I would agree with your thoughts. I think that the fully loaded cost to hire externally, trian complete from the ground up, and put into circulation a new employee would be alot more expensive than it would be to promote from within. The numbers from my organization support that assumption.

On the surface, I agree with you both that the start up costs (including recruitment fees, training costs, and hiring bonuses) are much higher - not to mention that in-house candidates generally accept lower base salaries because of the convienence factor. However, thinking creatively, consider the type or level of position that you are recruiting for and the strategy for replacing the duties of the internal candidate that will be changing positions. In short - don't forget to factor in the "opportunity cost" of not getting the best person for the job or filling the vacated duties with an ineffective person as well. I was recently hired as a senior team staff for a large org and there were at least 3 excellent internal candidates. They wanted someone who could bring in new experiences and ideas and that is exactly what they got. They paid a premium to a placement agency, not to mention a higher salary and a significant hiring bonus and relocation fee. Within 8 weeks I have already implemented growth plans and cost reduction plans that will pay for this 4 times over within 12 months. One thing that they did do to stay on budget was to delay the hiring process 3 months but overall, they felt the risk and cost were worth it for this type of position.

Regarding the recruitment of (new to the company) RNs, our cost is $60,000 per new hire including all of the aforementioned costs. Retention of good to excellent RNs is a priority, and with the current nursing shortage and looming increase to a shortage of 800,000 RNs in the near future, keeping good to excellent RNs happy through turnover reduction methodologies is crucial to cost reduction. Promoting from within is a priority for our nursing staff - hiring outside nursing supervisor or nurse manager positions is rare.

I certainly don't disagree with the point that external recruiting incurs a higher/substantial expense to the organization, if limited to costs of recruiting, orientation and training. Of course it depends on the position being filled, but the intangible benefits of fresh ideas, alternate experiences and new energy infiltrating an organization that may have become stangant over time should also be considered. We are fortunate to have the University campus literally across the street from our hospital and we accept students routinely. We train these students to our practices and more times than not we hire into our organization, causing an imbreeding that has cemented our culture to what it is today. I feel very strongly that the balance between internal and external recruiting must be considered against the organization's strategic objectives and competitive environment to determine what that balance needs to be.

I agree that there most be a balance between internal and external recruiting, however, I would under most circumstances look for an internal candidate to fill a position. Through talent mapping or "growing your own" this can help groom talents in many current employees. That said, that does take dedication and work as well to groom employees for future opportunities, versus just hiring the expertise from someone else!

I agree that succession planning for management is extremely important. I work in a 40 bed hospital where there is little opportunity for advancement. Unfortunately what I have seen over the 19 years that I have been there is the fulfillment of the Peter Principle. Clinicians are promoted to management positions because they are good clinicians with the idea of being able to retain employees but they do not have the skill set established to do the management job. The cost of developing managerial skills can be extremely costly if the supervisor / manager makes poor HR decisions