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Your highest potential executives may very well be under your own corporate roof. If so, that’s a major plus for morale, productivity and profitability. But if the wrong internal candidates are promoted or promoting is done without the right preparation, the results can be disastrous.

Whether you look to hire within or externally, having the right people in the right roles is a critical support beam for your organizational foundation.

The Pros & Cons of Internal Promotion

The advantages of promoting from within include:

  • External hires tend to cost more and perform at lower levels. A recent study by the Wharton School of Business showed that managers hired from outside made 18 percent more than internal promotes and were 61 percent more likely to be fired within two years. Though they had more education and experience, they lacked the necessary knowledge of company environment, structure, routines and dynamics.
  • You encourage employee engagement. Internal promotion can foster innovation, cultivate loyalty and keep employees focused on business goals and their role in meeting them.
  • You build your employment value proposition. Internal leadership succession helps attract and retain top talent because the best candidates want to work for a company with clear growth opportunities.

But there can be negatives as well:

  • The day will come when you drain your internal talent pool. Then, hiring from within becomes impossible. It’s far better to hire externally than promote someone who is unqualified.
  • Internal placement can be inefficient. Postings may be slow or may fail to reach the right prospects. Be sure your policies and procedures are designed for optimal success. For instance, those based on seniority may not always produce the best hires.

Getting it Right: Factors to Consider

Your best strategy is to strike a balance between internal promotion and well-planned outside hires. Keep in mind that:

  • Just because an employee has robust skills and experience doesn’t mean they can lead. Don’t promote by default. Look for the right change management, organizational and interpersonal makeup.
  • Be sure people are properly developed for their new roles. Even if an employee has been clearly identified as having high potential, be sure they are specifically trained to ensure a smooth transition into their new role. It’s not enough to simply promote a person and then leave thenm to their own devices. Give them the needed tools and support to succeed.
  • Create a leadership funnel. Mentor and coach employees across all organizational levels through formal and informal training. Actively invest in high potentials to establish a culture of advancement.

Consider partnering with the executive recruitment team at BrainWorks to develop and implement the best hiring and development strategy for your leadership team. Contact us today for more information.


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