As businesses evolve, expand, and become more productive and profitable, savvy business owners are likely to delegate more to a management team in order to focus on the “bigger picture.” You may need a CFO, CIO, CTO, CEO, CPA – as you grow, you’ll need more support services and more diverse skill sets from company leaders.

There are a lot of benefits to hiring from within company ranks – the kinds of benefits that can impact everything from employee morale to lower training costs.

First, your company saves money. Finding an outside executive can be time-consuming and expensive. If you employ an industry recruiter, your company will pay for those leads, pre-qualifications, and introductions. And bringing in outside help means lowered productivity while the new member of the team gets up to speed.

Hiring from within may enable seamless business transitions with no perceptible impact on your customer or client base – the source of business revenue.

The learning curve is shorter when promoting from within. Show the newly-promoted employee their office, tell them what needs to be done, and your business is up to speed ASAP. They already a lot about the job entails, they’re familiar with company management and systems, and they don’t have to be introduced to the staff.

It helps employee retention. If employees understand that promoting from within is company policy, the opportunity to move up the ladder is a strong incentive to work hard and stay in place as a member of your team. Your employees will appreciate the opportunity to advance their careers without moving to another company or another state.

Employees already know each other. They’re comfortable with the well-deserved promotion of a peer, and see that possibility in their own careers. Employees enjoy greater job security knowing that their efforts will be recognized and rewarded.

Your company maintains its investment in employee skills and knowledge. You hire a school graduate, train him in real-world business practices, invest time in continuing education and higher degrees of certification – and then the competitor across the street poaches one of your biggest business assets – a knowledgeable, trusted employee. The competitor is enjoying the benefit of all of that training and client care experience. Make your investment pay off by keeping that valuable employee at your company and advancing them up the management ladder.

How to Get the Most from Internal Promotions

First of all, find out if you have someone on staff who could be promoted into the vacant position. If not, your choices are obviously limited. However, you may have employees with skills and experience you’re not aware of. Maybe they’re overqualified for their current position, but it was the only one available when they were hired. Work with your HR department to review the résumés of possible internal candidates.

Weigh the pros and cons of hiring a current employee or bringing in someone new from outside. Will a long-time employee feel overlooked and leave if you bring in someone new from another company? What will it cost to train a new employee versus bringing a current employee up to speed?

Develop a system that trains entry-level hires to take over the department five years down the road. Institute an internal program to groom tomorrow’s company leaders in business best practices – your best practices. On-the-job training can be a part of your business’ core values, and a business practice that is displayed prominently in the employee handbook: “Yes, you can get ahead here.”

Keep key people in place. Provide a good package of benefits – something that today’s employees look at, right alongside salary. Today, you could lose a key member of your team when they’re offered a better health plan, three weeks of vacation, and flex time. A strong benefits package may feel like a financial burden, but if it keeps your A-Team working to grow the company, it may be money well spent.

Promoting from within is good for company morale, and it can be great for business.

 


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of Zions Bancorporation, N.A. Member FDIC