The benefits of having women on your team are clear. Data shows they bring higher profits and a more inclusive work environment is better for everyone, male or female. Women have traits that a younger workforce finds appealing in leadership and women bring high value in communication skills and intellectualism to their teams.
While these facts might inspire your HR department to increase its efforts in finding and retaining new female talent (which is good and well), you might be overlooking a more readily available talent pool in the process. Internal female hires could bring even more benefits to your team than external female hires; here’s how.
Promoting from within is often more profitable.
Promoting from within is generally a better choice for many teams regardless of if you’re looking at male or female hires.
External hires often receive a higher salary, up to 18 percent more than internal hires in the same jobs, but receive lower marks in performance reviews for the first two years on the job. One study showed external hires were 61 percent more likely to be fired from their new jobs than internal hires.
Conversely, the internal hiring process is often quicker and more affordable and your internal hires already have in-depth knowledge of your company, brand and other employees.
The benefits of internal hires and downsides of external hires are particularly true when it comes to hiring for managerial and leadership positions, according to a study by the Journal of Applied Psychology.
Related: The Optimistic Future
Promoting women from within adds a gender equity component to your hiring process.
Looking especially at hiring women from within your company, however, adds a new gender equity component to your hiring process, one that you may be missing.
In the midst of a labor shortage, American women are falling out of the workforce through what is called the “leaky pipeline.” Even though women represent 51 percent of the entry-level workforce, they only represent 21 percent of top executives. Men are promoted internally at 30-percent greater rates than women.
Women recognize an inability to move upward in their careers in many cases and take their opportunities elsewhere. Hiring qualified females from within is one effort we can make to mend this leaky pipeline and ensure talented women stay in the workforce.
Women remaining in the workforce and receiving internal promotions not only leads to a reduced labor shortage that impacts every business in every country, it increases profitability as well. Women in management leads to a 19-percent higher return on equity and 9-percent higher dividend payments. Additionally, increase in corporate leadership to 30-percent female share is associated with a 1-percent increase in net margin, which translates to a 15-percent increase in profitability for a typical firm.
How can you ensure you’re hiring the best talent from within?
Just as unconscious bias exists in the external hiring process, unconscious bias can impact your internal hiring processes as well.
Look at the Data
When promoting from within, look at your candidates’ qualifications, not necessarily the candidates themselves. Who brings the most skills to the table? What does past work performance look like? Examine your company’s KPIs and make hiring decisions based on the facts and data, not a subjective evaluation. Not only will you reduce gender inequity from your hiring processes, but studies show leaders who make data-driven decisions are more likely to achieve better performance outcomes from their teams.
Find the data easily and efficiently, with Pipeline.
Eliminating bias from your hiring process, though much easier said than done, is still infinitely easier than it would have been even a few decades ago. Thanks to analytical tools and big data, we can take a definitive look at where inequity actually exists within a company’s internal hiring processes and make concrete steps to eliminate it.
This is what the Pipeline platform does, as it gathers your internal data, looks at your current state and recommends a prescription for bringing your company to a state of true gender equity. Want to see how it works? Schedule a free demo, now.