Why do organisations promote high performing individuals into roles leading others?
Thinking about this recently as I was writing my white paper, after interviewing approximately 100 established and emerging leaders, I explored why would we develop high performers into leaders?
- Hiring practices. It can be hard to recruit people with the exact experience desired in places like Australia, where people are tightly categorised. Recruitment of Managers can be costly and often a search firm is required, costing 15-25% of the annual package, in addition taking 3 to 6 months before commencement.
- Retention. To engage and retain people of interest in the organisation, those higher performers can be the biggest flight risk. A recent study showed that ANZ compares well with engagement, with 18% of the workforce at risk and 29% saying that they would not recommend their employer to others. Technical sectors fared the worst, with travel, leisure and healthcare performing the best on these measures.
- Fit. Being promoted internally, means they have some understanding of business, culture and people. Which benefits by limiting challenges to the established culture, so that there can be less shock from someone coming in from outside the business and not appreciating the way things are done. External hires were found to be 61% more likely to have performance issues.
- Cost. Those promoted internally are typically paid lower than hiring someone with the desired experience. There is typically a trade-off between performance and cost, in the short to medium term, lower cost may not equate with lower performance. One study from 2012 in the US found that not only do external hires get paid 18-20% more, but for their first two years on the job, they receive significantly lower marks in performance reviews.
- Example. When internal promotion occurs, in can motivate those who aspire to lead others. Anecdotes can be important during these development conversations.
- Work ethic. Emerging leaders often go above and beyond, rewarding the employer and leadership team.
- Loyalty: they serve the leader that promoted them, executing what is asked of them, rather than challenging.
Want to know more?
Please feel welcome to request my recent white paper that I wrote after meeting and interviewing many emerging and established leaders about their journey into leadership.
What I do
Adam works with emerging and established leaders in technical markets, being passionate about balancing hard and soft skills to harness to talents of the individuals and team. Creating outstanding leadership through self-awareness, seizing and developing talents in others, collaborating and balancing the need for success with clients, partners and peers. Through mixed modes, he delivers impactful programs.