“Should I hire a junior person with potential and plenty of runway, or should I hire a seasoned pro who can hit the ground running?” That question was put to me by a coworker with an open position on his team. He knew that someone earlier in their career would fit his budget better, but he wasn’t sure he had time to ramp up an inexperienced hire. My response to his question was “You can pay now or you can pay later – you’re going to be paying either way.” There are obvious advantages to hiring for experience: the hire gets up to productivity faster, and can often upskill and re-energize the rest of the team.
Setting aside the salary differences, you “pay now” or “pay later” with your time as a manager every time you hire or transfer someone onto your team.
An experienced hire comes with higher salary expectations and a hidden cost: that short runway to productivity often means that they may outgrow the role quickly. If your experienced hire doesn’t see a career path within a year or two, he or she is likely to jump to a different company, leaving you with a vacancy to fill again. This might be totally worth it, but it’s something to be aware of and plan for. If you simply don’t have the time or the expertise to ramp up a novice, then paying the higher salary, plus the future cost of turnover makes sense.
A more junior hire who is short on experience but long on potential can be an investment that pays off over time. If you or someone on your team has time to train and mentor them for their first 3–6 months, there is a big payoff. Not only is the starting salary lower and the time to fill shorter than an experienced hire, the junior person who is learning and being challenged will stay with your company longer. So if you can spare the time resources to “pay now,” hiring for potential rather than experience is the way to go.
Success in this scenario depends on managers’ ability to spot potential and transferable skills.
Experience is relatively easy to assess by looking back at the person’s accomplishments and behaviors. Potential is harder since it involves looking forward. Getting managers aligned on a candidate’s potential can feel like a crystal-ball exercise. Fortunately there is plenty of research that can help in spotting and developing potential.
Leadership consulting firm Egon Zehnder identified five characteristics that are strong predictors of leadership potential:
- Curiosity: Seeking out new experiences, ideas and knowledge; seeking feedback and learning new things in order to change.
- Insight: Proactively gathering and making sense of a vast amount of information from a wide range of sources, and discovering new insights that, when applied, transform views or set new directions.
- Engagement: Deeply engaging others, communicating a persuasive vision and inspiring genuine emotional connection between individuals, the organization and the leader.
- Determination: Managing and maintaining long-term, sustained effort and focus despite obstacles and distractions, while not ignoring evidence that the nature of the activity should change.
- Motivation: Being energized and engaged on an emotional level with the work of leadership.
Motivation turns out to be the single biggest indicator of potential. I’ve worked with many managers who say “this person has potential to do so much more…” but what they are really saying is “I wish they were motivated to do more.” For someone to be successful in a stretch role, they must be ambitious and demonstrate energy and drive. People with high potential don’t just say “yes” when opportunity comes to them; they actively seek out ways to advance their career. People with high potential go above and beyond to get great results. And when it comes to identifying people with potential to move your organization forward, look for those whose motivations are in line with the company’s mission and values.
In addition to assessing potential when you’re interviewing junior talent, look for transferrable skills. Get the candidate talking about a goal they set that they felt great about accomplishing, or the last thing they took the initiative to learn, or a particularly challenging problem that they solved, and you’ll get a read on potential indicators and valuable skills and traits like learning agility, resilience, communication, collaboration, bias toward action, and intellectual horsepower. Transferable skills can be gained and demonstrated in many settings and are what enable people – not just junior talent – to learn on the job, build relationships, and get results.
In either scenario, whether you decide to “pay now” or “pay later,” it’s worth assessing potential and thinking about runway before you hire or transfer someone onto your team. And in either scenario, success really depends on “paying throughout” – investing time discussing career aspirations, connecting your people with training and other people who can help them, and coaching and challenging them so they grow.
Learn more about how to identify solid competency and great potential – and assess which is right for your team – by downloading our Behavioral Interview Questions and Templates.