Picture the scene – a key member of your team has resigned
and they can’t be persuaded to stay. You know you must replace – the dilemma is
whether to “play it safe” and go with an internal candidate or look externally.
Internal promotion can be seen to encourage loyalty, build
morale and send out a powerful message about career prospects – assuming, of
course, that the internal candidate has the right skills – but the drawback surrounds the missed opportunities
of bringing someone new into the organisation.
Many companies are adept at creating internal pipelines of
talent recognising the need to retain good people and provide business
continuity. These businesses strive to offer people a vision of where and how their
careers may develop, instead of having to leave to move upwards. Furthermore,
the creation of continuous development opportunities for home grown talent
sends out a strong and powerful message.
Some companies always promote from within first only
bringing in new people at junior level. By doing this, they tend to have good
retention at lower and middle levels and keep recruitment costs low. Employees
can rise from junior ranks fairly quickly before progression slows due to a mix
of limited opportunities or their inability to progress further.
Succession planning runs through the talent management
process from recruitment to how employee performance is managed and building a
culture of internal promotion gives people aspirations. However, it is critical
that expectations are managed and when an internal candidate is unsuccessful
for a role, they deserve honest feedback so they can re-set their goals and
aspirations based on reality.
However, if the business is venturing into new markets or
sectors, the likelihood is that the required skill set will not be available
internally. Also, there are benefits to be gained by bringing in a fresh set of
eyes with best practice knowledge and skills gained elsewhere. Rightly so, much
is written today about the value of transferable skills and skills can transfer
successfully between industries, sectors, markets and functions.
Whilst it could be perceived that external recruitment
stifles the development of internal staff by cutting off promotion avenues, the
counter argument is that promoting internal talent prevents the opportunity to
inject fresh ideas into the business. Conversely, recruiting a manager from
outside may mean that talent is unearthed in the business that the previous management
had failed to identify or chose to overlook and new management gives these
people new opportunities.
New blood into an organisation, specifically at senior
level, brings new ideas, innovation, creativity, and different ways of working.
It rarely comes without pain because new senior managers will challenge the
status quo, ask pertinent questions and shake people out of their comfort zone
by getting people to up their game or leave.
Business growth can also be a factor in the internal v
external recruitment debate. Some employees are ideally suited to smaller
businesses (invariably these are family based) and as the business grows and
possibly the family influence begins to take a back seat; there is greater need
for formalised management structures, process, procedure, controls and
disciplines. Some people will find the growth transition uncomfortable and in
simple terms, the business out grows the individual and a new/different skill
set is required.
In these situations, bringing in someone new will bring much
needed ideas, energy and vision whilst challenging those that say “but we’ve
always done it this way”.
If it comes down to cost, on paper external recruitment will
cost more and external recruits will need to be given an on-boarding process to
familiarise them with the business. However, over time the right candidate will
be able to make a significant contribution and make a step change for the
business through new methods of working, accountability and the identification
of new opportunities. Inevitably, change and improved performance are what all companies
are looking for!
Every business needs to manage the balance between internal
and external recruitment but at senior level, sometimes it takes an outsider to
come in and make that change happen.
Written by Adrian Berwick.
Adrian is an experienced HR Professional who works exclusively with Macallam on the delivery of their Personal Career Transition service.
Written by Adrian Berwick.
Adrian is an experienced HR Professional who works exclusively with Macallam on the delivery of their Personal Career Transition service.
