Why do many firms have a policy of giving first consideration to their own employees?

The reason for preferring internal employees are

- Cost benefits

- Employee Motivation

Explanation:

There are cost benefits associated with promoting the internal employees

1. Saving the job advertisement and hiring process costs: In case of internal hiring, the job is not posted on external platforms thus saving the cost.

2. Internal hiring requires to give less raise than hiring someone from external organization: Please switch organization with higher salaries and external market rate is always higher than internal promotion cost.

Employee motivation is another factor that promoted internal hiring. People know their career paths and promotion chances so they are motivated to work hard. If these opportunities are given to external personnel, current employees lose their job satisfaction.

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