Promote internal vs lateral hire

Advantages of promoting internally:
 
I’m a huge advocate of promoting internally; after all, internal promotions have got me to where I am today. I personally prefer this method because it means I can walk into the new role feeling fully competent and confident about the company structure and processes. However there are many more benefits to this method of team building:

• Better business understanding
• Rewarding loyalty -  Rewarding high-performing employees from within your business demonstrates that you care about their career progression. They are, as a result, likely to remain loyal to the business for a while yet. In fact, a recent study has found that those promoted externally are 21% more likely to leave the business compared to the more loyal, internal hires.
• Cost and time effective

Advantages of hiring externally
Perhaps the biggest benefit of recruiting externally is all the new and varied perspectives

By hiring externally you are giving yourself access to a far larger talent pool, which is particularly important if you are looking for specific skills. A popular approach is to first look within the business for employees with the relevant skills and then, failing that, to broaden your search to include people outside of the company.

•  New perspectives and ideas - Perhaps the biggest benefit of recruiting externally is all the new and varied perspectives that you are bringing into your business. Each new hire will have accrued a particular set of skills and expertise from their previous employer, and it’s by combining all of these that you can repeatedly come to the best and most efficient practices.   
• A competitive advantage -   Following on from the first point, hiring team members from competitors helps to provide you with some perspective on how effective your strategy really is. It’s easy in a familiar team to become insular, believing that, as a market-leader, you have nothing to learn from your rivals. You may find, however, that someone else has a smarter and more cost-effective means of doing something. And if they don’t, it’s reaffirming to know that your business processes are the most efficient and streamlined out there.
• Increased diversity - The multiple benefits of increased diversity is something that Hays recognises and is passionate about. If you’re unfamiliar with the business benefits of diversity then have a read of this Viewpoint blog. Diversity can strengthen a business from both within (e.g. gender diverse companies are 15% more likely to outperform their less diverse counterparts) and externally (mirroring the diversity of your customer base helps you to better understand and meet their needs).