Why Companies Choose to Hire Externally for AI Roles

Current Trends in AI Hiring

As organizations navigate the evolving landscape of artificial intelligence (AI), a striking trend has emerged within human resources. A recent study by Careerminds highlights a discrepancy between the confidence HR leaders have in their own employees' ability to be trained for AI roles and the preference for hiring new talent from outside the organization.

HR's Confidence vs. External Hiring

The research, which surveyed over a thousand HR professionals and people managers in the U.S., found that a significant majority—92% of HR leaders and 88% of managerial staff—believe that their current workforce possesses the potential to be reskilled for AI roles.

However, the reality is quite different. More than half of HR professionals (51%) and nearly half of people managers (47%) are resorting to external recruitment for new AI roles, while only 42% state that they are redeploying existing employees to these positions.

“Companies are investing in AI while potentially overlooking one of their most valuable resources: the people they already employ,” said Mark Saddic, senior partner at Careerminds.

Challenges of Internal Reskilling

One of the major hurdles to internal reskilling lies in the limited visibility that HR departments often have into their employees' individual skill sets. This challenge affects 43% of HR professionals and 34% of people managers, making it difficult to identify suitable candidates for retraining initiatives.

For instance, organizations like Pearson, which recently acquired Workera—a platform specializing in AI-focused skills—recognize the need to address these skills gaps and facilitate reskilling.

Industry Variance in AI Responses

The study also reveals significant variations by industry in how organizations are handling the demand for AI roles. In tech and telecom sectors, external hiring rates exceed internal redeployment by 15%. Conversely, the media and entertainment industry shows a preference for internal mobility, with 56% of HR professionals in that sector opting to redeploy current employees rather than hiring externally, where only 25% pursue this route.

Cost of External vs. Internal Hiring

Hiring externally can carry substantial costs. Research indicated in Careerminds’ findings shows that bringing in new talent can be three to five times more expensive than promoting from within. Additionally, roles filled through external recruitment often take about 20 days longer to fill compared to those filled internally, highlighting the efficiency of developing existing talent.

The Path Forward

As the demand for AI expertise continues to rise, companies must rethink their hiring strategies. Instead of focusing solely on external candidates, organizations could reap substantial benefits by investing in their existing workforce. By developing employees’ skills in line with new technological advancements, businesses can boost efficiency, reduce costs, and foster a culture of continuous learning and growth.

This approach not only addresses immediate hiring challenges but also strengthens employee morale and retention by providing avenues for advancement and skill enhancement.