According to Wharton management professor Matthew Bidwell, external hires are initially paid 18% to 20% more than the promoted workers. It also seems they have higher levels of experience and education and have higher exit rates. This would mean that a recruitment strategy based on seductive higher salaries is efficient to attract brains and does not generate loyalty.
On top of that, those newcomers get significantly lower performance evaluations for their first two years on the job than do their colleagues who are promoted into similar functions.
Consequently we could also conclude that professionals are often taken for granted by their own organizations. Not really motivating, isn’t it? From a more dynamic perspective, we would conclude that – whatever the career plan you may have – it is important to cultivate a strong external reputation so that you can leverage opportunities when you want.
Sources: knowledge.wharton.upenn.edu, journals.sagepub.com, hbr.org