Hiring for IT? Promote from Within or go Outside?

One thing is for sure and that is the need for IT professionals is growing at a faster pace than most all other professions. The US Department of labor estimates that through 2026, industry growth of IT managers will result in a 12% increase or more than 44,000 jobs. In particular these jobs will preferentially appear in industries that are very data intensive; financial, healthcare, and government. This more or less guarantees that you will be faced with the issue of hiring within or bringing someone into the organization from outside if you are affected by any of these industries.

To be strategic about this decision, it is smart to ask two questions of your organization. First, What is the effect on personnel when new managers come into an organization from the outside, versus from within? Secondly, is your organization looking to essentially maintain the same market strategy, and just needs to scale up? Or are you planning a pivot or expansion into new markets? Getting the answers to these two questions right will save a lot of headache down the road.

A recent survey⁽¹⁾ of 1000 currently employed people can provide some useful insights to answering the first question. The direction of the results is probably not totally unexpected; however the magnitude of the reactions may be a little surprising. The headline numbers are:

• 71% of employees believed hiring from within is better for scaling a business.
• Over 1 in 5 employees quit, or considered quitting, after being passed over for a promotion for a peer.
• 1 in 4 employees support hiring managers from the outside when it comes time to pivot.
• 56% of employees believed promoting from within is better for morale.

The takeaway summary of this data is that there is significant internal fallout when new managers are brought in from outside the organization. This report indicates that 66% of the respondents reported a preference to be managed by someone who was promoted internally within their company rather than someone hired from the outside. It is worth noting that a recent Gallup poll indicated that fully half of the people that quit their jobs did so specifically to get away from their manager and improve their overall quality of life. This is a high stakes decision.

There are mitigating circumstances in which employees feel that an outside manager makes sense. The top three reasons that it makes sense, at least according to those who may more closely feel the effects of that hiring choice, are (in order)

• No current employee is qualified for the role
• Leadership experience is limited and needs assistance
• Changes or new perspectives are needed

It may go without saying that if you are in an organization that has any of these three issues, and your employees are keenly aware of it, then you are in a tenuous situation to say the least. It also means that employees will be looking for management to address known, valid concerns when they chose an outside hire. And in that situation, they are more likely to be supportive.

This data would suggest that if you are just looking to scale up, growing your “home team” will give you the smoothest and best supported path. But, your existing employees are also likely to support an outside hire if there is a clear lack of certain critical skills that would help grow the company leadership, and provide better direction. You still need to make sure you are clear about the company direction and justify the outside hire by explaining how this will fill gaps based on the growing needs of the company. A frank assessment and clear communication will help garner respect for the situation.

¹⁾ Promoting Managers From Within vs. Hiring Externally: Which is Better? https://www.joblist.com/trends/promoting-managers-from-within-vs-hiring-externally-which-is-better