How do you decide between hiring externally or promoting from within for key positions?
Selecting the right candidate is crucial, and there’s a lot to factor in so you make the right call.
Both internal and external candidates may have the necessary talent, but there are essential factors to consider before making your choice. Consider time, costs, and team impact:
- Internal promotions expedite the process. Leveraging the pool of existing employees who are well-versed in the company’s operations can save valuable time. Keep in mind, you’ll also need to fill the promoted employee’s role afterward.
- External hires may require a longer onboarding period and can have higher recruitment and compensation costs.
- Internal hires come with built-in familiarity and loyalty to the existing team, it is a smoother integration. The morale of other team members can also receive a boost when they see loyalty being rewarded.
- External hires need time to adjust and adapt to the company’s culture. But it can also inject fresh perspectives and innovation into the organization.
We must carefully weigh the advantages and disadvantages of each approach before making a choice.
The goal remains the same though: selecting the candidate who can get the job done and aligns best with the company’s culture, values, vision, and strategy.
Grace and peace,
Chris LoCurto 0:00
three big things you need to consider when trying to decide whether to go with that outside hire, or whether to promote from within that is coming up next.
Welcome to the Chris LoCurto show where we discuss leadership and life and discover that business is what you do, not who you are. Welcome to the show, folks, I hope you're having a fabulous day, wherever you are. Today, we are going to have some fun talking about the three big considerations when deciding between promoting within your organization and hiring someone from the outside. So who is this for? Who am I actually talking to? Well, owners, CEOs, executives, leadership teams, absolutely HR, reps and recruiters. Anybody who is looking to hire, right? Anybody who's looking to fill a role, I can tell you this, the next hire is one of the most important decisions that you'll make. Now, for a lot of you out there, you're probably like, I really don't think so Chris, we have a team of 200 people. That's fine. That's great that you have a lot of folks on your team. Guess what, if you're not focused on getting the absolute right person in the seat, if you're not focused on making sure that you're making the right moves strategically inside of the business, then it not being an important decision can absolutely start to create what we call a shotgun approach in your business, it can start to create a negative effect on your culture, it can start to create a negative effect on your communication. So as we go through this, I don't want you to just think about, Oh, these are three big things, all these are all important. It can make a massive difference on what happens inside of your culture. It can make a massive difference on what happens with accountability.
I can tell you, it can make an incredible difference on how much energy you're putting out on training a team member, right? So yes, if you've got two people, 200 people, 2000 people, I think in most of the people listening to this, you don't have 2000 team members, you're you've got two team members, to a couple 100 team members, right? So we're really not speaking to large businesses, we're really speaking to small and medium sized businesses. This is an incredibly important decision. Now if it's not the most, that's fine, I get it, I understand. But I can tell you, it should be up there, right. And the process really should be up there. So we have an elaborate and I don't mean complicated, but I do mean comprehensive interviewing process. It is a long process. This is on purpose. And for good reason. Right? The team affects every aspect of the business. Again, I just mentioned the culture above all, your team affects your culture. Now for me, what is culture? I say that culture is actions and attitudes, right. And that is a big part of what's driving your business. The number one issue we see in every single business is a lack of high levels of quality communication. The number two issue is a lack of quality accountability. And number three tends to win out being lack of quality culture. So making sure you get the right people in the right seats, is incredibly important to your culture. It also affects your clients, your customers, it also affects the team members, it absolutely affects your bottom line. Hello, right. Every team member affects your bottom line in one way, shape, or form. And we also understand that new hires are an investment into the business into the team and of the culture and everything that we've just talked about.
So we've talked recently about how your client is the most valuable asset of your business, go back and listen to episode 533 rules to hedge against customer loss. But let's quickly add this to the mix that your team is your most important investment. Now, chances are you're not somebody who's listening to the show, and only thinks of your team as just a way for you to get what you want. Right? Just you don't think every team is just numbers, right? So the people listening to the show. I believe that statement resonates. Right? I don't think we have people listening that are going I really don't care about my team. They're just they're just a way that I build a business, right? So if you're looking at it from the aspect of people matter, your team matters, then your team is your most important investment. Right. So So should you promote from within, or go with that outside hire? Now let's assume that both types of candidates have the required talent. Right, both internally and external candidates, they they have the talent to pull off what the roll needs. This is, you know, something that's important as we go through these three steps. With that being said, there are times that we can absolutely train someone to have the talent, you know, train that piece, and if they're a great cultural fit, but that's not what we're talking about today, right? We're comparing external and internal, as being somewhat equal as far as what it takes to pull off the role itself. That's why these other three pieces are going to make so much more sense. So the other conversation is for another day, you know, can we train in the talent? That's a considerably different conversation.
So let's look at the pros and cons. The first thing to consider is number one, time, and costs. So internal hires, will fast track the interview process. Now, we're not talking about circumventing the interview process, right. But there are things like for us, our very first interview is a culture interview. Right? It's a 15 minute 30 minute max conversation with somebody to see if they even fit the culture. Well, if you've already got somebody on your team, you should already have that answered. Right. The next one is going through a lot of the talents that they currently have, you know, the their resume, what have they done all that you've already got certain steps covered with somebody who's already on your team. Now, you do want to take a look at, you know, what have they done, since they've been on your team, that's going to give them an advantage to being in this role that you know, that shows you that they can pull off this role and execute the job descriptions, the K rays, all that kind of fun stuff. But they will, they can absolutely fast track the interview process. Now. If you promote from within, you still have to fill their role after they've been promoted. However, this person can usually help in the replacing of themselves, as they already know what it takes to succeed in the place and, or in that role that they've been in. So it's, it's great when you've got somebody who if you've given them the time to do so right, let's not put them in a new role in 100%, slam them with the new role. Let's allow them time to retrain somebody or you know, train somebody coming up into that role and help them to become successful and to make them successful lead them to success in that role. We don't want to just dump another person in that role. Because we feel really good about moving this person to a new role. We want to be able to set somebody up for success. We want them to delegate properly. If you have been through killing the Leadership Crazy Cycle, then you understand the importance of not just giving somebody a roll and then coming back and asking them Did you do it yet? Did you do it yet? Did you get that done? Oh, you didn't? Oh, okay, I guess I'm gonna have to take that back. Instead, we want them delegated to properly, so that the person moving into the new role can be successful as well.
So when we look at an external hire, well, they're going to take longer, and they're gonna cost you more in this process, right? So if you bring in an outsider, then you should be prepared for a longer onboarding process. Because why? I mean, is that a bad thing? No. Every external hire should go through a long, a very comprehensive hiring process and onboarding process, we want to set them up for success. So you shouldn't be looking at your process and going well, it's long, I guess, maybe Chris is saying I need to shorten it up. No, that is not what I'm saying at all. All I'm doing is comparing the two. So if you bring somebody in from the outside, they're gonna go through a much longer onboarding process. And it could end up costing you a little more, right. But it could be worth it. If it's the right person, if you've got somebody who's better than anybody you have internally, then it's the right way to go. So I don't want you to hear oh, internal is way better. Again, assuming that they have the same talents to pull off the role, then one of the benefits of hiring internally is that it's going to cut down on time, and most likely, it's going to cut down on expenses as well. Now, if you don't, then for the love external is absolutely going to be the best way of bringing somebody in who has the right talent. One of the other issues when it comes to time and money with external hiring, is you may have to go through a lot of interviews before you find the person who does have the talent. Once again, please do not hear me say internal is just better. That is not what I'm saying. What I'm saying is all things considered all things you know, talent, looking the same You're probably going to spend less time, you're probably going to spend less money if you're hiring from within, because they're already a part of that process.
So what is the second thing we need to consider? Well, the team impact this is a big one. Internal hires have built in familiarity. And very possibly not saying it's an absolute, but very possibly they've got loyalty across the team, right, their rapport with with others goes a long way. It also helps again, fast track the the integration among existing teams or team members, this can also boost the morale of other team members, knowing that the loyalty is rewarded. So think about it. If you promote somebody from within, what does that communicate to all the other team members, oh, my gosh, that's an opportunity. If they chose somebody from within, instead of just pulling somebody from the outside, that's actually a great thing. Who knows that might happen with me someday. So a great aspect is how it's going to impact the team. Now, if you're doing a great job leading your culture well, and if you're doing a great job with accountability, and if you're doing a great job with communication, if you're doing a great job, making sure that you don't have unresolved conflict between team members, if you're doing a great job leading your team and making them successful, then this should be a fantastic advantage to the internal hire. Because again, the report or the loyalty, all of that really goes a long, long way. A lot of team members are excited that somebody is moving into a role that they already know, that they know how to work with and know how to communicate with if what you're finding is that you have got a team of backstabbers of gossipers of you know, people who are don't communicate well don't have good accountability and you know, they suck inside of the culture, well, then guess what this is probably this is this isn't going to have any great impact that it might actually have a more negative impact than bringing in somebody externally.
So things to consider, you know, how will this person if I'm looking at an internal person, how are they going to impact the team? What about the external hire the external hire, while we're going to have to have time to train to acclimate to adapt to the existing culture, this could obviously present an unstable element in the culture because we're bringing in somebody new, right, but it could also, it could also be the wrench in the machine, it could be the thing that you want, it could be the thing that you're looking to change or shake things up a bit. So many times, you know, I go back to Days of, gosh, decades ago of having a sales team, that was really a I shouldn't say a sales team. It was a customer service team that did sales, put that could only sell so much. And it was one of those teams, it's like, Guys, we were spending a lot of time on the phone, we're spending a lot of time in conversations, we have the tools to help people. What's the struggle, Paul, this is the best we can do. It's like a you know, a ceiling. And then bringing somebody in with this from the outside who just blew it out of the water. I mean, like 10 times the amount, probably was probably a little higher, probably three or four times the amount of what everybody else was doing. I mean, it just was phenomenal. And then the excuses of oh, well, we can't sell that much. I mean, we've hit a ceiling, we don't have that many opportunities, that all of a sudden, diminished dramatically. Right? So then it was a okay, this can be done, we've proven this can be done.
How do we get everybody up to all the current team members up to the same pace? Or dang close to it? Or do we do something else? So having somebody come in externally, and impacting your team could be a phenomenal move, especially if you're looking to shake things up, especially if you're looking to change things up. So what is the third thing that we need to consider while leveraging the risks? Notice that I said leveraging the risks and not managing the risks? Let me speak to all my SS and C's out there. Risk isn't always a bad thing. Guys, it's it's not many times it is but for somebody like me, I'm a somebody who likes to take calculated risks. I like to calculate, what is the risk? How's it gonna fail? How could the succeed? What am I willing to lose in this process? Every How could this impact culture? You know, communication, everything, clients vendors, you know, I will always try and calculate what is the risk so, as I just mentioned, sometimes shaking things up can be a good thing. The key is getting the risk factor to work in your favor. Sometimes, that's exactly what you Want. That being said, bringing somebody new over a current team member can have absolute side effects. So let's say you're bringing somebody in and putting them in a role. You know, that's going to be above other people that this person has considered to be peers, you know, promotions have a level of consistency and stability. You already know what to expect from this person. But also it could perpetuate existing mindsets that could perpetuate existing attitudes.
So if you've not been managing the culture, well, this could totally be a problem. What happens if you elevate somebody in a role, and you did not know that there is unresolved conflict with other team members, you know, they may be playing well in the sandbox, but they don't like each other. And now you've elevated somebody over one of those team members, and they're like, I am not going to bust my butt for this person. I don't like them. I sure as heck don't like them being my leader. Now, you might be creating more issues than you're prepared to deal with. And sometimes when somebody already has a relationship with somebody that maybe they don't like each other, then it makes it much more difficult. Taking the internal promotion than bringing in somebody from the outside who's already ready for that specific level. Right? Because obviously, the people underneath that person, don't know that person, it's still a struggle. But if you haven't managed the culture, well, if you haven't managed the teams, well, then guess what, this could be a problem. However, the internal promotion many times with mature people a great culture is phenomenal. Many times people already know that that's the person that should be, you know, elevated to that role. And it's a great opportunity for you to offer the promotion to anybody who wants it. And those who aren't ready for it, it's a great opportunity for you to give them growth paths. What do I mean by that? A lot of times people like oh, I deserve that role, I shouldn't be in that role. And you know that they aren't there yet. They're not ready for it. But this gives you a great opportunity to ask them, What makes you prepared to take on this role, what what do you see in yourself, and then you get to share, here's some struggles that I see. That shows me that you're not ready for this promotion to be in this role. But here's what I want to put together.
If you would like to be in this place, here's some things I want you to work on. So believe it or not this internal hiring process, many times you could do this, even if you're still offering it externally, it gives you the opportunity to sit down with a team member and go, here's the things I need to see from you before I could consider putting you in a role like that. Now, some of you are like, Oh, great, now I'm gonna lose team members, most of the time you don't. But the ones you do lose are the ones you're already ready to lose the one that walks out the door, because they're just so frustrated and upset at you. Chances are you've been holding on to that person to wait too long, and not have you know, held them accountable for their attitudes and their actions and the way that they've led their role. And so believe it or not, it may be scary to lose a person. But if it's somebody who should have been gone a long time ago, and held accountable and pushed on and you know, either lead to success or lead to out the door, well, then believe it or not, many times that person is actually going to be it's going to be a blessing that they've moved on to something else. God has plans for everybody. And not everybody has to be inside of your business, right. So I know that sounds tough. But those of you that have that type of team member on your team, you know exactly what I'm talking about. If this doesn't resonate with you, then there's a good chance you've not had that type of person on your team yet. Either way, it all comes back to your leadership. Are you leading them incredibly well. So what about leveraging the risks with the external? Well, the external hires are less of a sure thing. Oh, my gosh, I think we all we all understand that right? But that risk can be leveraged in the sense that the new hire coming on board is a blank slate that you get to write the new code of your culture on.
So a great thing leveraging the risk is yes, they may not be a short thing. But it also gives you an opportunity to start with a clean slate on here's how we do things culturally. Now, for a lot of you. You have some folks inside of your team that you're working with culturally, that they've been on your team for a while, you know, they're not operating the way that you desire inside of your culture. And so you're working with them? Well, sometimes it's great to bring somebody in brand spankin new blank slate, teach him the culture and help them to see you know, choices and consequences. What it looks like to be successful. what's not being successful, you know, all the things that you need for them to fit into the culture. Hopefully, you're not dumping that person in with somebody who's being toxic or poisonous in your culture and then allowing them to screw up the new hire, right? That obviously would not be a good thing. So keep these things in mind when you are assessing the skill set in your own backyard versus, you know, fishing for new talent in the pool. So number one, again, time and cost involve, which could vary depending on the importance of the role, obviously, number two, the impact on your team, the culture, morale, you know, when you're when you're looking at promoting versus a new person. And also, number three, let the risks work in your favor, leveraging your choice, you know, old versus new to work for you. So maybe today was a lot for you to process where you just want some help getting to the right decision. Check out our executive coaching program by visiting our website. Go to ChrisLoCurto.com/mastermind. To find out more about getting the wisdom you need to succeed. That's Chris ChrisLoCurto.com/mastermind for executive coaching today. Well folks, that's all the time we have for today. I hope this information has helped you. As always, take this information, change your leadership, change your business, change your life, and join us on the next episode.