I love this question. I love philosophizing about these things. Playing out the “on the one hand” scenario. I’m one of those weirdos who enjoys playing out possible scenarios in an effort to figure out which might work out the best. Because with this question as with many others the answer is a frustrating one.
This is definitely not a question where one size fits all. What is right for one business may be the worst answer possible for another. Possibly, the most accurate answer that would fit most businesses is that you should mix it up – buy (hire from the outside) some leaders while building (train from the inside) others.
Let’s look at why.
Depending on the stage of the business, leaders hired from the outside may bring much needed and immediate expertise. When a business is in desperate need of marketing or sales for example, they may not have time to groom someone from the inside. Further, experience at other companies and environments proves extremely helpful in a small business or startup environment. Even if the CEO had the time to build leaders from the current staff, if they have only experienced this environment, they may be missing valuable expertise that someone from the outside could bring.
On the other hand….
Nothing says we care about the future of our employees like internal promotions and leadership development programs. The number one complaint from small business employees is lack of advancement opportunities. Any small business who figures out how to offer that is light years ahead of their competitors. Mark my words on that.
What’s more, training existing employees for advancement opportunities eliminates the cultural learning curve. They already understand the business, how things operate and may have even been involved in much of the growth. There will be no time spent getting them up to speed on how thing work. Even showing someone where the bathroom is takes time and existing employees do not need that training.
Growing from within also creates extreme loyalty not found in outside candidates – at least initially. Those employees who have been groomed to take on more responsibility are more likely to stay with the business and not look for those opportunities elsewhere.
When this question is asked of me, I always prefer building over buying if the business has the ability to do so. I think it offers more benefits than hiring from the outside both in the short term and long term.
What do you think? Have you made building talent a priority in your small business or do you find that buying the talent you need for leadership roles is better? I would love to hear about your experience.
Originally published on Acacia HR Solutions Blog.
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