Despite the tight labor market, it’s still common practice for employers to hire frontline leaders from outside their company. Promoting internally can save time and resources, improve your company culture, and boost morale.
When it comes to frontline leaders, it’s easy to understand why employers might want to hire outside of the organization. New people may have leadership skills that current employees don’t have. The best internal candidates may not be ready for the frontline leader position in question. However, promoting and training your frontline leaders from within is ultimately better for your bottom line.
“In the era of lifetime employment, from the end of World War II through the 1970s, corporations filled roughly 90% of their vacancies through promotions and lateral assignments. Today the figure is a third or less.”
HARVARD BUSINESS REVIEW
The Case for Hiring Internal Frontline Leaders
The labor market in the U.S. is extremely tight right now. According to the U.S. Department of Labor, unemployment is the lowest it has been in 50 years at 3.5 percent and is back to pre-pandemic levels. Despite heightened concerns about inflation and possible economic contraction, employment is a bright spot right now. But such low unemployment does present challenges.
Finding people to fill critical roles in such a tight labor market can be costly and time-consuming. There are advertising fees from recruiting agencies, recruiting sites, magazines, social media sites, and newspapers. It is also a much longer process. You have to comb through resumes and screen and interview candidates. According to Workable, the average job in the U.S. can take up to a month to fill.
Additionally, it’s less expensive to promote and train your employees than it is to hire an outside employee. According to The Institute for Research on Labor and Employment at the University of California, Berkeley, the average cost to replace an employee–no matter the worker category–is around $4,000.
A study in The Wall Street Journal by Matthew Bidwell also found that external hires typically made 18% more than internal hires in the same jobs. Bidwell also discovered that when the team had to bring a new hire up to speed, the overall performance of the whole unit declined.
Integrating new people into your processes can also decrease productivity and reduce capacity and other critial performance metrics. There is a period when the new hire is still learning their role, and they don’t get as much done. They are still figuring out their responsibilities, establishing relationships, and navigating new workflows. Ultimately, it can take up to eight months for a new employee to get up to speed and be productive.
There is also a higher risk of early turnover with new hires. If weeks are invested into onboarding the new employee only to have them quit three or even six months later, all of those resources have essentially been wasted. So again, it’s easy to see how this can be financially devastating if this happens multiple times a year.
Other Advantages of Promoting Internal Candidates Include:
Knowing the Person is Already a Good Fit for Your Company Values and Culture
Hiring an outsider comes with a certain amount of risk that you won’t have to deal with if someone you already know is transferred or promoted. With external hires, there is always a chance that they won’t stick around, fit the culture, or measure up to what is required in the roll.
Internal Candidates Are Much Easier to Find
In today’s extremely tight labor market, this is especially beneficial. When you hire an outsider, you will have to do a great deal of searching. There may be dozens or even hundreds of applications you’ll have to go through. When you hire internally, it’s much easier to get the word out about the position, and interested candidates can easily turn in their resumes. You may still have to make some decisions and go through a number of applications, but it will not be as time-consuming.
Internal Hires Boost Morale and Build Company Trust and Loyalty
While hiring externally can make current employees feel ignored and unappreciated, promoting employees into other positions can bring a sense of optimism to everyone else on the staff. If they know that it’s likely they may be promoted someday, they are likely to work harder. Hiring internally is a great way to provide exciting opportunities to your staff, who you should be rewarding for their hard work, loyalty, and dedication.
Preparing Frontline Leaders for Success
Frontline leaders face a lot of challenges, and they must have qualities that will allow them to lead their team to success. According to Development Dimensions International:
- Frontline leaders are around 50 to 60 percent of the leader population.
- Frontline leaders directly manage about 80 percent of the workforce.
- 2/3 of all frontline leaders felt that they were unprepared for the role. And in the case of first-time leaders,
87 percent felt anxious, uncertain, or frustrated about their role.
- DDI’s 2018 Global Leadership Forecast found that only 33 percent of leaders would describe the quality of the frontline leaders as high.
Frontline leadership positions are typically first-level manager jobs, making them ideal promotions for current employees that haven’t been in leadership roles before. There are many advantages to hiring internal frontline leaders, but one of the best reasons is how rewarding it can be for the staff.
Regardless of whether they are internal or external hires, though, more needs to be done to prepare frontline leaders for their roles once they are in them. Frontline leaders should be provided with learning experiences that are relevant. These can be real or simulated experiences. Diagnostics and insight should be used to personalize training. It is also helpful to focus on multiplier skills. DDI defines multiplier skills as “the skills that have the power to increase impact across multiple front-line leader situations and challenges.”
When Preparing Internal Candidates for Promotion to a Frontline Leadership Role, Try the Following Approaches:
Review Job Description
Revisit the job description with the internal prospect to clarify the performance expectations associated with the new role and how it differs from the worker/executor role.
Address Potential Challenges
Acknowledge potential obstacles the new leader may encounter regarding their ability to adjust to new performance expectations, responding to peers who are now subordinates, etc.
Gather Feedback
Soliciting insight from the internal prospect regarding what they believe they need to be successful in the new role.
Reiterate Core Values
Review the core values of the company and associated leadership behaviors that the prospective leader will be accountable for exhibiting on a daily basis.
The POWERS Difference
POWERS management consulting’s unique Culture Performance Management™ methodology connects the dots between optimized company culture and your desired operational performance outcomes. One of our key areas of focus is Frontline Leadership Training and Development. We can help your leaders embody your core values that drive and sustain operational performance improvement.
POWERS has helped global leaders across many industries operationalize their culture for rapid and sustained performance improvement, increased competitive advantage, greater value, and a stronger bottom line.
To put our experienced team and proven track record to work for you, schedule an initial discovery and analysis by calling +1 678-971-4711, or emailing us at info@thepowerscompany.com.
