When should you recruit versus developing existing staff?

It is fabulous when everything seems to be humming along with your team, they are working well together, have a good understanding of their role and business and are motivated and engaged. But then someone resigns! This can throw a real spanner in the works if you haven’t planned for it. By having meaningful succession and talent planning and robust career and development planning processes you are able to better plan and be prepared for these situations.  This will help inform your decision to recruit externally or promote someone internally that you have already identified with the right skills and experience. 

This article will look at the two options to filling vacancies when someone leaves your business, or a new role is created:  recruiting externally or hiring from within. 

Recruiting externally

There are a number of reasons to recruit externally, there are times when you need some new talent to bring new skills and different organisational experiences, so it is important to find the right balance between hiring new employees and promoting current employees.   You will usually assess each role as the vacancy arises.   Existing business challenges can sometimes be solved with new ideas, so recruiting a fresh set of eyes who can look at the role and business in a different way may be the right solution.

A clear and known recruitment policy will assist you in hiring right. By this we mean hiring not only the right person with the necessary skills and experience, but also the candidate with the right cultural fit – this is just as important.  The selection and interview processes play a big part in hiring successfully and ultimately retaining these employees.

if there is a vacancy for a highly specialised role, you should consider the effort and resources needed to train an existing employee versus hiring a new one who already has the essential skills. It may be easier and more cost effective if you run a recruitment process and find an external resource.

Hiring from within

Many leaders think of recruitment as the only option when someone resigns, if you are a smaller business this may sometimes be the case, however in medium or larger businesses there will often be an internal option.   A recruitment policy that consider hiring internally before looking externally is recommended.

Employees who are given training, development and have a career path defined for them, are more likely to stay in your business.  The cost to hire is huge, according to Employment Hero, the average cost of a new hire can be anywhere between $3,500 to $5000, with executive roles being much greater than this.  Then you have the expense and time it takes for the new employee to be trained and learn their role and business. So, this is a significant reason to focus on developing your staff where possible.

Look at the way you support and engage your existing employees. Support them with internal training and upskilling opportunities, which will have a positive impact on the culture and overall employee engagement.  When employees feel challenged, supported and that their company invested in their growth and career, engagement is higher, and turnover reduces. 

As part of your succession planning process you should consider which roles are the hardest to hire and invest in developing employees with these skills so that you have options. Ideally for some roles you will have a successor who is ready or possibly ready in the near future already identified in your business.  This is also the case where there is a skill shortage and you know that skills are really hard to recruit in the market. 

Looking to unite your team? Reach out.

Whiteark is not your average consulting firm, we have first-hand experience in delivering transformation programs for private equity and other organisations with a focus on people just as much as financial outcomes.

We understand that execution is the hardest part, and so we roll our sleeves up and work with you to ensure we can deliver the required outcomes for the business. Our co-founders have a combined experience of over 50 years’ working as Executives in organisations delivering outcomes for shareholders. Reach out for a no obligation conversation on how we can help you. Contact us on whiteark@whiteark.com.au

Article by Phoebe Reid