Promoting within is often overlooked by managers and company leaders, and yet one I highly recommend.
Promoting within is out of fashion these days, and the risks involved are many. You’re taking a happy, confident and productive employee from a job at which they are more than competent and placing them in one where they may not be. Regardless, you don’t even know whether they will like the next level. Simultaneously, you’re losing their abilities at the job they already fill and will now have to fill another position. Finally, if the promotion doesn’t work out, it’s highly unlikely your employee can return to their old job. In my many years as CEO of numerous companies, I have seen exactly that work out exactly twice.
And yet internal promotion is a key part of our company strategy. We can’t always promote from within, but we are dedicated helping our employees grow and achieve their full potential within the company whenever we can. Fiscally speaking, it’s cheaper than hiring externally, and meanwhile, we receive the benefit of an employee that already knows the machinations of the company and fits within the company culture.
But those are added bonuses. The primary reason is there’s a greater objective attained: promoting within turbocharges the entire company and creates what I call “a virtuous circle.”
The Impact of Internal Promotions
The effect of an internal promotion is immediately tangible: my entire staff becomes a little more meticulous regarding my customers’ concerns, they work a little bit longer and stay with the company much, much longer. They know by staying they can potentially grow to a position that might otherwise take them a decade of employment moves. Internal promotions render them stakeholders in the company’s future.
A full 43% of my staff have already surpassed the Bureau of Labor and Statistics mean employment time of 4.3 years at a lone company, and the only reason that number isn’t higher is because we’ve expanded so rapidly. To have a staff that loyal is a rare thing, and we appreciate our blessings.
When we don’t have sufficient confidence an internal candidate can fill a post, we recruit externally. There is a greater level of risk with an external hire. According to the study Paying More to Get Less: The Effects of External Hiring versus Internal Mobility by Dr. Matthew Bidwell at UPenn’s Wharton School of Business, external hires are 61% more likely to be laid off or fired in the first two years, and 21% more likely to leave the job than an internal promotion. To combat that, we have a careful, multistage recruitment process that helps us get from an average of 313 applicants to the one best suited to the opportunity.
Look Inside Before Looking Elsewhere
Overall, I highly recommend taking a glance at your existing staff before opting to advertise the job externally. If you have someone that might fit the bill, consider giving them project work to test their skills and ambition and see how they do. And if you opt to promote them, adopt a long-term vision: it’s highly unlikely your employee will walk into the role and be an instant success. They will need guidance, and they will make mistakes along the way.
Does it always work out? Of course not. There is no perfect solution. But promoting internally offers benefits that exceed the success or failure of any one person at any one job. Remember the virtuous circle? It’s completed when my newly energized employees pay forward my trust and care for them to my customers. That happens every time there’s an internal promotion. The effect is lasting and benefits the company as a whole.
Jack DeMao, CEO of Electric Guard Dog, is the 2017 winner of the Gold Stevie® for Maverick of the Year for Medium-Sized Business Services at the American Business Awards and a finalist for EY’s Entrepreneur of the Year™ Southeast. Electric Guard Dog is an Honor Roll Inc. List 5000 company, Bronze Stevie® winner for Company of the Year Medium-Sized Business Services and was named Dealer of the Year by a leading security trade journal in December 2016.