Three reasons to promote internally (your next superstar is closer than you think)!

Featured in: Recruiting & Hiring

I recently got approval for two more members to come on to my team, I was thrilled that we would have more capacity to share the load, but after a few days I began to dread the process. We all know that finding quality staff for any role can be difficult, and when it comes to compliance/quality roles it can be damn near impossible. Additionally, I had been through the process before, invested in staff only to find three or four months later they weren't the right fit. You see in my team, I look for strong knowledge of VET, dedication to quality, balanced with someone who is a problem solver, works well with others, and confident to speak and train with both small and large groups. So fair to say, I have high standards. Unfortunately, the typical perfectionist, detail oriented High C types (refer to DISC if this doesn't make sense) that are driven towards the typical 'compliance role' are often at odds with the High I (salesy, friendly, outgoing) attributes that I look for. As it turned out, I didn't have to look too far, after a little research I made the decision to recruit internally. It turns out there are substantial benefits to looking within the business, here are my top three:

Creating company culture-

Organisations that regularly promote staff internally are more likely to retain good staff. Good staff are hard to find, but even harder to keep, if an employee feels stuck in their current position and sees no prospect of advancement, it can lead to a feeling of resentment toward the company and their job, ultimately hindering employee motivation and engagement. Organisations who are seen to reward staff for good performance are more likely to retain the right staff. A culture of advancement also encourages team members to work harder, which boosts productivity, fosters innovation, cultivates loyalty and keeps employees focused on business goals. 

Less down time for all-

 

Promoting internally will not only show lower-tier workers that they can advance their careers with their current company, it will also, essentially, bypass the necessary training and assimilation that outsourced hiring usually entails. Numerous studies have shown that internal promotions have a lower failure rate than external hires, meaning less turnover for the organisation. Employers underestimate the time it takes for workers to get up to speed, says Matthew Bidwell who has conducted several studies comparing the outputs of internal and external promotions. It often took two years for the performance reviews of the external hires to catch up to the internal promotes. "But sometimes an employee has already moved on, or gotten laid off, before hitting that mark" says Bidwell. After he finished the study, Bidwell says he did some further analysis, of how people in a particular unit were affected by an external hire. Because everyone had to work to bring the new hire up to speed, the performance of the whole unit declined. The silver lining for workers is that bringing in an employee from the outside also tends to raise the pay for everyone in the unit.

Cost savings-

In any business it's important to invest in staff, however, it's also important to ensure you get the most bang for your buck. In Bidwells' study, the external hires made 18% more than the internal promotes in the same jobs. In addition to scoring worse on performance reviews, external hires were 61% more likely to be fired from their new jobs than were those who had been promoted from within the firm.  Figures such as this can add up to a lot of wasted cost within an business. Turnover isn't necessarily a bad thing, but there are clear financial benefits from retaining the right people.

One last thought for those who work in VET or more broadly in education, all companies lead by example, if we don't prioritise training and upskilling of our own staff, consider the example that it sets for our clients. A company that can develop a strong pool for internal promotion of it's own staff, then what employer wouldn't want to take a page out of the same playbook? 

While no business can survive on internal promotion alone, its important for businesses to strike the right balance. It can be tough to resist the allure of someone that looks like a superstar (at least on paper), and it’s challenging for companies to build up a pipeline of employees who are suitable for promotion. But managers should know that there is a cost to bringing in talent from the outside and that it pays to nurture and promote from within.




Bea Chambers
Bea Chambers

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