Ok. So, it’s been a tight year and if you've been significantly impacted by COVID you've probably barely been able to cover the cost of ALDI instant coffee in the tea room, let alone a training budget. One of your team has just resigned and no one else has skills, so let’s fill her role with some great external talent to boost capability. Great idea, right? Maybe not. Let’s take a step back and think about the bigger picture.
- Associate Professor Matthew Bidwell, from The Wharton School, found that on average it takes outside hires three years to perform as well as internal hires doing the same job. In addition, internal hires take seven years to earn as much as outside hires. Internal hires are cheaper and they hit the ground running much faster, so give genuine thought to whether the external will add enough value to compensate for the time to mastery and the extra dollars (and can an internal be skilled up for the same cost?)
- When you’re routinely looking for outside talent rather than giving opportunities to your internal people, your internal talent is looking outside for roles too, using time and energy positioning themselves for jobs elsewhere. According to a report in the Harvard Business review, LinkedIn data indicates that most employees start considering a position elsewhere when they’re looking for career development. So if you’re not building your own workforce, you’re likely losing the talent you do have because your best will be able to find roles elsewhere.
- Passive candidates in other organisations can feel like the right way to go. They’re not looking to go elsewhere so they must be committed and engaged right? The perfect employee! It turns out that active rather than passive job seekers report higher levels of passion for their work, are more likely to be engaged in improving their skills and are more likely to be reasonably happy in their current jobs. Professor Peter Cappelli, also of the Wharton School, has found it turns out active job seekers are interested in moving because they’re ambitious. At first glance, this might make an external appealing, but to flip that on its head, it's also a great reason to ensure your ambitious staff can see room to move in your organisation.
- Finally, past performance is the single strongest predictor of future performance. Google it if you don’t believe me. You can spend all the money you like on psychometric testing, you can do all the behavioural interviews you can fit into a day and you still won’t get as good an idea of how someone will perform in the role as you will from looking at how they perform now. If you have a person who is maybe not doing the role you need to fill, but who is committed, curious, has a transferable or developable skill skillset and does great work, then that person is going to continue to be a committed, curious person who does great work if you give them a chance to dive into something new. And you already know that about them.
I am certainly not advocating for only ever promoting from within; I have seen that fail dismally (quite apart from the fact that sometimes you genuinely don’t have anyone who can do the role). You need occasional fresh eyes and diverse experiences livening up the deep knowledge you already have. But the reality is it is likely cheaper and more effective to give the person you think will be ready in 6 months a chance now, rather than to spend 6 months trying to find someone and perhaps losing that high potential person you already have in the meantime.
One final note, this definitely doesn’t mean that everyone in your organisation who applies for a job should get an interview. There is nothing fair or kind or useful about doing this. If you know a person doesn’t have the skills to do the job, tell them when they apply and help them develop for next time. I can’t tell you how many internals I have seen promoted because ‘they were the best person at interview’ despite the fact they were a known disaster in their role. Or equally often, witnessed a complete breakdown in internal relationships because they’d been lead to believe they were in with a chance only to find out (embarrassingly) that they were never going to make the cut. No good comes from this. Be a bit brave and open. Promote talent. And spend the instant coffee money on some training