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As your small business grows you find the need for more leaders in your enterprise. This gives you two options:
- Promote from within
- Hire external candidates
Your initial thought is to pick the second of these two options, yet the first one can be far more beneficial. Your small enterprise will gather many advantages when it promotes existing employees to leadership roles, including the three mentioned below:
They Know The Company Well
You might find highly talented people outside your company who’d easily slot into leadership roles. However, they lack something your current employees boast: a deep understanding and knowledge of your business.
Promoting from within means you elevate people to leadership roles who know your company well. They worked hard getting it off the ground with you, meaning they’re perfectly placed to make better decisions. More to the point, you know these people are embedded within your company culture, so they’re constantly working to improve your business, rather than for personal gain.
It Saves A Lot Of Money
Do you know how much it costs to hire new people from outside your business? The recruitment and onboarding processes are expensive, so it helps if you can save money wherever possible. If you promote from within, you may need to spend a bit of money on a leadership workshop, but that’s it. You won’t need to pay a recruitment firm or deal with onboarding costs; it’s far more cost-effective.
Every penny makes a difference for small businesses, so this is a smart way to cut costs while moving your business forward. There’s no negative side to saving money here, so it feels like a no-brainer!
Sets A Strong Precedent For The Rest Of Your Employees
The first two arguments are powerful in their own ways. Having leaders who know the company well and saving money are two critical things to focus on. With that being said, this point is debatably the most important.
Promoting from within sets a strong precedent for the rest of your employees. They now know that, if they work hard enough for your business, they could get promoted. You’re making a career ladder appear and this inspires something every business owner wants: loyalty.
Current and future employees will be more loyal to your company as they see a way for them to progress in their careers. They’ll climb the ladder with you and become part of this amazing journey. If you hire new people for leadership roles, what kind of precedent does that set for your workforce? It shows them that their work is meaningless as you’ll always bring in new people to fill the bigger roles. Promotion from within inspires better employee loyalty and reduces your turnover rate year after year.
In other words, you should be promoting from within if you have vacant leadership positions. Reward those who work hard for your business and you’ll be rewarded with their loyalty and expertise for years to come. Cost savings are a bonus, and you benefit from keeping people who know your business better than most.
