filling a position from within the organisation is generally the better option, for several reasons.

Hiring from within is more efficient, usually takes less time and is generally less costly than hiring from outside.

People who have been working in your organisation or company for any length of time have already proved themselves reliable, hardworking and honest. The risks for your organisation are lower and the need to check references is eliminated. This frees you up to concentrate on interviewing for specific skills and personal attributes.

Hiring from within also has an impact on productivity. Internal candidates are already familiar with what your organisation does and how it operates. It takes less time to "orient" staff in their new role, and less time before they start being productive.

The most important reason, however, is the positive effect it has on morale and staff retention within the organisation. Productivity and morale are generally higher at companies that are committed to a "promotion from within" philosophy. This lets employees know good performance will be rewarded. Showing staff your organisation offers advancement opportunities is one of the best ways of reducing turnover.

There are several issues to consider when recruiting from within your organisation. Keep in mind problems could arise when you interview and turn down somebody who has worked within the company for a long time. When this situation arises, assure the employee that while they

might not have been a match for this position, he or she is a person of ability and important to the company, and there may be other

opportunities in the future.

Another consideration is how to attract internal candidates. Other teams or departments might not be pleased if you approach members directly. Additionally, if only certain employees are approached, other staff may feel marginalised or that they have not been given an equal opportunity for advancement. One way to avoid this is to post job openings on an internal bulletin board or in company publications. Job posting has two benefits. It both increases the number of qualified candidates for the position and demonstrates to employees that management is serious about providing advancement opportunities to employees, a real boost for morale. It also gives employees a broader view of their career potential within the company.

When using job postings, you should formulate a policy for handling applications which protects employees who would rather their supervisors didn't find out they are looking at other opportunities.

There are disadvantages to hiring from within. External recruitment clearly broadens the search to a wider range of talent and skills. For critical positions, you may not want to limit your options. If you rely on only hiring from within, you run the risk of creating a company that is insular in its thinking. Recruiting from outside can bring in new ideas and new ways of thinking that re-invigorate an organisation.

In general, however, the advantages of hiring from within are plentiful in both increasing productivity and building employee morale.

Promotion of people who already work for you should be fundamental to your organisation's recruiting policy.

Susanna Coghlan is director of training at AAA Cambodia, a strategic human resources consulting firm operating in Cambodia and Southeast Asia.  For more information, email [email protected].