Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.

Inside Track: Building an Internal Talent Pipeline

Nicole Fallon

Filling an open position at your company can be a lengthy and frustrating process. After you've narrowed down a few good prospects, which is an arduous task in itself, you still need to coordinate interviews, run background checks and negotiate salaries. Even then, your dream employee could still turn you down for another offer.

But what if the perfect candidate for the job has been sitting right under your nose the whole time? Moving or promoting an existing employee into a hard-to-fill opening could save you a few steps — and risks — in the hiring process.

"Internal hires are generally much lower-risk candidates," said Adam Robinson, CEO of hiring software company Hireology. "Presumably, they are already a fit for the culture and understand the company's core values, processes, customers and market. Further, management already knows who they are, how they work, their skills, etc."

"The hardest part of bringing in someone new is building trust, and once you have it, it's there," added Sara McManigal, vice president of talent at Emma, a provider of email marketing services. "[An internal hire] is not going to go off the reins and make a decision that will hurt the business."

Hiring from within your company benefits your overall culture and work environment, too. Melissa Moore, chief people officer at Mattersight, a provider of behavioral routing software for call centers, said her company has made a commitment to internal hiring, and it's helped the organization retain some of its best talent. [6 Common Hiring Mistakes and How to Avoid Them]

"During our early days, we [brought] in highly motivated team members at entry-level positions," Moore told Business News Daily. "We then offered multiple career paths compatible with the individual's interests and skill sets so that today, as we look around the organization, the majority of our management team and higher-level individual contributors have grown up with our product offerings and our company. There is a high level of ownership and personal investment, tribal knowledge and shared set of values."

Robinson agreed that building an internal talent pipeline should be a priority for companies that want to keep people around. If you're not promoting your current employees and making sure they feel valued now, sooner or later, they'll leave and find a new job, he said.

Balancing internal and external hires

As much as you'd like to promote everyone on your staff, you're not going to be able to rely solely on existing employees. For this reason, Tim Hailey, Mattersight's director of human resources, emphasized the importance of finding the right balance of outside and inside talent for your organization.

"Whether one should hire internally or externally isn't an either-or choice for a dynamic, rapidly growing enterprise," Hailey said. "Our growth demands require that we seek exceptional talent wherever we can find it. The better question — and greater challenge — is how to harmonize the two processes in a way that fits your organization's personality. In our case, we have had particular success with hiring more junior people and providing them with an abundance of organic developmental opportunities."

If your company is just starting out or growing very quickly, McManigal noted that you will have to look to an outside hire to fill in any gaps or provide something that an internal candidate can't offer. But this doesn't mean you have to wait for your company to reach a certain stage of growth before it can begin hiring internally. David Sloan, co-CEO of Naf Naf Grill, said companies of any size can do this right away — the sooner, the better.

"We began the culture of promoting from within at our very first Naf Naf Grill location," Sloan said. "Our first promotion was to a person who began as a dishwasher. He is now the regional manager of an entire market. It doesn't matter what an employee's educational background or experience is, because if he or she works hard and puts passion into what the business is trying to do, the business will invest in that employee and reap the reward."

As the company grows, it's important to put structure around your hiring practices and clearly define roles within the organization, Robinson said. This is a critical step in helping your company and its employees adapt to the changes they'll undoubtedly face as it evolves.

"The 'this is how we've always done it' mentality can get in your way [when you're an internal candidate]," said McManigal, who has been through several promotions at Emma herself. "It's the hardest thing to overcome. [The company] is not the same as it was three, five or eight years ago. It's still wonderful, but it's different. [That's] the challenge of growing internally."

Developing great internal candidates

Figuring out which of your team members to promote or move around begins with truly knowing the people you have on staff. Moore said Mattersight does this by evaluating and learning each employee's personality style, and training everyone to communicate and collaborate well with differing styles.

"By focusing on retaining and promoting from our own ranks, we've built a team with an extremely high degree of personality fluency," Moore said. "Most of us automatically know how to write an email to colleague X or make a presentation to colleague Y in the way they're going to be most receptive to. When outside hires are brought in, they're able to get up to speed on the model and see its value very quickly, because there’s so much support for it."

From there, you should work on developing pathways for each employee to follow should he or she stay with the company. Take a look at each person's skills, background and interests to determine a good trajectory (or two) to follow.

"Sketch out what your employees' career paths will look like — what the role is, the timeline, the rewards, etc.," Robinson said. "This gives your employees a realistic idea of their future with your company [and] provides motivation to work towards a positive outcome."

Finally, businesses have to build a culture of teamwork each day, and make sure its employees know it's a top priority to see them grow personally, Sloan said.

"It begins as a mentality from the top of the company that trickles down to the rest of the business. Higher-level employees have to make the commitment to hiring and building from within," Sloan said. "When employees see that the business is interested in seeing its workers succeed and grow, it will motivate them to pour even more passion and desire into making the business boom."

"People want to work for a company that values development," McManigal added. "It's about knowing your staff and what capabilities they have. [Let them] know that there's value in not only the talent they're hired for, but how [that talent can] grow."

Image Credit: Ahmet Misirligul/Shutterstock
Nicole Fallon
business.com Member
Nicole received her Bachelor's degree in Media, Culture and Communication from New York University. She began freelancing for Business News Daily in 2010 and joined the team as a staff writer three years later. Nicole served as the site's managing editor until January 2018, and briefly ran Business.com's copy and production team. Follow her on Twitter.