Inside, outside, best side If your company needs to create or fill a mid to top-level position, where does it find the candidates? The two basic and obvious sources are either from within its own employee pool or elsewhere. Inside or outside. One would hope, that if the company or organization has been around awhile and is sustainable, the formula and best option have been discovered. We have plenty examples of successful companies that have established a formidable reputation of “rewarding its own” and promoting from within. But there are just as many companies that almost always go to other outside sources. And even with the ones that go outside, then you have the split between hiring someone with direct industry knowledge (if not poaching from a competitor) versus hiring someone completely outside of your own industry. No one likes placing a bad hire. Everyone loses—and if the position is mission-critical or C-level, having someone come in for just a short period only to leave without producing much or contributing to the business, that problematic appointment can really hurt the company.
ON TAP FROM THE PUB By Tom Field Executive Summary: Companies hire outside candidates or promote from within; but the better strategy is up for debate.
Locally, we’ve seen CEO appointments that seem somewhat surprising. In one case, a major retail operation hired someone who was also in retail, but a completely different industry with dissimilar market demographics and dynamics. And we’ve had some recent transitions (in college leadership, for example) that can only be described as demotivating. College presidents coming in with all the pomp and circumstance, only to exit after just one year or so. When we ask about these failed assignments the typical response is that the person was simply “not a good fit.” There is a sentiment among some in management that it’s not worth the “trouble” to hire from within. A recent report from Harvard Business Review does warn that internal job applicants who are rejected end up quitting. On the flip side, management often believes internal hires are less costly, saving the company money because there is less training needed and the salary bump can be lower than what would be offered to the “new hire.” Companies that promote from within at least at some level do tend to rack up a better record of retention. Employees tend to stay at places where they believe they will be promoted. But whether you place most of your positions from inside or outside, of course it makes sense to base the decision on what’s in the best interest of the company, right? The thing management must keep in mind, though, is that the company is also the employees… so what’s in your employees’ best interest must be factored. If those parameters are at odds, you have a whole other challenge on your hands.
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t AUGUST 2021 / vbFRONT.com
