More managers choosing internal job candidates for new positions
Internal job candidates with inferior skills to external candidates stand a better chance of being selected for an available position because they tend to work harder before a hiring decision.
According to a study led by Eric Chan, Assistant Professor of Accounting at the McCombs School of Business, employees are motivated to enhance their chances of promotion by increasing their effort when a new job opportunity arises. Perhaps driven by a sense of familiarity, managers are also more likely to display a preference for internal candidates, even when external candidates possess higher skills.
Furthermore, the study revealed that employees who secured promotions through internal channels continue to exhibit increased effort even after being promoted, without immediate financial incentives. This sustainable effort can be attributed to a sense of gratitude towards the manager for providing the opportunity.
The study highlighted significant findings that establish a strong correlation between effort and promotion. Overall, employee efforts increased up to 51% and peak just before the final hiring decision. Managers demonstrated a preference for internal candidates, choosing to promote them in 54% of the cases examined.
Notably, promoted employees exhibited an average effort level that was 18% higher compared to those who were not promoted, and even after the promotion decision was made, employees’ effort levels declined by only 8%. Even when statistical noise was introduced to obscure effort levels, managers remained 26% more likely to select internal candidates over external candidates.