Internal and External Hiring

Jed DeVaro, Antti Kauhanen () and Nelli Valmari

ILR Review, 2019, vol. 72, issue 4, 981-1008

Abstract: Using large-scale, linked, employer–employee, Finnish panel data, the authors examine firms’ internal versus external hiring decisions more comprehensively than has prior literature. The results show that vacancies in job hierarchies are filled more often by horizontal moves than by promotions. Most horizontal moves are external and within the same job functions, so that internally promoted workers face external competitors occupying higher job levels. Compared to internally promoted workers, external and internal horizontal hires have stronger observable ability indicators (e.g., education, experience, prior work history) but weaker job performance in the year preceding the transfer. Internal and external horizontal hires have similar job histories.

Keywords: internal hiring; external recruitment; promotions; lateral moves; work history; job assignments; turnover (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:72:y:2019:i:4:p:981-1008

DOI: 10.1177/0019793919842810

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