The right hire is getting harder to find. With nearly 10 million job openings, it’s a candidate’s job market.
That’s why it’s important to assess when to hire from the outside—and when to promote from within your own organization.
If you have an internal candidate willing to step up to the challenge, then promoting from within is not only a smart move in the current economy. It’s also a sign of a healthy culture.
It’s all about your culture
A healthy culture is critical to developing new leaders in your organization.
To assess the health of your culture, ask:
- Who are we, and why do we do what we do?
- Are we happy with who we are and where we’re headed?
- How would we rate the overall health of our culture?
- Who are the emerging leaders?
- What kind of opportunities are we providing for them?
These questions are your starting point for improving upon—or creating—a development pathway. hen you have a clear pathway and the right people willing to stretch into new roles, promoting from within can save time, potential mismanagement, and money in the long run.
But without a developmental process, your efforts to promote from within can perpetuate an unhealthy culture rather than preserve a healthy one.
Jason Lemkin, the founder of SaaStr, says that 8 times out of 10, “hiring the best internal candidate as a stretch hire works out,” especially if the candidate wants the management role. Lemkin believes this creates clarity for employees and holds the leadership team accountable for nurturing talent. It also takes the pressure off HR to recruit externally.
Whether you promote from within or hire from the outside often comes down to these questions:
- Do we need new skills and fresh ideas? Then consider hiring externally.
- Do we need someone who knows our culture from the start? Then promote internally.
Either way, the hiring process should support your culture.
Here are common mistakes to avoid when you promote from within and when you hire externally.
3 mistakes to avoid when promoting within
1. Adding more to a current role
Don’t just add new responsibilities to an existing employee’s role and slap a new title on their email signature. This serves neither the employee nor the organization well, and it’s a fast path to burnout and resentment.
It may also deter other talented people in your organization from staying long-term.
2. Skipping the interview
Internal candidates deserve the same courtesy as external candidates. As tempting as it might be, don’t skip the interview process for an internal candidate. This is where incorrect assumptions become dangerous.
The interview process communicates two things: the importance of the role and the value of the candidate. If peers see them as the same person in the same role with just a few extra items on their plate, the internal hire has a hard time adjusting.
To give them the chance to succeed, consider having them change teams or office locations.
3. Moving from entry-level to executive
Don’t promote an entry-level employee without experience or a successful record to an executive level role. If you have an all-star internal candidate, give them the opportunity to grow and develop like everyone else—no matter their potential.
“When [entry-level candidates] are promoted to senior-level roles, they’ve got nowhere else to go,” says brand alignment strategist Kem Meyer. ”They haven’t been set up to lead through complexity at that level. Senior-level titles should be reserved for what they lead, not who they lead.”
3 mistakes to avoid for an external hire
1. Decision-making in a vacuum
Many top-level leaders fill positions in a vacuum. The mistake? Excluding input from others to solve the problem.
Let the team be part of the process. They don’t get the final say, but they do get to weigh in on the process, which helps with buy-in on the decision. Make it a cross-functional process. Determine if it’s the right role for the current state of the team or if it’s best to reconfigure existing roles. Stack hands on the job description and interview process. Ask questions to determine whether the external candidate fits the culture.
2. Hiring out of desperation
Have the courage to say no to the candidate who seems right on paper but isn’t the best fit in person. Or trust your intuition if the candidate is better suited for a different position.
Finding the right candidate is better than filling the right role, even if it means adjusting your organizational design around the best hire for your company. The right culture match is essential. Then you can adjust the role to fit the leader.
3. Taking advantage of their time
If the final stage of the interview process requires an onsite presentation or a project day with the team, pay the candidate for their time.
Kem Meyer suggests a clear-cut way to determine the value of their time: Pay them whatever the current day rate is at the company where they’re employed. This communicates value but also requires trust. They wouldn’t be a top candidate if you couldn’t trust them to be honest about the going rate.
When you’ve got a leadership role to fill, start by taking a culture inventory. If your company needs new skills or fresh ideas, then consider an external hire. If you need someone who understands the cultural identity and the team from day one, promote from within.
And most importantly, ensure your hiring decisions help nurture the health of your organizational culture.
