Internally promoted employees are far less likely to quit during times of crisis

Following from the impact of his work on outlining the ‘Great Resignation’, UCL School of Management Professor Anthony Klotz has continued to explore the effect of global shocks on employee behaviour. 

In his latest paper, Dr Klotz explores the conflicting perspectives of promoting people internally versus hiring external candidates and examines whether promotion reduces subsequent quitting or if it instead increases the employee’s own employability and therefore inadvertently increases the likelihood of them leaving the organisation. 

Co-written with leading academics from the University of Wyoming and Oregon State University, and software company Modern Hire, the researchers challenge commonly held beliefs that promoting employees increases their likelihood of leaving and argues instead that promoting employees from within doesn’t just retain talent but can dramatically reduce turnover, particularly when external opportunities surge.

Utilising the unique scenario of a weak job market (caused by the global COVID-19 pandemic and the Great Resignation) being immediately followed by a job market surge, the researchers analysed data from more than 11,000 restaurant managers hired or promoted between 2018 and 2023. 

During the Great Resignation, externally hired managers were found to be nearly four times more likely to quit within six months compared to those promoted internally. 

A follow-up experiment by the researchers mirrored these conditions and revealed that internally sourced employees felt less threatened by job insecurity and more supported by their organisation during crisis periods. 

The research also found that internally sourced managers were rated more positively by their superiors, received fewer customer complaints, generated more weekly sales, and had lower rates of subordinate turnover than their externally hired counterparts

The findings, also published in an article in HBR, challenge the assumption that promotions simply make employees more marketable. Instead, they show that internal mobility signals loyalty and stability, powerful drivers of retention when job markets favour employees.

Speaking about the research, Dr Klotz said:

“As economic shocks become more frequent, from pandemics to technological disruptions, understanding how employees interpret organisational responses is critical. This research underscores that retention is not just about filling roles, it is about shaping perceptions. 

In an era of heightened mobility, organisations that champion internal growth will be better positioned to weather the next storm.”

With the UK job market weaking in 2025, much like the market state of when the studies were taken, Dr Klotz’s findings may prove particularly relevant for today. 

After Shocks: The Effects of Internal Sourcing on Voluntary Turnover in Journal of Applied Psychology