Tag Archive: promotion


Article written by:  Matt Straz who is the founder and CEO of Namely, the HR and payroll platform for the world’s most exciting companies.

When you have an open position to fill, do you look to your current employees and promote from within, or do you hire a candidate from outside of the company?
Considering the facts that external hires are paid 18 to 20 percent more than an internal employee for the same position, and receive lower performance evaluations for their first two years on the job than their internal counterparts, it may be a good idea to consider current employees before advertising job opportunities externally.
Before you decide to bring in new blood, here are four (4) reasons why you should first consider existing employees when new positions become available:

1. You’ll save time and money on hiring
The most obvious advantage of promoting from within is that you save time and money associated with recruiting new hires. Not only does it save money on compensation, but it eliminates the need to advertise the job opening, sift through an estimated 250 resumes, and interview a myriad of candidates.

Also, keep in mind that having an open position for too long can result in lost productivity — and dollars. Creating an internal talent pool can make hiring more fluid by having qualified, experienced options readily available when a new job opens up.

2. You’ll save time spent on assimilating new hires
While external candidates might bring a lot to the table, it takes time for new hires to adapt to the job and achieve the level of performance to which they’re accustomed.

This is another instance where internal candidates have a leg up. They understand the company culture, know how to navigate relationships with employees, vendors, and partners, and have applied the company’s mission and values to their working style.

Some training is necessary regardless of whether you promote internally or hire externally for a position, but current employees don’t have to go through the typical onboarding process associated with starting a new job at a new company.

3. You’ll see employee performance pick up
One of the top reasons employees quit is because they have no clear career path.
Opportunities for advancement act as a huge incentive for employees to stay with a company and perform at their very best. Employees that can map out their career path with a company and understand what it takes to get to the next level will likely work harder to do so.

Additionally, internal promotions improve employee morale by recognizing outstanding achievement, thus encouraging others within the company. To reap benefits like increased employee morale and better quality of performance, openly discuss career growth, opportunities, and promotions with employees.

4. You’ll avoid bad hires
Promoting from within is the one sure-fire way to avoid the costly mistake of making a bad hire. Not only can a bad hire set you back financially — upwards of $50,000 for some employers, according to a 2013 CareerBuilder survey — but it can also negatively impact productivity and morale.

Your existing employees already understand the ins and outs of the company. They’ve already proved themselves to be productive employees, whereas hiring externally requires taking some risk. To make promoting within your organization work for you, consistently groom your future leaders.

Take McKinsey & Company, for example. This “Best Place to Work” has made employee development a part of its company culture by dedicating significant time, resources, and leadership focus to building a company that develops talent through formal training programs, coaching, mentorship, and collaboration.  It doesn’t hurt that they also invest $100 million a year in formal training.

Invest in your employees and their future with the organization, and they’ll invest in you. Create a thoughtful, strategic succession plan for your employees to ensure they are qualified for high-level positions when they become available.

Do you have employees who, in your opinion, think they are more proficient than they are or think they should advance faster than you believe is realistic?

How you handle the situation will make a huge difference in whether your employee:

1. Listens to and respects your feedback now and in the future.
2. Stays within your employment.
3. Remains engaged if they stay.

Suggestion – don’t use the phrases:  “It takes time” and “be patient”, as this will only douse the flame of enthusiasm and ambition, and leave you with a disheartened, disengaged employee. You will end up with an employee who believes:
1. You don’t understand their ability.
2. You don’t value their enthusiasm and ambition.
3. Your organization doesn’t provide opportunities for advancement.
4. Growing professionally will require looking for a new job.

You need to first shift your employee from Unconscious Incompetence to Conscious Incompetence.

Unconscious Incompetence is when an employee doesn’t know what she doesn’t know.  She doesn’t realize what knowledge is lacking and still needs to be learned.  She isn’t aware of what necessary skills she doesn’t possess. In other words, as a Manager you need to help your employee develop Conscious Incompetence. Helping your employee develop Conscious Incompetence also stimulates motivation. They now see a gap between where they thought their current ability could take them and their new understanding that it won’t take them to where they want to go.  With this understanding, they’re more open to hearing what they need to do next. This sense of “I don’t know X and I need to know X to get to where I want to go” provides the fuel to power self-directed learning. Therefore, as a manager and coach, you need to make a list of the specific skills and knowledge that your employee doesn’t yet know, but needs to, for them to progress.

  • Give Specific, Crystal-clear Examples
  • Don’t be vague when describing the areas you believe they need to develop.  By being crystal-clear with your feedback, you help the listener feel a sense of control: “Ah … I know what he wants, what he doesn’t want, and what I can do to fix it.”
  • State Explicitly How Much You Value the Employee’s Enthusiasm and Ambition

This approach doesn’t just increase your ability to get commitment to change from your employee, it also helps to build a stronger, more productive relationship. This stronger, more productive relationship will make future conversations easier and more effective. Because they can see you care about them and want to understand their perspective, they will care more about you and your perspective.  Also, because they feel respected, valued, and heard, they will most likely care more about pleasing you in the future.

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