By Guest Blogger: Sam Smith 3/5/2018

One of the questions potential long-term employees ask of their future employers is whether or not there are opportunities for advancement within the company. Most entry level applicants and those looking for a job rather than a career aren’t concerned about being promoted once they accept a position within the organization. Unless HR managers are tracking who is asking this important question, promoting from within has both benefits and risks. The fact is that every hire is a risk and there’s no sure-fire way to guarantee that the people you hire will perform well. Here are some pros and cons of promoting from within to consider that may help inform your hiring strategy moving forward.

Team Motivation

Employees who witness the ascension of their peers will be encouraged to perform at the level necessary to receive promoted themselves. Motivating team members to do their best on a daily basis can be challenging as very few people tolerate stagnation or mundane work. Employees who may have challenges in getting work done timely or at a high-quality level can be inspired by seeing others promoted. While it’s important to authentically evaluate performance, it’s also just as critical to provide team members with career goal within your company. Nothing motivates employees more than appreciation and increased pay rates. http://www.loyaltyworks.com/news-and-views/corporate-health-and-wellness/encouraging-employee-motivation-through-internal-promotion/

Employee Retention

Once hired, the furthest thought from an employee’s mind is preparing to leave the organization. HR screening should be such that these types of temporary minded people don’t end up in your company unless the tasks or role that you’ve hired them to fulfill is temporary as well. The benefit of being a select employer is the ability to retain great employees as well as draw new talent to your organization who look forward to remaining with you the duration of their career. Promoting from within is one of the company reputation aspects that gets around quickly. Contrarily, the lack of promotion opportunities is one organizational reputation that makes it difficult for businesses to attract talented employees who dedicate their careers to the company mission.

Smooth Transitions

Hiring within allows promoted employees to remain in the same workplace culture that they’ve come accustomed to while taking on more responsibility, earning more income, and validating their decision to join your organization. Promoted managers and executives have less of a learning curve when it comes to knowing team members, the pulse of the company, policies, and understanding how to meet customer demands. Employers also save money by promoting within through eliminating the costs and time associated with on-boarding new employees. https://www.glassdoor.com/employers/blog/hidden-costs-employee-onboarding-reduce/

More Experience

Hiring externally can bring much needed experience into your company that doesn’t exist. While promoting within is a great benefit to employees, often time employers need the benefit of outside experience to meet operational benchmarks. Hiring externally is usually reserved for higher and executive level management, which may cause resentment among existing mid-level managers.

However, hiring external leadership could help the entire team in the end when the process is well thought out and planned. Good executive leaders bring the missing factors to organizations that benefit the entire team from top to bottom.

Cultural Shifts

Growing companies can become stagnant when most of the leadership is promoted from within. Hiring externally provides a much-needed cultural shift that businesses wouldn’t otherwise experience. New and innovative thinking among leadership can not only help give the organization the necessary cultural change that boosts morale but can also help employers identify problematic team members and processes that inhibit company growth. While organizations strive to retain all valuable employees, a cultural shift for the better more than likely results in the termination, lay off, or voluntary separation of those who are unable to adjust. New leaders have an easier time assisting with those decisions than executives who have established cordial relationships employees who need to be separated from the organization.

Gained/Missed Opportunities

Organizations can miss out on hiring amazing talent by promoting within. When embarking on new business ventures on a product or service level, most times the talent necessary to manage the innovation doesn’t already exist within the company. A clear analysis of the cost benefits of sending an existing employee through training or hiring someone who already has the necessary skill and talent is necessary. Such an analysis should be done before deciding which is better not only from a revenue perspective, but from a cultural perspective as well. https://yourbusiness.azcentral.com/disadvantages-promoting-within-4019.html

Technical Deficiencies

In this digital age, the most common reason for hiring externally is due to technical deficiencies within the team. The downside of promoting within in regard to technology is that employees are used to the systems that have always existed. The knowledge gap of efficient tools and current processes can cause leaders who are promoted from within to feel threatened. It’s easier for an existing employee to cover up their lack of technical knowledge than it is for a new leader to do the same. The most effective strategy more than likely lies in between hiring consultants who have the technical know how and selecting internal team members to partner with them in order to gain the necessary technical skill.

Entitlement

Inevitably all companies have to hire external leadership at some point and this can cause leadership conflict when those who are promoted from within develop a sense of entitlement. Leaders can become extremely territorial and having a combination of leaders promoted internally and those hired externally

can create unnecessary chaos. The promotions and hires have to be well timed to avoid burdening non-management employees with pressure to chose sides. Employee entitlement should be handled confidentially and swiftly on all levels to reduce the incidences of team conflict.

Positive Perspective

Whether promoting within or hiring externally, the goal is to employ leaders who bring positive perspectives to the workplace. Stagnant leadership trickles down to employees and negative attitudes in management will eventually permeate the entire organization. Internal promotion and external hires are specific to your organizational needs and these general guidelines are basic considerations.

Abstract: Employee and operational management are difficult processes for any business. This article outlines basic pros and cons when considering whether to promote internal employees to leadership positions or hire externally to fill management gaps.