Promote From Within Or Go Outside?

By Steve Schumacher

Both Choices Have Pros And Cons, But The Key Is Where Your Company Is Headed.

You have just gone through a rigorous interviewing process and have narrowed your choices to two candidates. One is from outside and the other is an internal candidate who is looking to move up in the company. Both have excellent backgrounds, with the same education and very similar experience. They both interviewed very well and either one could be an asset to you and your company. How do you choose?

Many leaders have faced this dilemma and have made both the right choice and the wrong choice. Only time will tell if your decision is correct. Now that the economy is starting to turn around, more of you will be faced with a similar decision.

During the economic downturn, a great deal of excellent employees stayed in jobs they normally would not have. There were just not a lot of job openings available, so people stayed put. As the economy pulls out of the doldrums, those highly qualified people will be searching for new opportunities.

There are some things you can do to increase the probability that you make the right choice between going outside and promoting from within. These are things that will help you, the candidates, and your company succeed in the long-run.

Take A Look At Your Company’s Growth Prospects
Is your company in a status quo, declining or advancing growth mode? If the outlook of the company is one of slow growth, no growth or fast growth, you should take that into account when filling key positions.

Bringing a hard charger in from the outside may be a mistake in a slow or no growth company. They may get bored and frustrated with the lack of opportunities and start looking around again, within a year or so. Then you are right back where you were when the position was open before.

If your internal candidate has grown accustomed to the company and where it is on the growth curve, promoting that person may be the right thing to do.

Assess Upcoming Changes
If your company and/or your department is anticipating a great deal of change in the next few years, you may want to consider a change by bringing in someone from the outside at the same time.

A new face with new ideas and strategies can take the changes you are anticipating and take them to another level. In my experience, people respond a bit better to change when it all happens at once versus piecemeal. On the other hand, if you do not anticipate a great deal of changes in your business, a candidate who is a known quantity may be the right choice.

Check The Company Culture
Take a look at what the company culture has been when it comes to filling open positions. Have most of them been filled with internal candidates or have there been a number of external hires that have proven successful?

How is the internal candidate regarded by peers and other employees in the company? Bringing in an outsider can cause major disruption with other people in the company and may send a message that there is no need to work hard because key positions will be filled from outside. A good external candidate will understand this and will know how to become part of the team.

It will take time, whereas an internal candidate will already be part of the culture. In addition, promoting from within reinforces the message that hard work will pay off in your company.

Look At The Pros and Cons of Each Choice
An outside hire can bring new ideas and approaches to processes and systems that insiders may have overlooked. They can also bring a fresh energy and enthusiasm to the workforce. Downsides include the fact that they will disrupt the culture and will need training and coaching to shorten their learning curve.

Plus, an excellent candidate from the outside may cost you more money in salary than a promotion from within would.
Promoting from within is a plus primarily because it tells others that there is opportunity for advancement and that hard work is rewarded. Internal candidates are known quantities that have a history with your company.

You know what to expect from them and vice versa. Their learning curve will be short and they will already have formed relationships in the company. The downsides of an internal hire are that they may not be able to advance the status quo very much, and may not bring new ideas to the table.

The decision to fill a position internally or externally is a tough one. There are upsides and downsides to both choices. To help you make your decision, go beyond how they match the job description. Look hard at your company’s direction and how the culture will be impacted. Doing those things will increase your odds that you make the right hiring decision. 

Productivity is enhanced and empowerment achieved when leaders solicit, then act upon employee feedback, ideas and concepts. Soliciting and acting upon feedback is the essence of leadership. The proper use of feedback allows leaders to build consensus among their employees and give them ownership of the ideas and concepts to be implemented within the organization.

There are critical differences between managers and leaders. Managers tend to direct and control without soliciting feedback and building employee consensus.

Leaders, on the other hand, build their strength from group consensus, acting as facilitator rather than controller. They understand the power and synergy of combining ideas and working together to achieve mutual goals.

The more involvement leaders seek from their employees, the easier it will be to implement new ideas, resolve nagging problems, minimize conflict and move the organization forward.

Leaders will find the more proficient they are in working with their employees and soliciting their input, the smoother things will run as many problems and headaches experienced in the past are eliminated.
— Timothy F. Bednarz, Ph.D.

Steve Schumacher is a management consultant, trainer and public speaker with more than 25 years of experience in numerous industries throughout North America, including aggregates operations. He can be reached at [email protected]

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