There would indeed be little incentive for a lot of businesses (specifically IT but also others). There are, however, other industries where this sort of career

There would indeed be little incentive for a lot of businesses (specifically IT but also others). There are, however, other industries where this sort of career path already exists and with less rework could implement an "open-hire" program. Edit: I didn't really address your question. While there would be little incentive, there would not be none. For instance a better public image (like being an equal opportunity employer, but even more so) I believe they would end up with a more loyal workforce (but this is debatable and even if true it would be difficult to quantify) but... They might also upset existing employees who were hired under a more traditional process There would be less incentive to pursue higher education if this were common practice In short...I am tempted to look for a way to make it work, but also torn because I know that the needs of the business take a backseat to philosophical ideals. I do, however, believe that this could be implemented in certain industries and be a net-benefit to all