Key Statistics: Internal vs External Hiring

Internal Promotion vs External Hiring Percentages

General Operations/Management Roles:

• 41% of companies plan to fill more than 30% of their open roles with internal talent (LinkedIn 2024 Workplace Learning Report)
• Internal mobility has surged by 20% over the past two years (LinkedIn 2024 Global Talent Trends Report)
• 69% of employers say external hiring is essential for bringing in critical new skills, especially in tech and transformation roles

Manufacturing Sector Specific:

• Manufacturing organizations achieved only 36% of their hiring goals in 2024, down from 44% in 2022-2023
• 55% of manufacturing organizations reported increased time-to-hire in 2024
• The sector faces significant challenges retaining top talent, making internal development increasingly critical

Performance and Retention Comparisons

Ramp-Up Time Differences

• Internal hires reach competency 20% faster than external hires (LinkedIn 2024 Workplace Learning Report)
• New external hires operate at only 25% productivity in their first month and may take three months or more to reach full performance
• Internal hires have "faster ramp-up time and fewer onboarding headaches" due to existing company knowledge

Retention Rates

• Companies that excel at internal mobility see twice the retention rate compared to those that don't (LinkedIn 2024 Global Talent Trends Report)
• 93% of employees stay at a company longer if it invested in their career development
• Employees who make an internal move are 40% more likely to stay at least three years
• Organizations with strong internal mobility programs see 53% longer employee tenure on average

Executive-Level Success Rates

• Internal CEO hires have tenures that are on average 1.2 years longer than external CEO hires (Russell Reynolds Global CEO Turnover Index)
• External hires are 61% more likely to be terminated than internal ones

Cost Analysis: Internal vs External Hiring

Direct Cost Differences

• External hires are 18-20% more expensive than internal hires, factoring in job advertising, recruiting agency fees, relocation expenses, and onboarding time
• External recruitment costs are typically 1.5x to 2x more than internal promotions, including sourcing, background checks, and time-to-fill
• Average cost per hire across all industries: $4,700 (SHRM 2024 benchmarking data)

Industry-Specific Cost Considerations

Manufacturing:

• Manufacturing faces 3% unemployment rate (lowest in decades), driving up external hiring costs
• Average time-to-fill: 44 days across industries, with manufacturing experiencing increases

Operations/Leadership Roles:

• Executive roles often exceed $28,000 in hiring costs
• High-demand roles cost $6,000-$12,000+ to fill

Continuous Improvement Specific Insights

Skills Gap and Talent Scarcity

• Only 37% of organizations report having adequate CI talent to meet their strategic goals
• 68% of executives cite a lack of skilled CI professionals as a major challenge
• The Lean and Six Sigma services market is projected to reach $4.3 billion by 2030, indicating growing demand for CI expertise

Promotion Trends in Manufacturing

• Companies planning to promote only 8% of employees in 2024 with average pay adjustments of 9.2% for single-level promotions
• Lean Six Sigma certification increasingly tied to promotion opportunities in manufacturing, with 40% of top management bonuses tied to Six Sigma goals at leading companies

Key Recommendations Based on Data

For Organizations:

1. Prioritize Internal Development: Given the 2x retention rate advantage and 20% faster competency achievement
2. Cost Optimization: Internal promotions offer 18-20% cost savings over external hiring
3. Hybrid Approach: Use the 69% external hiring statistic strategically for new skills while developing core CI talent internally

For CI Coaching Programs:

1. Target Internal Candidates: Focus on developing existing talent for CI leadership roles
2. Emphasize Quick ROI: Highlight the 20% faster ramp-up time for internal promotions
3. Industry-Specific Messaging: Manufacturing shows particular challenges with external hiring success

Sources and Methodology

Primary Sources:

• LinkedIn 2024 Workplace Learning Report
• LinkedIn 2024 Global Talent Trends Report
• SHRM 2024 Talent Trends Research
• PeopleScout 2024 Talent Trends Review
• Russell Reynolds Global CEO Turnover Index
• GoodTime 2025 Manufacturing Hiring Insights

Data Collection Period: 2024 surveys and reports Sample Sizes: Varies by study, ranging from 1,000+ talent professionals (LinkedIn) to industry-specific datasets

This research demonstrates a clear trend toward internal mobility and development, particularly for operations and CI leadership roles, driven by cost efficiency, faster performance, and significantly better retention outcomes.