Due to the often extortionate costs associated with the hiring and training of new staff, employers can sometimes be tempted to turn away from external recruitment. Especially in tough economic times, some choose to save money by promoting from within their own ranks and filling the gaps left by their new managers by sharing out their former duties and responsibilities amongst the remainder of the team. Even taking into account the additional compensation costs for all concerned, this can seem like a cheaper option than paying for an experienced manager to come in from outside. Without an effective staff development, talent management and succession planning strategy in place, however, promoting staff internally can ultimately work out to be a far more expensive option.
Take, for example, a company that promotes a team member from an operational role to a management position purely in order to save the cost of external recruitment. Even if the individual is provided with fairly extensive training, it could still take months or even years before they become fully effective in the role, if in fact they ever do. In the meantime, of course, the productivity, not to mention the morale of the staff they are supposed to be managing, could suffer immensely and could ultimately result in a revenue loss which exceeds what it would have cost to bring in an experienced manager from outside the organization.
Even with training and despite performing superbly in other roles, some individuals simply don’t have what it takes to become effective managers and promoting them to management roles not only does them a huge disservice, but also the company that employs them. While there are, of course, costs associated with recruiting experienced external candidates, as there are with developing an effective talent management and succession planning strategy, ultimately these can be far less expensive options that trying to squash round pegs into square holes.