Extant staffing literature suggests that internally promoted candidates tend to yield greater performance outcomes than external hires. However, these findings are generally based on research designs that do not consider multilevel and temporal effects. The current study advances literature in this area by integrating prior research to develop a computational model that examines the impact of hiring externally vs. promoting internally on organizational competencies over time, across organizational levels and structures, and at different levels of organizational investment into employee skill acquisition. Results from virtual experiments suggest a cross-over interaction such that internal hires yield initial greater competency levels, but external hires yield greater competency levels in the long-run. Additionally, these results seem to hold at both the individual contributor and managerial levels. However, these results are contingent on the amount of headcount concentrated at a given level. Specifically, the long-term benefits of hiring externally are most apparent at levels of the organization where headcount is highly concentrated. Interestingly, investment in skill acquisition seems to exacerbate the benefits of hiring external hires over time. Together, these results have implications for staffing practices across different job levels and organizational structures.
Read
