6 Benefits of Promoting from Within
October 27, 2023
Hiring new talent is no easy feat; it is time-consuming, costly, and at times seemingly impossible. In today’s employment market, we see a deficit in workers vs job openings. In fact, there are 9.6 million job openings in the U.S., but only 6.4 million unemployed workers.
When positions are left empty, companies are bleeding money to fill seats quickly by utilizing various resources to identify new talent. But what if the most valuable resource already exists within the organization? Promoting from within can not only help fill vacancies, but it can also catapult a company’s reputation, culture, and retention. We explore the benefits of promoting from within and when to seek outside talent.
Culture in the workplace is a collection of attitudes, beliefs, and behaviors that make up the regular atmosphere. Since culture takes vision, dedication, and time, leaders must protect it.
When leaders promote from within, they are securing the established office culture. By retaining and promoting employees, leaders instill the attitudes and beliefs they seek throughout the organization.
Motivate The Masses
Keeping employees motivated and engaged is critical for any leader and organization. Motivated employees are likely to be innovative and creative and be more eager to solve problems.
Promoting from within can be a jump start to motivating the masses within the organization. Internal promotions signal to employees that leaders are invested in their careers, and as such, employees will be inspired to work harder to make the step in their career paths.
Turnover is not only inevitable, but it is also costly. Lack of compensation, flexibility, or career development and advancement contributes to employee turnover. As such, a surefire way to help increase retention is through internal promotions.
A study in 2020 indicated that companies that promote from within are likely to increase retention by 41%. Employees are to remain loyal to an employer if they see a clear career path with the firm.
A company’s reputation can make or break them. With sites such as Glassdoor and LinkedIn, it is easier to get an inside view of the company and culture through the eyes of experienced employees. Any number of negative reviews can deter candidates from applying to any job openings.
By contrast, companies with a reputation for promoting from within project a sense of trust and commitment by the employer to their employees. A trusting reputation not only lures potential candidates but can also help solidify client relations.
Knowledge Is Power
Employers invest considerable time and money into ramping up employees to become efficient in their roles. This investment turns into an employee with a wealth of knowledge about the company and its products or services.
When employers promote employees, they actively retain proprietary knowledge, policy and procedure knowledge, and business objectives and strategies.
Hiring, turnover, and onboarding all take a brutal hit to the balance sheets. Some studies indicate that total hiring and onboarding can cost a company between $2K-$20K, not including compensation.
When leaders promote from within, they forgo all these costs and reap the retention benefits. Internal promotions can also quickly achieve productivity goals as employees are familiar with the organization.
Of course, promoting from within isn’t always an option. There are times when companies must seek outside of their organization to find the right talent. Companies may turn to outside resources for reasons such as needing a fresh perspective, lack of skills, or to add diversity. External hiring can be a valuable and necessary resource.