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Hiring vs Promoting to Fill a Management Role

Is better to outside or within to fill a management role?

December 28, 2020

The hiring process can be exciting, but it can also be daunting. While there are only two possibilities for filling a vacancy; hiring externally or promoting from within; it is not always clear what the right choice is. There are advantages and challenges to both options, including time and costs. 

Case for external hire for management roles

External hires often bring a fresh approach to an organization. This can stimulate innovation, which helps businesses adjust to change better. Advantages of external hiring include:

  1. New skillsets. Having new employees join the company can expand the skills that you have to draw on. 
  2. Growth. Outside hires can bring new perspectives to an organization. A new approach can support a company’s growth. 
  3. Less limitation. Promoting from inside a company often reduces the pool of candidates. External hiring overcomes this limitation. 
  4. Reduce internal competition. External hires can reduce the tension that comes from the competition employees may feel when promoting from within. This can improve teamwork and create a more positive office environment. 

Yet, there are hurdles to overcome if you want to offer a management role to an external hire. These challenges include:

  1. Cost. It will cost a company more to hire an external candidate. A large part of this will be advertising the vacancy to attract quality talent. 
  2. Slower process. With external hires, companies will need to spend more time on the interview and selection process. This can impact productivity as other employees will need to take on extra work until the vacancy is filled. 
  3. Finding the right fit. First impressions are not always correct. External candidates could lack the right personality to fit into your company culture. But, you may not find this out until it is too late. 

Case for promoting for management roles

Hiring from within a company allows you to draw from employees that have demonstrated their loyalty to the organization. It can also be the most cost-effective option. Promotion is also a way to get the most out of the investment you’ve made in your employee’s development already.  

Benefits of hiring from within include:

  1. Improving employee retention. Workers that can see there is an opportunity to grow with a company are more likely to stick around. 
  2. Increase performance. Employees are more likely to give it their best if they are hoping to earn a promotion. 
  3. Reduce hiring costs. Selecting an employee for a management role allows an organization to forgo expenses such as advertising, interviewing, etc. 
  4. Short adjustment process. Promoting an employee to a management position cuts down on the amount of time needed to interview a candidate as your HR staff is already familiar with the individual. This means everyone will be able to get back to work sooner, reducing the interruption of productivity. 

However, there are some drawbacks to promoting employees to management roles. These include:

  1. Filling one role, creating a vacancy in another. When you promote an employee, it means their old position is now empty. You’ll then need to consider how to fill that role. 
  2. Hinder innovation. Sticking with an employee that has been at the company for a while may reduce the opportunity for new and fresh ideas.
  3. Competitive atmosphere in the office. Promoting employees from inside the organization may create tension among staff. It may harm collaboration and teamwork as each individual tries to get ahead. Furthermore, employees that are not promoted may be jealous and hostile to the one who succeeded. 

Using mentoring to overcome hiring challenges

Mentoring is the ideal tool to overcome the hurdles if you are hiring externally or promoting from within to fill a management role.  

Mentoring and external candidates

Although mentoring an external hire won’t help reduce the cost of the hiring process, it can improve the retention rate. There are several benefits of pairing a new manager with a seasoned mentor:

  • Increased understanding of company culture and values
  • Assist goal setting and attaining
  • Enhanced engagement and retention
  • Positive impact on new hires integration into the company
  • Creates social connection within the organization

Mentoring and internal candidates

Workplace mentoring programs can help employees reach their full potential within your company. It can also be a suitable succession planning method. To get the most out of a mentoring program for employees who may be manager material, you’ll need to start early. Matching your high-potential employees with a mentor will help them develop leadership skills like communication, goal setting, and conflict resolution. 

Organizations can use mentoring as a succession strategy to help fill positions quickly with qualified individuals. One of the most significant advantages of mentoring is that the company will have more influence over the shaping of the mentee. 

The reality of filling a management role

When there is a position to be filled, there are only two possibilities. Either hire an external candidate or promote an employee. While there are pros and cons to each option, the reality for most companies is they will need to do a bit of both. Depending on the management position and the employees you already have, the right choice may be to look outside your company. Yet, if you’ve already identified high-potential employees, you can prepare them for promotion by giving them additional responsibilities or challenges. Pairing them with a mentor will also benefit employees with management potential. 

Whatever option you choose to fill management roles at your company, Together can help you create a customized program that allows your new managers to succeed. 

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