The benefits of promoting from within
When job vacancies arise in a business, you have the option of hiring an external candidate, or looking internally at your existing talent pool for employees that may be suitable for promotion.
Regardless of how enjoyable an environment your business is, it’s unlikely that all of your employees will be content to stay in their current roles forever. Some may move to other businesses, retire, or change directions in life, but you will also have employees who climb the ladder with you, working their way up through various levels.
You may already have an employee in mind who you think may be ready to take the step up as a reward for their consistent performance, or you have a gap in your management team that you aren’t sure how to fill.
So, what benefits does promoting from within offer?
Promoting from within motivates employees
Employees, particularly among the younger generation, value opportunities for advancement as one of the most important and motivating factors for them at work. They need to see that there is a clear upwards pathway through your small business for those loyal and ambitious employees that demonstrate high standards. In this way, promoting one employee can motivate others at a more junior level as they will see that there are opportunities for them as well if they keep doing the right things.
It’s also important to recognise the risk of the inverse effect here: promoting one employee from a group of similar peers may be discouraging for those overlooked. If this is a possibility when promoting from within, be sure to provide clear feedback and guidance to those that didn’t get the role on what they can do to improve their chances next time around.
You have the chance to evaluate management skills
Promoting from within means you know a candidate far better before having to make a decision on whether they’re right for the role. This is particularly important if you’re looking to promote someone into a management role, whether it’s just overseeing a small team or taking charge of an entire section of your small business.
As you’ll know, management is very important for employee performance, engagement, and retention. After all, managers account for 70% of the variance in employee engagement. As the saying goes, “people leave managers, not companies.”
Having a gifted manager in your ranks is far from a sure thing. Research shows only one in ten people displays natural talent, intuitively understanding people and teams, while another 20% can perform well with the right coaching and development. By considering people that you’ve already been working with for some time, you should be able to get a better idea of whether they’d make a good manager.
Check out our previous post for a detailed guide to recognising and nurturing management potential in your employees.
Promoting from within allows for faster hiring
Consider the process you need to go through to hire an external candidate: advertising the role, sifting through CVs, the back and forth of arranging interviews at mutually-convenient times, selling the company to them, and on-boarding and/or offering training. Promoting from within allows you to speed through, if not skip altogether, many of these stages.
It’s also very cost-effective
Linked to the time saved during the hiring process are the costs you are able to avoid by promoting from within as well. As well as the value of your own time that won’t be spent on administration, interviews, and arrangements, you can count advertising costs among the savings as well. What’s more, existing employees won’t need a bedding-in period within the company, meaning all they need to adjust to is the new role, and this can often mean they reach full productivity far faster than an external hire would have done.
All in all, we hope we’ve illuminated some of the ways that promoting from within can really benefit your small business.