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Companies Ambivalent on Hiring from Within


Contact:Phil Ryan

NEW YORK 2/3/2015

Only one-third of companies focus on developing and retaining current employees rather than recruiting from outside, according to a survey of more than 1,200 executives and managers by American Management Association (AMA), a world leader in talent development.

Instead, a majority of organizations have no prevailing policy on recruitment, saying that shifting business needs determine whether to fill a position externally or internally. Moreover, 11% acknowledge that they make little effort whatsoever to retain workers and instead recruit aggressively.
In recent years, does your organization prefer to recruit new employees rather than retain and develop existing ones?
We have no overriding preference, but act according
to shifting business needs
We focus on developing and retaining our current
We expect high turnover and recruit aggressively   11%
(Source: “Is Employee Loyalty Still Valued?” by AMA, 2014.)

“With only 34% of organizations committed to developing and retaining employees it’s easy to see why employee loyalty has declined,” said Sam Davis, Vice President for AMA’s customized consulting solutions. “The same survey found that 52% of companies report their employees are less loyal than five years ago. So many companies seem to discount internal candidates and just call a recruiter to fill an opening. But this sends an unfortunate signal to employees, who are usually eager for promotion and advancement.”

In certain situations external recruitment is unavoidable, conceded Davis. “Sometimes there are skills gaps where no internal candidate is the right fit or when an infusion of outside expertise is sought. Nevertheless, management should at least explore the talent that’s on board before searching outside.”  

Nearly all large organizations, Davis observed, have a management succession plan in place, one that’s updated on a regular basis. “HR puts a priority on building bench strength, only to have top management call for a search for someone from outside…happens all the time.”

Organizations need to have a coherent and authentic talent management program, advised Davis. “At its core providing opportunities for employees to learn and grow will encourage engagement. Employees should have a clear line of sight for future advancement. A strong management bench that’s relied on to fill openings demonstrates that existing talent is valued at least as much as new talent.”

The survey was completed December 1 and respondents consisted of 1,213 senior-level business, human resources, management professionals and employees drawn from the AMA database of contacts.

About American Management Association International (www.amanet.org)
For over 90 years American Management Association International (AMA) has been a world leader in professional development. AMA supports the goals of individuals, organizations and government agencies with a complete range of corporate talent transformation solutions, including public open-enrollment seminars and onsite group training, with both live and online learning capabilities. In addition, an extensive variety of resources are available through AMA, including webcasts, webinars, podcasts, business books and industry research. Organizations worldwide, including 90% of the Fortune 500, turn to AMA as their trusted partner.