Stop Talking Yourself Out of the Internal Job
What If You're Not the Risky Candidate?
There's a version of this that plays out a few times a year. Someone I'm working with pulls up an internal posting, reads it twice, and finds a qualification they don’t have. Maybe they haven’t managed direct reports, or don’t have an MBA, or they don’t have experience owning P&L. They close the tab and tell me they'll go for the next one.
But wait! What if the person who gets that job instead of you is the expensive, unproven option, and you're the one the company would be lucky to promote?
In 2011, Wharton professor Matthew Bidwell published a study in Administrative Science Quarterly called “Paying More to Get Less: The Effects of External Hiring Versus Internal Mobility.” He worked from six years of personnel records inside an investment bank, comparing people hired from outside against people promoted from within into the same jobs.
The external hires were paid roughly 18 to 20% more. They received significantly lower performance ratings for their first two years. They left more often, both by choice and not by choice.
What's happening on the other side of that decision
Companies hire externally for all kinds of reasons. Sometimes there's a skillset absent from the team. Sometimes a new executive wants people they've worked with before. Sometimes a board has asked for change and change is easier to announce when it arrives with a stranger's name attached.
Those are all reasons to look outside. None of them are reasons to pass you over.
But the thing that works against internal candidates most often is something different from all those practicalities.. It’s their own confidence, or lack thereof. After all, the company knows your failures. They were there for the project that went sideways or the time you were stretched thin and it showed. The outside candidate arrives with a resume, a story they've polished, and none of that history.
That history feels like a liability from where you're sitting. From where they're sitting, it's the only real evidence in the room, and they'd rather have evidence than an unverified interview answer.
The hidden cost of not applying
You already know the obvious cost. You don't get the job.
The other cost is that if you don't raise your hand, the person doing the hiring fills in a reason, and the reason they come up with could be that you're content where you are. That's assumption could get carried into the next conversation about who's ready for what.
If I were preparing for an internal move:
One, start tracking your numbers and update your resume . Pull the before and after on anything you changed in the last three years. What it cost, what it saved, what stopped breaking. Collecting this data will save you time down the road.
Two, talk to the hiring manager before you apply. Internal candidates feel weird about this because they see the person in the hallway and it feels awkward to make it formal. Ask for fifteen minutes and ask what they're trying to fix with this role. You'll learn whether the qualification you're worried about is load-bearing or just something HR pasted in, and you'll be a name they've already pictured in the job.
Three, prepare like an outsider would. Internal candidates walk in assuming they don't have to research their own company, then get asked where the division is headed next year and answer from what they know about their own function. Review the last earnings call, the strategy deck from the town hall, whatever your company puts out. You'll sound like someone already thinking at the level of the job.
Source: Matthew Bidwell, “Paying More to Get Less: The Effects of External Hiring Versus Internal Mobility,” Administrative Science Quarterly, 2011. repository.upenn.edu/mgmt_papers/65