Recognizing that the best candidate for an open position might already work for the company, employers regularly dip into their own talent pool to fill jobs. In fact, hiring from within—or matching the right workers with the right positions—is widely viewed as an effective way to enhance an organization’s human capital. But because the process results in rejections, the downside is employee turnover.

“Let’s face it, people prefer being hired to being rejected,” said JR Keller of Cornell University. “Posting jobs internally will increase an organization’s talent, but there’s a negative effect that offsets the positive: People will leave.”

Keller wrote the Academy of Management Journal article, “Turned Down and Taking Off? Rejection and Turnover in Internal Talent Markets,” with Kathryn Dlugos, also of Cornell. Curious to learn more about the effects internal rejections have in an organization, Keller and Dlugos analyzed more than 9,000 internal rejections over a five-year period at a large U.S. health-services organization. They found that 14% of rejected internal candidates left the company, triple the corporation’s normal exit rate.

Read more at AOM Insights