Do you prefer home cooking or take out? It’s a question that has relevance beyond the topic of dinner. It also matters when you consider who to hire for open executive positions. You have to weigh the various benefits that come with internal promotions versus external searches.
The right answer will depend on a lot of factors. You have to look at the strength of your internal talent pool. You also need to consider your place in the market and your longer-term goals.
With that in mind, here are some of the pros and cons to weigh as you decide whether to hire executive talent by using internal promotions or launching an external search:
How to Decide Between Internal Promotions and External Searches When Hiring Executive Talent
You’ve worked hard to build a dynamic team and a deep bench of talent. One of the key benefits is a clear transition plan any time you find an opening at an executive level in your organization. You can seamlessly move one of your current employees into the executive position.
This strategy lets you maintain continuity over time. It also has gives you a boost in productivity and retention, as you create a culture that allows for long-term advancement.
However, this comes with tradeoffs. Without outside voices, you never get a fresh perspective on your operations. This can close off innovation. At the same time, the competition for executive promotions can become toxic.
- They Know the Company: Your new leader already has a handle on the firm’s inner workings. No learning curve there.
- You Know Them: You are familiar with all their strengths, weaknesses, and personality quirks. You will not have any unpleasant surprises.
- A Wide-Ranging Search Necessary: You can streamline the hiring process by targeting a few top internal candidates.
- No Training/Onboarding Delay: Your new executive is effectively able to start from Day One. It won’t take them time to get oriented or meet the team.
- Provides Positive Example for Other Employees: Other top talent in your organization will see that hard work is rewarded with advancement.
- Instant Culture Fit: You know your values and the executive’s values are a good fit since they have already lived within your culture for a long time.
- Hurt Feelings by Other Candidates: Inevitably, some of your other rising stars will feel passed over or slighted when you announce the promotion. This could cause tension in the team.
- Groupthink Risk: Steeped as they are in the company’s history, you can’t count on your new executive for an independent perspective. You might just get the same old ideas recycled by a new leader.
Going with an external candidate for an executive role can cause controversy within an organization. Your other top performers might look around and say, “what about us?” These outsiders also come with an extended learning curve, which means you have to prepare for a potentially awkward transition period.
That said, you do get some benefits from an outside hire. You’ll get someone who can look at your organization with fresh eyes. This can lead to important breakthroughs, as you push past claustrophobic groupthink.
You also end up with a wider variety of choices. When you do an external search you don’t just have to select a candidate among the very narrow group of people already on your team. You can target any combination of talent you want.
- You Get a Fresh Perspective: You gain a clear-eyed view of the company’s operations from someone with an outsider’s frame of reference.
- Broader Talent Pool: Promoting internally limits your search to a few potential candidates. Going outside the company lets you dramatically increase the number of people under consideration.
- You Get Expertise in New Areas: Hiring an outsider lets you expand your team by adding new skills and different areas of expertise.
- You Can Target Specific Skills: Again, when you promote internally, your choices are limited. A broader talent pool means you can hunt out a perfect mix of the skills you want to emphasize.
- High Failure Rates: It’s hard to argue with the numbers here. About half of managers hired from outside the company fail within the first year and a half.
- Longer Learning Curve: An outside candidate takes longer to integrate. One study showed that nearly six out of 10 executives (57%) said that it took them at least six months to reach their full leadership potential when they started a new job.
Need Help Finding Top Your Next Top Executive? Elby Professional Recruitment Can Help!
You don’t have to make a decision on your own. Partnering with a top recruiter, like Elby Professional Services, lets you get an objective opinion about your best options. We can help connect you to Ontario’s top talent.
Contact Elby today to find the best executive candidates.