Looking For Talent? Always Look Outside Your Company...

Are you interested in always promoting from within? Many companies are religious about this age old practice. I don't like it. Many of these companies don't even think about engaging a search firm or consider using internal resources to look outside to fill a critical position opening UNTIL they have exhausted all possibilities to find the talent within their own walls.

I think that's a huge mistake. While I do believe there are exceptions, and occasionally there could be a superstar inside the company just waiting to be discovered - companies and hiring managers need choices.  It's almost a false sense of security to always think that the talent you need is already on the payroll.

I have one client that rarely engages my firm unless it's a "C-level" search and even then - they spend an enormous amount of time trying to rationalize why an internal candidate should automatically get the job.  Pleeease. The time and cycles they go thru evaluating their talent pool is usually wasted time. What they have done over the years by promoting insiders without considering an outside candidate breeds mediocrity.   When you hire a weak person internally, you don't worry about being challenged on business issues.  Remember - they've already convinced themselves that the insider would be PERFECT and more importantly is "ONE OF US" A "LIFER" so to speak.   Huge mistake.

I think it's a great idea to consider an internal candidate for a critical position opening and compare them to the slate of outside candidates. Absolutely! That is a healthy and wise choice to make. You can measure core competencies, leadership skills, historical performance, success metrics, adaption to the culture and many other drivers that let the employer make the right choice. If, by chance, the right  choice winds up being the internal candidate, the hiring manager can take solace in the fact that they did their due diligence, sourced multiple candidates and ultimately made the selection based on comparative data. Without looking outside... I'm sorry - it's biased and in many cases you could do the right thing for the insider and create a disaster for the company. 

I have seen countless examples of great employees that were absolutely perfect for the job they were hired to do. It was the promotion or new job that ultimately caused their career to implode. I always try to get my client to look beyond today's business environment in evaluating a candidate sourced and vetted by our firm. I want them to look at the candidate's scalability to determine how well the candidate will be able to adapt and embrace changes as the company grows. Usually, scalability skills come from experience and past performance.

If I had a critical opening and the future of the department or the company depended on hiring the most qualified candidate - I would always look outward. While it's nice to think that the "diamond in the rough" is in our own backyard...chances are it could just be an illusion. 

Always look out the window and beyond for talent. Even if your hunch that Mr. or Mrs Right is already on the payroll, validate your hunch. Convince others that you were right. You might not ever know, if you have your blinders on..

Did I mention that I feel strongly about this subject?  Didn't think so...         

Editor's Note - This post is part of a Point/Counterpoint series, related to an upcoming article in Workforce Recruiting, exploring the merits of filling key spots internally vs. externally.  Let's call it "FOT Responds", or maybe more appropriately, "FOT Argues".  We'll link to that article when it goes online...

Tim Tolan is a partner at Sanford Rose Associates and specializes in Executive Search in Healthcare IT.  He's a closer, and you really don't want to call him unless you're ready to bring out the bazooka to bag some big game...

Comments

[Paul Hebert]

Can't argue with the logic of looking externally - why limit your search when you don't have to.

I think you also need to consider the fact that in most cases, those that are considered from the internal pool have been trained to do - and rewarded for - specific behaviors. If these are the behaviors that will drive success in the future then you may find your diamond in the rough inside.

However, if the business is moving into unfamiliar territory - the internal candidate may be lacking.

[JasonP]

Well said. I understand promoting internal talent if it's part of a career plan for a certain job profile. But, key positions absolutely should consider outside talent on top of their internal pool. Too much internal promotion can turn into corporate inbreeding. If you keep relying on internal talent, who's going to bring in new ideas? It's basically like recycling old ones.

[Wally Bock]

It seems to me that the always going inside or always going outside are both bad ideas. The key to me is knowing whether you have a rigorous development program that has produced a qualified internal candidate for the open position. There are companies that do quite well with mostly internal promotions, but they all have development and evaluation systems in place.

[Jessica Lee]

my two cents--

i'm on the same page of wally that you shouldn't always go inside or outside. being on the inside myself, i'm of the mindset that you should know who your rockstars are and what their paths hold. if you're doing your OD and really are in tune, then you should already know when you've got someone right for the gig internally when there's a new slot to fill.

that being said, there are definitely times when you just don't have the right person inside to do the gig... in that case, absolutely go external but just don't pit anyone internal against the external candidates. you should know who you have on the inside already and if someone on the inside wants the gig but isn't right, set them free early on and most definitely before the external candidates come in. i think it's extremely demoralizing to give people a chance who you know aren't ready or competent enough just because it's fair.

but can i ask the obvious question? does tim want us to go external because he's a search firm guy? would you exist if we didn't go external? i'm just sayin...

: )

[KD]

Timmy T -

Don't answer this question now, but the classic 3P question I have is this - are most high end recruiters going to hang around and provide service on contigency while a company teeters internal/external? Maybe one time, but they'll wait after that until the company is sure they're going outside...

Like I said, don't answer now, I'm turning it into a post....

KD

[Tim Ruef]

KD: Retained firms don't have to do it on contingency if they're smart. I face this situation all the time - most recently yesterday. The client has an executive director position open in quality operations supervising 80 people. She has two internal candidates but isn't convinced that either is right. She wanted to have a look at some others to make sure she had the right people internally. I explained to her that a good way to go would be to pay the first retainer with a 30 day stop and then take a look at our candidates. If she wants to continue the search, do it, if not stop it. A contingency firm would be useless in this situation - particularly when they found out that she has two internal candidates. Conversely we can provide a thorough, focused, and intensive initiative that will provide the information she needs quickly. With the cost of miss hires estimated to be anywhere between 5X base comp for direct costs and 28 times base when indirect costs are included, she would be foolish not to spend $25,000 to make sure she has the best.

[Joshua Letourneau]

Cool article - I commend you on your delivery as you make a passionate case . . . albeit a misguided one. That's tough for me to say as a fellow Executive Recruiter -- see, there is part of me that would like all clients to believe that talent can only be found outside. Think about it - if we were to perpetuate this falsehood (just like the one us Headhunters push about 'passive candidates always being superior'), we'd all pay off our houses and toys a little sooner.

There is only one problem - at the end of the day, it's just not true. I would make the case that it's not up to internal managers to find the "diamonds in the rough", but rather to develop them. Think about the long-term ramifications on an organization if it was known for looking outside more often than not . . . think about the HiPo retention problem this would present.

Now here is the irony here - I (much like many of you) make a boatload of money due to companies looking outside and often overlooking their own stars - it's natural as the 'grass is always greener on the other side'. Isn't that what the great headhunter trainers teach us? (i.e. to identify and magnify the career wound?, etc.)

At the end of the day, you have to love this business - we live each day infiltrating and covertly impacting organizations that may never know we exist in the first place. We're about the closest thing to the CIA that exists in the business world . . . so the next time someone says, "Oh, you're a headhunter?", tell them you prefer to term yourself a 'Covert Operative' :)

[Tim Tolan]

The comments to this topic covered the waterfront. I wrote the article from a couple of different perspectives. First, before I started in the search business I ran several fairly large sales and marketing organizations and always believed the best approach was to look outside unless I had a superstar. And, yes - there were occasions where I did. It was rare. Even then I looked outside to make sure the company had the very best talent to fill the role. From an executive recruiter standpoint I feel strongly that this is still the right approach.

I have several clients that use my firm from time to time but generally speaking they look inside to see who might be interested and qualified. Maybe so-in-so could do this job. What? Maybe?

They have been breeding mediocrity for quite some time. The internal candidates chosen for the new role have a tendency to consume the corporate Kool-aid and never challenge decisions. They, like their co-workers, have a "that's the way we do it around here" mentality. I will admit that occasionally you WILL find the needle in the haystack but... its rare.

I feel that company's that plan to grow and scale need new blood, a new way of thinking and a different way of looking at the position than an insider would. I'm just saying:-)

[Caryn]

Hello!

I was really excited to find this blog. It seems there are great exchanges happening and I look forward to learning from everyone as well as sharing as much as I can to extend support where I can.

As someone returning to the workforce after some time out for family commitments, can someone direct me to "Best Practices" for the Recruiting Industry. I am starting a home based service and want to make sure I am up to speed and being consistent with current practices.

I welcome everything and anything you might have to share!

Warmly,

Caryn

[KD]

Caryn -

Glad you found us! Tell me more about what you are doing, and I'll be glad to help or find someone on hte team who can, you'll see my email address in my profile.

Thanks - KD

[Edna]

what decisions does a business makes when they have 2 canidates for a job opening. One is within the company, this person is qualified, but they offer the job to an outsider, and he turns it down. They then offer the job to the woman that works in side the company, The problem is she asks them was she their first choice. How would you answer?

[Tim Tolan]

Great question.

In general, I would never disclose who the "top candidate" is - instead making sure both candidates' know they are in the final round. Also, I would ONLY inform the # 2 candidate if/when the candidate selected started work. Playing your cards close to the vest is not always what you want to do - but what you must do to ensure that the client has a qualified person on board to fill the opening. The candidate's gender would make no difference in the selection process as we do not discriminate in any way shape or form.