To those of you struggling to climb the corporate ladder, you may want to begin thinking about getting your next promotion from another company. To fill management positions, companies are more likely to look for talent outside rather than within their own ranks, a new survey from Robert Half Management Resources suggests.
Chief financial officers (CFOs) interviewed said that, on average, only 38 percent of management roles in their departments were filled by internal candidates, while 62 percent went outside the company.
CFOs were asked, “What percentage of managerial positions within your accounting and finance department are filled by candidates who were promoted from within?”
Paul McDonald, a senior executive director with Robert Half, noted that external searches are essential when roles call for skills and experience that don’t currently exist in the company. However, a continued inability to promote from within could indicate deeper problems, such as inadequate training and a lack of knowledge transfer among staff, he added.
“Consistently bypassing internal staff for management positions erodes morale and sinks retention efforts,” McDonald said. “Organizations that fail to groom future leaders risk losing promising talent to other companies, along with the resources they invested in locating, hiring and training these individuals.”
According to the latest Robert Half Professional Employment Report, 69 percent of CFOs currently report recruiting challenges – an increase from 41 percent one year ago. “A tight market for skilled talent makes it challenging to hire external candidates or replace departing employees,” McDonald added.
The firm offered four tips to companies for grooming the next generation of leaders:
- Begin with the interview – Evaluate every candidate for management qualities and potential, even for non-management openings. Hire with a long-term mindset.
- Expand the review process – Solicit input from other departments when conducting performance reviews. This will give you insight into the employee’s performance and reputation with colleagues outside your immediate chain of command.
- Manage expectations – Be open with staff about opportunities for advancement and what skills and experience they need to reach the next level. Provide clear, honest feedback on a consistent basis.
- Invest in training – Ongoing professional development is a “need to have,” not a “nice to have,” for companies that are serious about retaining employees and promoting from within.
The survey was conducted by an independent research firm and includes responses from 1,400 CFOs from a stratified random sample of U.S. companies with 20 or more employees.