Small businesses that recruit from within their own employee ranks by promotions and lateral assignments help keep morale and motivation levels high. And, assuming that the internal search is successful, employers don’t need to worry about staff members fitting into the corporate culture. They already know the territory.

The drawbacks? The most obvious one is that restricting a search to internal candidates limits the pool to choose from, and organizations may end up hiring someone who’s not up to the challenge of the job. The second drawback is that, whenever small businesses recruit from within, they run the risk that other important and valuable employees who don’t get the job become resentful and may eventually decide to quit.

Your only real defense against these problems is to be forewarned about them, and to go out of your way to ensure that everyone understands the scope and basic duties of the job and hiring criteria you’re using. You also must ensure that, whatever system you use to alert employees to job opportunities in the company, everyone gets a fair shot at vying for them.