When Is It Time to Consider an External Candidate?

One of the key strengths of succession planning is that it helps to develop talent that already exists within your company. This means that when more senior positions become vacant, there is a qualified candidate ready and willing to step into the role. There are numerous benefits to being able to fill positions internally. Examples include lower cost, less time in lost productivity as the candidate acclimates to the new role, reduced turnover, and better fit within the company’s culture.

However, it is unrealistic to expect that an organization will be able to fill all its positions from within. Deciding when to hire external candidates versus promoting from within sometimes gets framed as the build or buy dilemma. For any company to be successful in today’s competitive markets, it is important to leverage both. Therefore, deciding when to build and when to buy is an important choice that organizations should carefully consider.

Here are some situations where there may be an advantage to hiring externally:

external candidates

Finding the right balance between hiring internal versus external candidates can take time. Some sources advocate for an internal hiring rate around 30%, but some large organizations report rates closer to 40-60%[1]. Finding the ratio that is right for you will depend on your company’s unique needs. If you have a formal succession plan in place, you should have a fairly good sense of those positions you can comfortably fill internally.

As a general rule, before considering an external candidate, we recommend taking stock of your current talent pool. If you had to get by without hiring externally, could you? What would that look like? Is there anything you could do with your available time to develop someone on your bench to be ready for the role? In short, if you’ve thoroughly considered your internal options and none provides a sufficient solution, then it may be time to consider an external candidate. If you do, be sure to consider how you can integrate your hiring practices with your succession plan to get the most out of this process.

How SIGMA Can Help

At SIGMA, we want to help your company develop your potential. Our experienced consultants can help you manage performance in your company with our custom Succession Plans. Visit our Launch Series page to discover how we can deliver your personalized Succession Plan in just 30 days. We also offer long-term consulting services to help you navigate difficult succession planning situations. Contact us for more information on our succession planning offerings.


[1] Krell, E. (2015, Jan 7). Weighing internal vs. external hires. Retrieved from https://www.shrm.org/hr-today/news/hr-magazine/pages/010215-hiring.aspx.