“First the who….then the what. Get the right people on the bus.” (You’re the bus driver)
- Jim Collins, author, ”Good To Great”
Attention, hiring managers. This article is not to convince you to solely promote internally. What I’m proposing is to exhaust all effort to find out if you already have the right talent eating the same cafeteria food as you and the team you’d like them to lead. Hiring internally or internal mobility, when done right, will lead to sustained success in any organization.
Like acquiring new technology, those bright and shiny objects, it is also tempting to acquire new, fresh talents outside of your organization. This person may have the bright and shiny attributes—school, certifications, great in interviewing or a well-developed LinkedIn profile—but you should ask yourself, “Is this person the right person for the job right now?” According to Matthew Bidwell, a management professor at the Wharton School of the University of Pennsylvania, when hiring externally, you generally don’t know much about the individual so you “tend to be more rigorous about the things you can see.” Meaning, things like their education and job experiences—things you see in a resume—and other externally observable attributes become the center of your decision-making. According to Bidwell, and of course in our experience, those types of attributes are weak signals or are not exclusive signals of how good a candidate will be in a certain role.
Why promote internally?
Boosts Morale
This shows your current team members that working hard, having the right attitude, and positioning themselves for success can get them somewhere in the organization.
Culture Succession
Many organizations boast that it’s their culture that drives success in their organization. Promoting internally helps pass on that culture up the corporate ladder in your company. If it’s for a leadership role, you’re creating a multiplier for that culture to spread across individual contributors.
Better Value (ROI)
Bidwell’s research on large banks and financial services companies in the U.S. has shown that it takes seven years for those hired internally to match the salary of those hired externally. At the same time, it takes three years for the external hires to perform as well as those who were hired internally. This discrepancy is alarming and should be heavily considered when picking a candidate.
Again, make every effort to find the right candidate internally before picking someone externally. Do not force an internal mobility just to promote from within. If there’s no one internally who would be right for the job, by all means, hire your next superstar externally.
Bidwell’s research was based on director-level positions. Hiring externally for entry-level or junior individual contributor-level positions may not be as much of a problem. This means, those selected internally for mid to senior-level management positions have already established a successful track record within your organization.
Can’t find talent internally? Let’s talk about why that’s so.
Training and Development
Is your organization putting appropriate emphasis into developing talent internally? Are you finding opportunities and resources for internal talent to develop their strengths and acquire new skills? If you lack this in your organization, your employees may not accelerate their potential as fast as those whose companies invest in training and development.
Employee Engagement
Organizations with low employee engagement are more likely not to find the right talent internally. This can be cause by three things. First, low involvement of employees in championing the culture and self-improvement. That’s why leaders try to find someone their lacking externally. Second, organization who lack engagement can also mean that the leaders are not connected with their staff. That disconnect makes it hard for leaders to identify individuals with potential. They basically don’t know their people. Lastly, organization with low engagement simply lacks it—the culture. The main ingredient in “culture succession” is culture. Without it, there is no point of growing from within.
What are your thoughts in this matter? Can you share your experiences in hiring internally versus hiring externally? How did either work out for you and what steps did you take to ensure you picked the right candidate?