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If you begin to start worrying about 'outsiders being paid more than you' it may be time to move on to greener pastures. Loyalty to a single organization and counting on them for your 'daily bread' for a full working career has proven to be pretty risky business.

Perhaps as professionals we need to be concerned about developing skill and competency that has broader appeal in the marketplace. Again and again we see some very good and talented people 'passed by' for career growth they expected to realize because they somehow committed to a single organization. Mobility and flexibility might be the way to ensure a career meets your goals.

I think there is something psychological at work too. Sometimes management gets all "dewy-eyed" over someone from the outside whom they fantasize is the ideal employee. Then they look at their insider who is far from their ideal. Reality just isn't as pretty as fantasy.

You also have to look at the total rewards package. Is the outsider giving up vacation? Loss of company match in the 401k plan? What is their eligibility for benefits, bonus, etc in the new company? Are there waiting periods? Are their relocation expenses fully reimbursed? They may also be giving up an established reputation from the old company that will benefit their career there, that will have to be re-earned in the new one.

Thus, there is some justification for the higher pay in some circumstances.

Simple. Insiders have been observed making a mistake at some time. Outsiders have pristine resumes. Besides, the ones with the most glowing references, blessed by the most influential members of the hiring committee, arrive with the halo effect in full force.

Promoting the internal candidate can bring great criticism. Everyone knows they are imperfect. But no one challenge a final decision to select that perfect well-vetted outsider, especially if they arrive with the higher pay that is a self-fulfilling justification. Those who endorse and approve the outsider's hire have a vested interest in their higher valuation.

My own experience has been that when Mr/Ms Inside is 80+% of what we need, Mr/Ms Inside gets the opportunity. Obviously, YMMV

Just realized, Tony, that my old piece about recruiters ignoring "overqualified applicants" just republished as a "classic" today dovetails nicely with this article of Chuck's.

While an 80% perfect internal candidate might indeed get the nod (and I completely agree that they almost always prove much better than expected), an external candidate with over ~125% of the ideal qualifications might get snubbed for many reasons. Hiring managers might obsess over be a relative narrow "ideal candidate" band.

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