Is It Better to Hire Externally or Promote from Within?
What do you do when you are considering promoting someone internally for a new job opening, but your recruiters have just come across a SUPERSTAR from “that” company?
90% of the time, my answer would be what we call “The Leadr Way”:
Default to developing leaders, not hiring them.
Why?
People want to work at an organization with upward mobility; a place where there’s room to grow and continually be challenged. When you canvas the market before seeking viable candidates internally, it sets a precedent that’s difficult to unwind. It might seem like a small decision, but you’re setting a standard of the culture that tells a long-term story to the rest of the team.
If you’re always looking externally, your team will also be looking externally.
One of the most common questions I received in my previous role was: “How do I get promoted like you did?” See, I joined the team very early. It’s crazy thinking back on it, but five years after joining as the first sales hire, I was promoted to VP of Sales over 100 reps.
What did that do for our sales culture? Well, it set a great precedent. The message it sent was: “If he can do it, so can I,” and I completely agreed. You see, it wasn’t my lengthy resume which gave me that role; rather, the only reason I was in that seat was because the CEO believed in me and gave me a shot.
Did I make mistakes along the way? Sure, plenty.
Was I performing at the desired level on day 1? No.
But in hindsight, was it the right decision? Yes. I’m not saying that for just me, but for the message it sent to the rest of the company as well.
As Patrick Lencioni says:
“Even Enron had an integrity poster on their wall.”
People don’t believe something just because you say it. They believe something when they can witness tangible examples of it being played out in your culture.
The end result? You will attract and retain great people when you have a track record of promoting internally vs. hiring externally.
Of course, most people would agree that on paper this is the correct approach. The most common concern I hear is that “In the real world, it doesn’t always work that way.” And that’s valid. A shortage of leaders is a real issue, but we’ll talk about that in the next post.
What should you do when hiring externally makes the most sense for your team?
Although I believe internal development and promotion is most often the best approach, I acknowledge that there are cases where hiring externally makes the most sense for the growth of your organization. I want to share with you how to recognize these cases and equip you with a framework as a guide for making the best hiring decision.
Answering these kinds of questions is never easy, but hindsight is 20/20, and after getting this wrong many times, I’ve learned a 3-question framework to guide my future hiring decisions:
“What is going to be faster--training an external candidate with the required competency to ramp and learn our culture OR training a current employee who is the right cultural fit to ramp and learn the required competency?”
“Are the improved results produced by an outside hire worth more than the fallout of disappointing a viable internal candidate (and the message it sends to the rest of the team)?”
“If it doesn’t work out, which option will be easier to roll back?”
These are helpful filters to consider before making the decision. It really does come down to risk mitigation--mitigating culture fallout, missing a revenue target, and/or pushing a project deadline.
Besides taking the time to answer the three questions above, here are two other challenges that are worth thinking through when promoting from within:
1. Creating Distance
In order to be effective, this individual will need to separate themselves from their current peers & colleagues.
This is a difficult jump to make and depends on how they (and their current team) handle that transition.
People have preconceived ideas of who that person is. It is difficult to ‘recreate yourself’ in one sense so you clearly distinguish the differences between who you were and who you are becoming.
2. Buy-In
If they are well respected/liked today, generally speaking, there will be quicker buy-in & trust compared to an outside hire.
Publicly advocating for them as the senior leader and letting people know they have your full confidence & support can help immensely.
Ultimately, hiring is hard. Even the BEST recruiters get it wrong once in a while, and that applies to internal and external candidates.
Establish your approach on this early. It really is a culture decision—WHO you hire and HOW you hire sends an enduring message to your team.
MT