Why rejection stings so hard for internal job applicants

Only one will be chosen from a strong pool of applicants.
Only one will be chosen from a strong pool of applicants.
Image: Reuters/Tom Jacobs
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A little-known fact about King Lear is that many of its monologues double perfectly as speeches to recite in the mirror when you’ve just been passed over for a promotion. Consider one famous scene in which Edmund, born out of wedlock, compares the injustice of the way he’s treated compared to his legitimate half-brother:

Why bastard? wherefore base?

When my dimensions are as well compact,

My mind as generous, and my shape as true,

As honest madam’s issue?

The modern-day version of this conundrum is why smug Robert from sales got the job and not you. What does he have that you don’t?

An emotional response worthy of Shakespeare is pretty common when internal applicants are denied a promotion. “There’s a feeling that the psychological contract has been broken,” says Kathryn Dlugos, an assistant professor of human resource management at Pennsylvania State University. The spurned candidate is probably thinking something like, “If I’m not moving up with my current employer, why not? They owed me.”

Such feelings of betrayal may dissipate over time. But what happens next is bad news for employers: Rejected internal applicants often decide to quit. “The risk that they might leave is actually very high,” says Dlugos. “And the cost of replacing those people and needing to train and develop them can be very substantial.”

On average, companies receive 7 to 10 internal applications for every job they post. So what can they do to mitigate the risk that they’ll lose valuable employees who, for whatever reason, weren’t the lucky person chosen for the role?

In a recent paper published in the Academy of Management Journal, Dlugos and her co-author, JR Keller, an assistant professor of human resource studies at Cornell, offer several suggestions about how to navigate the sensitive matter of rejecting internal candidates.

Rejected internal job candidates are more likely to quit

To analyze the flight risk of rejected internal applicants, Dlugos and Keller, over the course of five years, tracked more than 9,000 employees who’d been turned down for a new role at a large US health services company. They found that the turnover rate for the rejected internal job candidates was 14%, compared to the company’s overall turnover rate of 4% during that period.

These people were typically not quitting out of spite. Rather, they interpreted the rejection as a sign they wouldn’t be able to move up at the company in the future. “Employees are motivated to remain with firms when they believe their performance and loyalty will provide opportunities to advance their careers internally by taking on jobs with more responsibility and higher pay, and the motivating power of internal mobility is limited when employees doubt they will have such opportunities,” Dlugos and Keller write. In other words, if they don’t have a shot at rising through the ranks at a company, employees figure, it’s time to start looking elsewhere.

The importance of the interview process

The study found that rejected internal applicants were less likely to leave under two conditions. The first was whether they had made it to an interview with a hiring manager. If they had, they were 1.4 times less likely to quit.

“We typically think if people are rejected farther along in the process, it might be much more negative because there’s this sense of, I’ve been strung along a little bit,” Dlugos says. That may be true for external candidates. But for internal candidates, getting to the hiring manager interview stage sends a signal that they’re well-qualified—so even if they don’t get this particular role, there may be similar opportunities down the line.

The interview itself may also provide useful information for internal applicants. “They actually are talking to the hiring manager about their skills and what their qualifications are, and then potentially getting feedback on how they’re doing in that interview and how they might do while looking for a future job,” Dlugos says. That kind of exchange can leave even rejected internal candidates feeling as if they’ve benefitted from the application process, and more hopeful about being successful in the future.

What internal job applicants think of external hires

Rejected internal applicants also pay a lot of attention to whether the job goes to another internal candidate or an external one. If a co-worker beats them out for a role, they’re 1.2 times less likely to leave, Dlugos and Keller find. The logic goes something like, Well, clearly the company gives extra consideration to internal candidates, and maybe it’ll be my turn next time.

If the job goes to an outsider, on the other hand, internal applicants may conclude that they’ll always be up against too much external and internal competition to have a decent chance of advancing.

The art of a helpful rejection

While it may be helpful for employers to realize the factors that can push employees out the door, it’s not necessarily practical for hiring managers to interview every internal applicant, or for companies to eschew external candidates. But there are things companies can do to make internal applicants feel valued and confident that there will be more opportunities for them to pursue if they stick around.

Dlugos recommends that employers review the pool of internal candidates and take note of any high performers. “In some cases, even if that candidate is not the perfect fit for the job, it can be useful to interview them so you can have the conversation about what other jobs might be better fit moving forward,” she says. After the hiring decision has been made, it also can be helpful to follow up with rejected internal candidates and talk about future possibilities.

As for any employees who feel uncertain about their prospects after getting turned down for a new role, don’t be afraid to reach out to the hiring manager (and perhaps your current manager as well) to discuss the thinking behind this particular rejection and how you might be qualified for other jobs. Companies should be motivated to keep good employees happy—and if they’re not, it may indeed be a sign that it’s time for you to move on.