From my previous blog (Promote or Hire) you know by now that I have a bias towards promoting talent from within. In my experience, which is also backed by research, employees that have been promoted within the company are most likely more successful and cost you less.
So why would you go outside and ‘buy’ talent from the market? Apart from obvious reasons, such as individuals in the company don’t have the specific skill set you are looking for or that nobody can be released (which in my view is always debatable), there are a couple of reasons that justify buying from the market rather than looking for a candidate within the team.
The most important are:
- Outside – In
Let’s start with the easiest one; If your organization is likely to expand in the future, then of course the decision to look outside and buy talent from the market is pretty straightforward. As the company grows, you don’t have to worry too much about the impact on current employees as they will get enough opportunity to grow in an expanding organization. Engro Foods has been a great example of this approach. They continued to recruit people from the market, whilst at the same time they accelerated the career growth of their existing team members over the past 5 years.
A shift in strategy could be another reason to buy talent in the market. If you have concluded that your past strategy will not get you to your future goals, you most likely have to invest in building new organizational capabilities. These capabilities could be anything from specific functional skills or the ‘secret sauce’ that defines your competitive advantage. It is very likely that your current team does not have these capabilities and therefor you will have to look for talent outside. Obvious example are diversified business groups like Nishat and JS that have limited food / agriculture / retail experience are now moving into the food industry.
An external recruit is often brought in to provide an ‘outside-in’ perspective. If your company is like Unilever, then your management positions are mostly filled through talent that has come through the ‘system’. While that has a significant advantage it also implies a number of dangers. Most importantly, that people will think and act alike and not be able to see things from a different perspective. A new recruit will then allow you to bring new ideas to the table.
Related to this is, of course, the business rationale behind increasing the diversity of your talent pool. The biggest stick in the mud is the absence of senior female leaders in our part of the world. We have to make a significant commitment and a huge effort to find and hire (female) talent to increase diversity in the team, helping to ensure we bring more points of view to the organization and with that improve the quality of decision making.
Finally, you can use external recruits in an effort to impact and change the culture of an organization. Of course no ‘one-man’ can change a culture, but as long as the person is appointed in a position of influence and is supported by the power structure in the organization, there is opportunity for change. This will only work if your external hiring is one of the elements of an overall cultural change program, in which current employees are also guided in what is expected of them and what is in it for them (but that brings up the topic of change management and that will require a few future blogs!)
So keep on hiring but make sure it is for the right reasons!
– Paul Keijzer