If a company sees the need to take in DEC it is likely to be a case of either just not enough SIM time available for a LHS to RHS conversion to meet contractual requirements of qualified pilots on site, a very short term situation, a more or less one-off thing, or they simply don't have the necessary number of licenced/type/hours and suitability qualified FOs for upgrade. It is cheaper to promote from within than to employ DEC if you have the required material to start with.
You could well be right. However the situation in the UK (apologies if you're in the UK, your location suggests Australia) is that there is more work than capacity, Captains are retiring and you need 2 crew to operate offshore on the kind of things Bristow is doing - the FO is just as much required as the Captain. So promoting an FO here doesn't meet the need of hiring additional pilots and getting the aircraft flying.
Looking at the requirements in the job ad, you need 1500PiC multi-engine helicopters to apply. I imagine this same requirement is true for internal applicants.
So the question is how do you get your FOs to 1500 ME PiC - the lowest hour guys might have only around 100 hours PiC on singles. Those who've gone the instructor route probably tried to get to 1000 hours total meaning they might have 800 PiC hours again on singles. A few will have done other types of flying (police, HEMS etc) and meet the requirements, but many won't (in fact I suspect even people direct out of Mil. won't have the hours they're asking for).
Anyway, regardless of that - if the company has no mechanism to get the FOs the hours to meet command requirements, then the FOs are stuck. The company can either change their procedures such that there is a mechanism in place to get FOs to command - this takes time, effort and 1500 ME hour building from somewhere - or just leave things as they are, point out to BALPA that none of the FOs meet the reqs and start looking for DE captains.
I don't know whether this is good/bad or indifferent - but if you've been sucessfully flying for a company for many years as an FO and still cannot meet the requirements to apply for a command job, while others are hired in to fill the holes.... well something seems odd about that.
As I said, maybe it's just poor management but the cynical part of me feels that maybe there is no incentive for the company to progress FOs if they can (try to) get DECs from outside. I imagine there are FOs who'd like the opportunity but don't meet the requirements and as it stands have no way of ever meeting the requirements. Too bad for them I guess.
BG.