Engaging in internal promotion ensures that star performers feel valued, recognized, and highly motivated. But despite the many benefits of internal promotion, too many companies fail to effectively engage in this practice. Roughly half of U.S. employers plan to hire from within to fill job openings—and the rest might be missing out on the significant benefits this can bring.
In this article, we’ll discuss how to implement and maintain strong internal promotion programs. We’ll also explore how to measure the success of such processes.
Table of Contents
- Benefits of Internal Promotion
- The Role of HR and Managers in Internal Promotion
- Creating a Successful Internal Promotion Program
- Measuring the Success of Internal Promotion Initiatives
Benefits of Internal Promotion
Promoting internally brings all of the following benefits for individuals, teams, and organizations as a whole.
Increasing Retention and Satisfaction
Perhaps most notably, internal promotion boosts retention. In fact, employees stay 41% longer at companies that actively promote existing employees. When people know you’re prioritizing them for advancement, job satisfaction rises, along with team morale.
Further, employees are 66% more likely to want to be supervised by an internal hire. So, hiring leaders internally can increase satisfaction and retention among whole teams.
Employees will also feel more driven and engaged by the chance at internal promotion, as it will incentivize them to learn and grow.
Improving the Quality of Hires
Internal promotion also ensures that the people you hire for more advanced roles thoroughly understand the business. They’ll have a stronger grasp of the organization’s values, strategy, culture, and team norms, as well as the roles of the people they manage.
Lowering the Risk and Cost of Hiring
Additionally, internal promotion reduces the risk and cost associated with hiring. If you promote internally, there’s less chance of hiring an employee who’s a poor fit for the role or company. You can also save on advertising and recruitment costs. Plus, you can minimize the time required to fill the role by engaging in strategic planning.
When to promote internally vs. hiring externally? There are cases when hiring externally makes sense, and HR needs to understand how to make that call. Here are a few situations in which an external hire may be the right choice:
- You need someone with a specialized skill set that takes a long time to develop, and no existing employees possess it.
- You need to increase the diversity of your organization.
- You want someone who can shake up the status quo, lending fresh perspectives.
- You want a leader with proven experience in a specific type of organizational transformation.
Of course, you can also work to predict skills gaps and then fill them by training current employees. (Do this well before a critical need arises.) And you can work to hire a diverse employee base and encourage everyone to take advantage of training opportunities. This will position you to hire diverse managers and leaders from within. Many of them will likely bring innovative ideas and insights that can steer your company in exciting new directions.
The Role of HR and Managers in Internal Promotion
HR and managers each play a key role in making internal promotions. Let’s explore the distinctions between their roles.
The Role of HR
HR leaders are responsible for designing and implementing policies and processes guiding internal promotion decisions. This includes developing and maintaining an internal job-posting system, as well as preparing employees for advancement by providing resources and training. HR should work to facilitate an equitable application and selection process that complies with all relevant legal and company policies.
Further, HR departments should review performance data, and the results of appraisals, to identify candidates for particular roles. Sophisticated performance management solutions can analyze data from such sources, as well as 360 reviews, to glean these insights. Finally, HR should keep accurate records of employee development and promotional decisions, so they can evaluate the success of these policies and processes.
The Role of Managers
Managers have an important role to play, too. They should directly encourage employee growth and development by providing regular feedback and mentorship. In doing so, they can identify and support high-potential employees.
Further, managers should strive to instill a culture of learning and development that prompts people to embrace new opportunities for growth. Importantly, they should communicate promotional opportunities to their team, encouraging individuals who are a good fit to apply. Finally, by conducting fair and objective performance evaluations, managers can play an instrumental role in assessing employees’ readiness for promotion.
Creating a Successful Internal Promotion Program
Now, let’s discuss the key steps to implementing an effective internal promotion process.
1. Design Organizational Policies
Strong organizational policies will support an equitable promotion process. You could set a policy of sharing all job postings internally for a specific period of time before opening them to the public, for instance.
Further, establish a structure for your internal promotion decisions. As with external hiring, require internal candidates to submit an application and undergo a series of interviews. Instead of making a hasty decision based on intuition or preconceptions, you’ll then be following a rigorous process that will help you select the best candidate.
Within this process, you can also solicit nominations by managers, as the Society for Human Resource Management (SHRM) notes. However, don’t make nomination a prerequisite; otherwise, favoritism could lead to bias in the promotion process.
2. Launch an Internal Skills Marketplace
Take an inventory of your employees’ knowledge, skills, and abilities (KSAs). Then map them out in an easily accessible database that leaders can review when making promotional decisions.
As Gartner explains, you can use a combination of self-assessments, 360 reviews, performance appraisals, and other data to glean insights on each employee’s skills. Employees can create their own KSA profile, as SHRM recommends, and then you can enhance it with such data.
Job-matching algorithms, or AI tools, can also point employees toward relevant jobs (or highlight appropriate candidates). These tools can use your skills inventory to make recommendations.
3. Discuss the Potential for Promotion with Each Individual
During one-on-ones, talk with each employee about the types of advanced roles that might fit their skill set. Guide them in upskilling to prepare for such opportunities. For example, offer leadership trainings for anyone interested in supervising others. HR should connect each person with a mentor who can support their growth as well.
Create a career advancement map with each employee, detailing key steps and the training needed to reach them. Overlay key touchpoints of the employee journey onto this career map, as John Hall writes in Inc. These touchpoints can include milestones like work anniversaries and completion of training programs. During these moments, revisit career ambitions and next steps.
4. Assign Projects That Showcase Their Skills
Provide each person with a platform to demonstrate their strengths. Assign them to projects that let them apply new skills or abilities, for example. You could also ask them to share a report-back on a project with senior leaders, conduct a training, or lead a high-profile initiative. Such projects will serve as a proving grounds for talented employees, while also helping them build confidence. Share lots of praise as they achieve bigger accomplishments, which will motivate them to reach higher.
5. Share Job Openings With All Employees
Offer a job listing with a detailed description for any open position. For instance, if you have an internal website that employees can access, post it there. Share it in a company-wide email as well, for good measure. And remind managers to tell their teams about these openings.
Provide contact info for the position, too. Encourage employees to reach out to an HR manager to discuss the requirements and responsibilities further. This will expand access to insider knowledge about what the position entails.
6. Approach Employees Directly
Reach out to anyone who might be a good fit for an open position. After identifying such employees, HR can encourage them to apply for such roles. HR can also urge managers to approach their direct reports about opportunities that suit their skill set.
7. Highlight Internal Promotions
When you make an internal hire, spread the word through company newsletters, emails, social media channels, or your website. Describe the specific qualities and credentials of the employee you’ve promoted, so others understand why you made that choice. Spotlighting internal promotions will enhance morale, increase transparency, and encourage other employees to strive for advanced opportunities.
Importantly, this approach contrasts with a rigid approach to succession planning. While you can—and should—still engage in succession planning, avoid grooming just one individual for a particular role. Instead, encourage any employees with the right qualities and background to build skills that will prepare them for such positions.
Measuring the Success of Internal Promotion Initiatives
By establishing benchmarks and goals, tracking metrics of success, and assessing promotional decisions, you can evaluate the success of your internal promotion process.
Benchmark Data and Set Goals
First, benchmark your internal vs. external promotion rates. In other words, calculate the percentage of internal and external hires for advanced positions. Next, set a target internal promotion rate that will improve upon your benchmarked rate.
Track Key Metrics
Maintain data on the rate of internal vs. external promotions. Track other key metrics as well, like retention rates and employee satisfaction. These KPIs will help you evaluate the far-reaching effects of your internal promotion process. Conduct anonymous employee surveys to gather feedback on satisfaction, engagement, and motivation. Primalogik’s software allows you to easily share surveys on such topics, providing suggested questions in a user-friendly format.
Assess Decisions
Evaluate promotional decisions, too, analyzing your data to identify areas for improvement. Track the success of internal vs. external hires, and review the criteria used to make these decisions. Through this process, HR can assess whether any bias has influenced these choices and work to eliminate it.
By tracking these key metrics, you can continuously refine the internal promotion process. Morale will rise as employees see the results of your efforts, which will have a positive effect on retention and engagement. As you continue to measure and track your internal promotion process, you’ll also enhance the quality of your hires for every position.
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