Does Your Next Senior Executive Already Work Here?
Senior-level hiring can be essential to driving growth, innovation, and productivity within your company. According to the Society for Human Resource Management (SHRM), a high-performing executive can add millions of dollars to his or her company's bottom line. Yet identifying the right talent at senior levels can be difficult for recruiters and managers alike. Bringing in outside executives has its challenges, for example: cultural fit, team dynamics, and the ability to build a shared high-level strategic vision for the company. However, identifying internal talent for a senior-level position brings its own difficulties. Should HR departments look within for their next executive, or search beyond their business?
Internal Versus External Recruiting
When a senior-level or executive position becomes available at your company, management faces a tough question. Do you promote from within or look outside the company for leaders with fresh perspectives and wider experience? Internal promotions have their benefits. SHRM reports that internal hires retain previous knowledge, already understand the culture, and get up to speed more quickly. However, companies that are growing quickly, expanding into new areas, or facing a talent shortage simply may not have the in-house candidates needed to fill open senior-level positions.
SHRM also claims that the question of "do we build it or do we buy it" is obsolete. They say that to meet their talent demands, evolving companies have to incorporate both internal and external hiring. External hires can be as much as 20% more expensive than their internal counterparts.* However, external talent can contribute expanded networks, new client contacts, a fresh perspective, and new skills and areas of expertise to growing companies. As you develop the talent management component of your human capital management strategy, it's important to weigh both the costs and benefits of each sourcing strategy.
Focusing on the Right Metrics
One of the most important factors of a successful hire, especially at the executive level, is focusing on the right hiring criteria. Factors such as years of experience, education, the branding quality of affiliated institutions, and past job titles matter, but they don't tell the whole story. Instead, SHRM emphasizes the importance of focusing on cultural fit and ability to do the job. Ultimately, the real value that a senior-level hire will bring to the company extends from their ability to be productive and "gel" with the broader team. Consider focusing on these areas in the initial job posting, interviews, and reference checks, as well as your internal discussions about the candidates.
Senior-level hiring can affect every layer of your organization. Make bringing in the right talent a core focus of your human capital management (HCM) strategy and talent management plans in order to hire someone with the talent and experience to help lead your business toward greater success.
*Wharton School professor Matthew Bidwell via the Society of Human Resource Management (SHRM).