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Promoting From Within vs. External Hiring

As your business grows, so do your responsibilities. You will likely need to expand your team to alleviate workload for yourself. And having a larger team typically warrants additional supervisory eyes and ears in the mix. Now, the question is whether to promote from within or hire externally. Admittedly, I write this with a bit of a bias. It won’t take you long to figure out which side of the debate I sit on.

More than likely, you’re in one of two positions right now:

  1. You’re a new company hiring your core workers.
  2. You’re an established company needing to add employees.

Deciding how you are going to fill a leadership position will depend on which of those two you are. If you’re in the second group, hiring externally is your only option. However, if you’re in the first group, let me make the argument for promoting from within.

Presumably, you went to great measures to find people that fit best into your organization. And we all know that is sometimes a daunting task. But, you now have people that know the ins and outs of your business. Time was spent training them and showing them the ropes. Who better to oversee that department than someone that knows it? Hiring someone unfamiliar to your business will require time to train them, not only on the basics, but also the leadership aspect. Not to mention, it’s a lot to ask of your staff. Taking orders from someone who has never done the job is a tough pill to swallow.

One of the most quintessential qualities in a person is loyalty. And loyalty isn’t a skill that can be taught. Devotion is found most from your veteran employees. When looking for a leader, loyalty is an invaluable trait. Someone that isn’t as vested at your company may not have the willingness to stick it out when times are challenging.

You may be thinking that an external hire is the way to go because they have a degree. If a particular position is one that requires a degree, I’ll digress. Nobody wants a doctor that doesn’t have a degree. That aside, a degree doesn’t include experience. I’m not suggesting that an individual that spent years getting an education isn’t valuable. All I’m suggesting is that experience should count for as much, if not more, than a degree. Additionally, studies show that hiring from outside sources tend to cost more than promoting someone from within. Not necessarily just their paycheck, but in the time spent training them.

Lastly, and conceivably most important, is the morale of your staff. When you advance someone from the inside, it gives people something to strive for. Working hard for a company, only to be overlooked for advancement is deflating. Eventually, good workers leave in search for a place that appreciates them.

There will be exceptions in your search for management. Perhaps you don’t have anyone willing or able to take on more responsibility. Apart from that, what you are looking for may be right in front of you.

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