Why You Should Promote From Within Before You Hire Externally

by Greg DePersio

3 min read

As your small business grows, it becomes increasingly difficult to take on all the duties of running the business yourself. At some point, you face decisions about installing people in management roles to oversee responsibilities that otherwise fell on your shoulders. Conducting this search outside the company’s current workforce offers some advantages, such as giving you a broader talent pool to tap into and allowing you to poach talent from top competitors. However, you may want to consider promoting from within before you hire externally. Elevating current employees to management roles is less expensive, boosts team morale, offers easier transitions, and helps the company in future recruiting efforts.

Less Expensive

Recruiting, hiring, and training a new employee isn’t cheap. Advertising the position and screening applicants cost time and money. You or your HR department have to conduct interviews. Once you settle on a candidate, you’ll probably want to conduct a background check to minimize risk. When you finally welcome the new hire aboard, you have to train them before they start working. Hiring for leadership positions is even more expensive and time-consuming. The recruitment process is more selective, the interviews are more extensive, the background checks are more expansive, and more training is required. Promoting from within lets you bypass a few of these steps – or at least reduce their scope substantially. You don’t have to advertise the position other than internally, which costs nothing. The interview process is also much simpler. If you promote from within, the candidate has already undergone a background check and has also been trained on general company protocol.

Boosts Team Morale

Employees don’t like seeing someone just walk in off the street and immediately assume a position of authority over them. Even if the new manager is highly qualified, it’s hard for employees not to feel irked that someone who hasn’t put in the time with the company can surpass them on the corporate ladder so quickly. Hiring company leaders from within eliminates this problem. When you promote senior team members who do their jobs well, other employees can see that hard work pays off, which boosts team spirit. Workers become more motivated when they know the possibility of advancement exists. The employee-employer relationship improves, resulting in a better office environment for everyone.

Easier Transitions

Promoting from within almost always involves moving someone to a management position within a department where they already have extensive experience. For example, someone hired in as a staff accountant might ascend the company ranks to accounting team leader, vice president of accounting, and eventually chief financial officer. With each promotion, the transition is more seamless compared to bringing in someone new to the company. While working as a staff accountant, the employee gets the feel for how the accounting department runs; upon being promoted to accounting team leader, that employee is effectively managing people doing the same job that they used to do. Hiring from outside, by comparison, comes with the risk of a rockier transition period. The person might be entrenched in a previous employer’s culture and philosophy and may take longer to adjust to your company’s way of doing things.

Future Recruiting Efforts

Establishing a culture of promoting from within helps with future recruiting efforts. When your business is growing and you’re looking for new entry-level employees to handle the increased workload, you want the cream of the crop. The best employees on the market have options, and they compare their suitors before accepting job offers. Clearly, factors such as pay and benefits rank at the top of most people’s priority list when seeking an employer. Other perks, such as flexible work hours, a casual dress code, and a laid-back company culture help to entice new employees. Do not discount the value of showing interviewees how many managers and team leaders started in a role similar to the ones for which they are applying. Professionals with defined long-term goals – the type of people who usually end up being the best hires – want to work for firms that offer growth potential and not for companies that stick them in dead-end jobs and never look their way when a leadership position opens. Promoting from within offers a host of benefits for your growing business. The next time you have a management role available, consider tapping into your existing talent pool before searching outside it.

References & Resources

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