Company growth presents exciting opportunities for business owners. They can expand their customer bases, invest in marketing or work toward goals they may have had on their professional bucket lists. Business growth also comes with challenges, like filling open roles to meet productivity requirements. Promoting from within may be the best solution for those seeking sustainable development and a stronger organizational culture.
How Hiring Practices Affect Sustainable Growth
Recruiting strategies can help companies continue growing or fulfill short-term needs. A small business that needs customer service support might hire entry-level workers. They can fulfill their job requirements, but may not last long if they have college ambitions or dreams of working in a different industry.
Anyone involved in hiring practices should equally consider each applicant’s skills and long-term goals. Sustainable growth is only possible if professional teams retain a functioning employee roster that supports their workflows and aligns with the company values.
Factors to Consider During Internal Promotions
Promoting from within can result in numerous benefits, but only if the recruiting team follows company-specific strategies. They should evaluate factors like:
- Past performance evaluations: Potential candidates should have a positive track record of doing their work well. However, only 22% of employees think reviews are fair and transparent, so this should be a singular metric alongside other internal recruiting factors.
- Existing employee skills: Promoting employees is only worthwhile if they have the skills to fit their new roles. On-the-job training could help them, but only if they have an existing relevant skill set.
- Leadership potential: Receiving a promotion often comes with additional leadership responsibilities. If existing employees are not interested in those, they may not be long-term fits for open jobs.
- Best company fit: Sustainable growth may be easier when an organization’s team believes in what they are doing. The best internal candidates align with the company’s values, goals and mission statement.
Small and large businesses can fill open roles with internal promotions and experience greater success. If the candidates have potential, experience and passion for their daily responsibilities, they could support the company’s long-term goals.
Why Hiring From Within Is Beneficial
Internal promotions provide numerous company benefits. Before proceeding, team leaders should consider how these advantages could support their business’s growth.
The Company’s Reputation as an Employer May Improve
People do not want to work for businesses that have high turnover rates or low expected longevity in any given role. Research shows that in 2022, the average person had been with their employer for 4.1 years, down from 4.6 years in 2014.
Promoting the people already working for a company shows a new applicant that they could have a future there. Others seeking employment might respect the brand more after seeing how the leadership team does everything possible to retain their team members.
Internal Hiring Costs Less
Numerous parts of recruitment accrue expenses. Replacing an employee costs 50% of their former annual salary due to the hours spent interviewing people and the resources required to train them. The percentage may rise if the business owner pays a recruitment agency for assistance. Promoting from within increases an employee’s annual salary, but may ultimately cost less than hiring someone else.
Learning Curves Become Shorter
People who already work within a company understand the daily workflows. They know workplace policies, who to contact in various departments and which goals their team needs to reach. Teaching those things to new hires takes time. Hiring from within skips basic onboarding education and focuses on new job responsibilities for the promoted team member.
Other Employees Could Feel More Engaged
Experts note that 85% of employees do not feel engaged in the workplace. This number could decrease after workers see internal team members getting promotions, and they might remain with the company longer as well. Business owners should recognize their team’s hard work and define their professional futures with ongoing internal promotions.
Common Challenges for Business Owners
Rewarding existing employees for their hard work might sound straightforward, but company leaders can encounter challenges. Understanding what others face will help business owners prepare for their upcoming experiences.
External Hires Could Bring Fresh Skills
Someone who has been with the company for 10 years knows it better than most people, but a college grad applicant could have more updated software knowledge that improves their on-the-job efficiency. Team leaders should consider whether fresh skills would help their company grow or adapt to modern industry operations.
Favoritism May Play a Role
Some managers select employees for promotions based on emotional reasoning. If they have a strong friendship with a team member, they will believe in that person’s potential, but that does not mean the person is a good candidate for promotion. Forbes notes that nine in 10 employees see favoritism in their workplaces, proving it is a common occurrence.
Promotions Might Create Empty Positions
If an employee takes on a big promotion that requires them to let go of their previous responsibilities, the company may still need to hire an external candidate for the lower-level role. An internal promotion could remain beneficial even in that scenario. The benefits depend on the unique job changes within each company.
Consider Promoting From Within During Growth Phases
Business leaders who understand internal promotions can benefit from the practice in multiple ways. By watching for common challenges and defining their goals, they can make their company a more reputable employer, save money and reward those who do well within their existing team.
Jack Shaw, editor of Modded and author of numerous articles on business success and self-improvement, seeks to inspire readers with his practical tips and strategies for growth. His writings can be found on Innovation News Network, EETimes and more.
Photo by Cytonn Photography on Unsplash
