Why Will You Hire an Outsider rather than an Internal Candidate?



Who knew that hiring realities and a trip to my home state of Oregon would intersect.

But they did.

You know the deal. You’ve got a candidate or two from inside the firm to consider and candidates from outside that are in the vetting / interview hopper for the job.

You end up – surprise surprise – hiring the outsider. Only later do you come across the statistic from the Center for Creative Leadership that approximately 66% of senior execs hired from the outside fail within 18 months and that the overall failure rate for external hires within 3 years is 40%.

So two or more search fees – likely pricey – and some internal talent that’s moved on to someplace where they feel loved, you’re forced into a little introspection. And by the way you’ve got lots of company; boards of directors hire the outsider – only to regret it later – all the time.

Why do you love the devil you don’t know (that outsider) rather than the devil (those insiders) that you do?

So back to Oregon, the state in which I grew up in, and how it shows you why you hire outsiders, not always the well qualified insiders.

It’s hard to visit Oregon and not be awed by its staggering beauty; verdant green on the coast and in the Willamette Valley, sparse high desert in the thinly populated central and eastern parts of the state. The locals are really special; polite to a fault (just try to have them take their earned right of way on the road), and many have roots deep in the state, having likely lived in Oregon much of their life. The state has also managed its development since the 1970’s in a planned, thoughtful way – every city and county has to develop a real land use plan and generally stick to it. No LA-type sprawl for this state.

So how is Oregon like those insider candidates you’ll pass by?

After you’ve been in Oregon for a while you realize that the reason it’s so green in parts of the state is that it rains; a lot. The wet stuff comes down at something like 45 inches a year in the Willamette Valley and up to 120 inches a year in some spots. People in Oregon don’t age so much as they rust away. And that beauty of the central and eastern parts of the state? It’s isolated; not the type of place you want to have your car break down if you’ve got any sense of imagination unless your favorite song is the tune of Dueling Banjos from Deliverance.

And those polite locals? They’re pokey – slow takes on a new meaning on the highways. And while it’s great that they’ve stayed local, their worldview of “back east” can mean Idaho. Worldly is not a word describing many Oregonians – tho’ since the state is not very ethnically diverse, “white” could be a word to describe most Oregonian. And last, that planned development approach they’ve taken? What you want to do with that 40 acres you bought out in the country to get away from it all may not be up to you – the land use plan may dictate what you can do.

So while perhaps humorous (self-disclosure: while I like living in San Francisco, I’d move to Portland in a heartbeat if I had to live someplace else) the issue of candidates you don’t know is that you don’t know their flaws as nearly as well as their perceived strengths.

And those internal candidates? You’ve come to take for granted their strengths, and frankly their flaws that you know all to well have come to annoy you.

Cut to the chase?

If you’ve done a decent job of development, coaching, and training of your internal candidates they are in many, many cases much stronger fits for roles with a firm than outsiders. That doesn’t mean never hire someone from the outside; just know that the likelihood of success is far higher with qualified internals than it is with qualified external hires.

Life Back West is an occasional set of writings focused on ways people, teams and organizations can be both more effective (doing the right thing) and more efficient (doing the right thing well). More about executive, career and team / leadership coaching services can be found at the “About J. Mike Smith and Back West, Inc.” sidebar or the “Hire Me” tab above. You can also read an online interview with me at WhoHub, as well as participate in my learning community courtesy of KnowledgeCrush.


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