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3 Major Pitfalls & Profits When Promoting from Within

Posted August 2, 2016by David Russell


People debate about whether it is best to promote employees or hire seasoned talent. It really depends on your company culture.

The first step is to understand the strengths of your company culture so you can play to those advantages. MSPs pursue three types of company cultures when deciding how best to allocate the talents of technicians and employees.

First, there are those organizations that consistently fail at developing the talents of the less experienced people they hire. If they are smart, these firms either implement systems to improve in this area or stop hiring less experienced people altogether. If the latter is their choice, then they only hire experienced, more expensive people.

The second type of IT service organizations are the direct opposite. These companies are exceptional at hiring recent college graduates and less experienced recruits who are farther along in their career and easily trained. Moreover, these MSPs have the systems in place to develop junior-level team members into highly skilled resources who stay with their organization for an extended period of time. For these IT solutions providers, more experienced personnel may be too stuck in their ways and struggle to adapt to the established company culture.

Then the third bucket of MSPs combines both approaches. These IT solutions providers hire experienced talent and give them a self-motivating work environment to continue aiding in their career development. They also recruit recent college graduates and develop millennial or mid-career technician skills in ways the newbies find personally fulfilling. 

Ideally, your organization is more of a blend and you're able to promote from within. However it is important to understand the pitfalls and profits of doing so.

Pitfalls

There are three key challenges whenever you promote someone from within your organization. This does not mean you should avoid promoting internally. Just be prepared and plan for these obstacles.

1. Alignment

Do their skills, both hard and soft skills, match the requirements of the position?

Start by fully defining the position you want to fill. We help clients do this by developing employee strategic plans for each position in their organization. These are job descriptions on steroids. A mini-business plan for the role. You can download a sample here. We also have guides for writing clear, measurable T.A.R.G.E.T. Goals, and behavioral expectations.

Do not overlook the nuances of different roles when trying to match talent to a position.

We also use our MANAGEtoWIN Talent Assessments to confirm the motivations of the individual and their natural strengths (behaviors) match the needs of the position, and ideally are similar to a superstar we have had in that position. 

WARNING: A strong employee may be interested in moving into a new position, or accept a new role in your organization, thinking they can do the work well. They may be wrong. If they are mistaken, it is a costly mistake that hurts everyone involved financially, culturally and emotionally.

Follow a solid system of confirming that an existing valuable team member is an accurate match with the new position’s needs, just as you would when evaluating a job candidate. No shortcuts.

2. Leadership

Some people are superstar employees, but not good managers. 

Recently one of our clients had an employee take a MANAGEtoWIN Talent Assessment to consider the person for their first management role. Based on the results of their assessment, I recommended the person not be promoted.

The reality of our work environments is that some employees can be exceptional tactically but not as strong strategically, i.e. managing people, and/or in a role that requires them to lead and mentor more than do task work.

In the case of this technician, I suggested our client try the person as a team lead first before moving them into a formal management role. This particular individual would not succeed in a management position in our organization, but company cultures differ across organizations. Perhaps, our client could transform the employee in question into a strong leader. As we stressed to our client, if you decide to try this test, you must set clear expectations that the role change is a pilot for a limited amount of time. Define all critical performance criteria that qualifies for success and judge accordingly.

3. Gap

Congratulations! You identified a superstar in your organization and promoted them, thereby reinforcing your values. This encourages a strong company culture in which people can grow in their careers. 

But…now you have a gap in your organization. Who is going to do the work that top performer was previously responsible for?

Not only that, you promoted them because they are a superstar. You cannot just find anyone. You have to fill that opening with a strong performer.

Therefore promoting from within often does not eliminate your need to hire someone. It creates a situation where you have to define how one or more other employees need to be developed to take on the responsibilities of the person being promoted, plus the attributes of another person you must hire to fill the gap when the superstar is promoted.

NOTE: This is a good problem to have, if you prepare well for it.


Profits

1. Meaningful

The most significant motivator for any employee is that they are doing Meaningful Work. The second major motivator is Sincere Gratitude. This encompasses all of the ways you communicate that they are valued as a member of your team. To learn more about these leadership motivators, check out my previous post: 7 Actions You Must Take to Retain Top IT Employees! 

Promoting from within reinforces your company as a meaningful place to work. It increases employee retention. It reduces the risk of losing team members who do not understand their own growth plan within your organization.

There are a number of other important systematic things to do as a leader to get each of your employees engaged in work they find personally fulfilling. But for now, just recognize internal promotion as a wise way to reinforce that your company is an awesome place to work.

2. Savings

The bottom line is this: Promoting from within saves money.

If you have to hire someone because of the promotion, often the person you hire to replace the promoted individual costs less. Also, other employees welcome the new opportunities gained in taking over some of the promoted employee's former responsibilities.

If an individual’s responsibilities can be taken over by existing employees, then you don't have to spend money advertising for a new hire. You also avoid paying costly recruiter fees and save time you normally would have spent interviewing candidates and training new employees.

Additionally, MSPs that promote from within eliminate risk. The person being promoted is a known entity. As long as you are making the promotions systematically, and not emotionally, then you save money by avoiding any potential failure when you hire someone with whom you are less familiar with.

3. Speed

People promoted from within an organization understand why your organization is unique. They know what you do, how things get done and whom to work with to be effective.

In the end, someone promoted internally can get up to speed in their new role faster and easier than someone from the outside. As a result, training time is reduced helping to maximize productivity.

Overall, you can expect existing, capable team members to start having a positive impact and generating value in a new role much faster than an outsider.

Conclusion

I encourage you to promote from within whenever there is truly a good alignment of skills, the individual has demonstrated an ability to be an effective leader and you have a realistic plan to cover the gap of responsibilities they will leave behind.

There are times when the skill set, new perspective, energy, and other attributes of an outsider may outweigh the benefits of an internal promotion. However, I'd advise you to consider the hidden costs when judging whether it's best to hire a new applicant or promote existing talent.

In either case, avoid emotion and don't be hasty. You don't want to prolong the decision, but you need to examine all aspects, paying special attention to which decision will best complement your company culture.

eBook-Dodging-Danger-5-Hidden-MSP-Pitfalls-and-How-to-Avoid-Them

David Russell is the author of Dave’s Charm School of soft skills training, plus CEO & Senior Consultant at MANAGEtoWIN. He’s been called the Leadership Guy for IT entrepreneurs and has spent the better part of his 43 years in business (34 in the computer channel) working with entrepreneurs to help them hire, manage, develop, and retain superstar employees. David’s mission is “No Bad Bosses.” His LEADERSHIP Essentials services and Certified LEADER programs are totally unique, 1:1 transformational learning experiences. Read more of David’s commentary on leadership, hiring, and company culture at the MANAGEtoWIN blog, LinkedIn and Twitter.

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