Growing Your Leadership Team: Promote from Within vs. Outside Hire

Every week we comb through the news to find employment trends affecting the hospitality industry so you don’t have to. This week’s topic: whether to promote from within or find an outside hire when growing your leadership team.  

Growing Your Leadership Team: Promoting from Within vs. Outside Hire

Growing your leadership team can have a huge impact on your business. Not only is finding the right person for the job important, but it’s also crucial to make sure they’re a good culture fit. Managers getting along with your team (and customers) is arguably just as important as their technical experience. With this in mind, is it more beneficial to promote from within or find an outside hire when growing your leadership team? We’ll explore the pros and cons of each below.  

Promoting from within 

When you have managerial hiring needs, sometimes the best candidates are right under your nose. By interviewing current employees who have leadership skills, you may be able to promote from within your current team. This comes with its own set of pros and cons:  

PROS 

• They’re already familiar with your business. By promoting a current employee to a supervisor or manager position, you’ll save time on having to get them trained. They’ll already understand your customer base, employees, and menu. This is beneficial especially if your restaurant or venue is looking to scale the leadership team quickly. 
• Save money on hiring. While it’s hard to determine the actual number, the average cost of hiring a new employee can be over $4,000. By promoting from within, costs related to hiring will be substantially lower.  
• Boost employee retention. Retention is the name of the game in 2021 and is tied directly to engagement and satisfaction. Promoting from within will show your employees that you value your team and will give them something to aspire to (if they have their sights set on leadership).  

CONS 

• Co-worker relationships may cause challenges. It’s a good thing when employees get along well with each other or spend time together outside work. But as a manager, having a close relationship with your employees may pose challenges, like favoritism.  
• The switch from hourly employee to manager may be tough. By promoting from within, it might be difficult for employees to see your new manager as a manager; especially if they have close relationships with other employees.  
• You might have to replace a strong worker. Typically internal candidates are great at their current job. By promoting them to a manager position, you’ll have to backfill their spot on the team.  

Finding an outside hire 

Growing your leadership team may involve looking outside your organization. Whether it’s to find someone with more technical expertise or a different set of soft skills, hiring an outsider can be a great boost to your current team. Like the above, an outside hire can come with its own advantages and disadvantages: 

PROS 

• They bring in a new perspective. An outside hire can bring with them ideas and perspectives that are new to you. It’s important to stay up to date with current trends and ideally this person can help with that. Not only that, but they offer a unique outsider perspective and can share feedback on various aspects of your business. 
• They’ll immediately be seen as an authority figure. Employees won’t see their new manager as anything but an authority figure. When being introduced as a manager, they can set proper expectations with the team.  
• You’ll have more candidates to choose from. When promoting from within, your options will most likely be more limited compared to hiring an outsider. Finding someone new to your organization offers the opportunity to look for the skills you want in a manager.  

CONS 

• Training will take time and resources. As a manager, you need to know just about everything so you can successfully do your job. Training an outside hire will take time and resources so they’re comfortable working on their own. If you have a hire hiring need, taking all the time you need to train may not be realistic.  
• You’re unsure of their long-term success. High turnover is especially prevalent in the restaurant industry, and the first 3-6 months of employment is crucial. Because you hired someone from outside your business, you may find out that they aren’t a great long-term fit. This will force you to restart the hiring process again.  
• It will take longer (for them) to gain employees’ trust. With a new hire, it will take some time before employees are comfortable with them. They may feel like they can’t go to the new manager with issues – whether personal or professional. This can cause a rift in operations until everyone is on the same page.  

When trying to decide which option is right for your business when growing your leadership team, ask yourself these questions:  

Do I have 1-2 current employees in mind who would be a good fit as a manager?
Do I have the time and resources to recruit and interview new leadership candidates? 
What am I looking for in a candidate? Do any current employees have these traits?
Do I have a training process in place for new hires?
What benefits my business more, promoting from within or an outside hire? 

By asking these questions, you can decide the best way when growing your leadership team. Whether you choose to promote from within or go with an outside hire, make sure you take your time to find a great fit for your organization.  

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When growing your leadership team, is an outside hire right for you? Let LGC take the lead. We can help you navigate the hiring process and provide candidates with a range of experience. Contact us today to learn more about our permanent placement staffing services.