There is no correct answer to whether you should be hiring new applicants or promoting from within the company to fill open positions. There are pros and cons to each hiring technique, so employers and human resource managers need to carefully consider what they need before deciding on one applicant pool or another.
Accepting new applicants is beneficial when your company is expanding. If your company does not have any qualified candidate, filling a position from within the company would be a waste of time, resources, and effort. You can hire new graduates with fresh ideas who are ready for training, or you can hire mature applicants who bring a wide variety of skills and experience. New applicants are also great for infusing new talent and energy into a company that may be stagnating. According to HR Zone, “organizations that use employment agencies are more often guaranteed to receive only the best and skilled applicants.”
Promoting from inside a company is usually quicker and more affordable than hiring new applicants, since it cuts out the need to spend on job advertising. Applicants who already work for the company generally require less assessment and testing, since employers already have the additional insight of performance evaluations and referrals. When hiring within a company, employers know which of the candidates comes in late, who successfully completes projects on time, who gets along with their coworkers, etc. Your candidate will already know about the company and the company culture, and are unlikely to be entertaining other external offers. Promoting within a company draws from a ready pool of applicants who have already shown their skills and ability. Allowing growth within a company also shows employees that loyalty and quality work is rewarded with job security.
The bottom line is, no method is completely correct. There are great reasons to hire both outside applicants as well as current employees, so HR managers should hire based on where the best applicants are for what the company needs.