Promote or Hire?

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I hope that you are finding these what if human resources scenarios helpful. Here is the next one that is very common today:

You need a new person in management.

The first candidate already works for your company. This person is extremely hard working, has the respect of the other employees and is considered a leader. People already come to him to find out how to do a project and look to him to solve the problems.

The second person is straight out of college and just got a degree. However, this person does not have any real work experience. The only job this person has held is working for his father.

In many big companies today, the second person would actually have a better chance at the job and would be offered a higher rate of pay that the first one. Many companies look to get people fresh out of school so they can be trained the company way.

The problem of course is this second person has no work history. You cannot tell if this person will have a good work ethic. You cannot tell if this person is book smart but has no common since. In addition you will have to spend more money training the person.

The problem with many large companies these days is that they will hire from outside the company and pay that person more than someone being promoted from within. That creates a cycle in many industries such as retail where people will leave company A to move to company B because they will be paid better than getting promoted by company A.

In the long run you have a drain of talent and higher training cost because you are loosing good people that should be promoted and hiring unknowns from the outside world. Of course many people will look at this scenerio and go that makes no sense and it doesn't.

Once again this is where smaller and small businesses have an advantage. You do not have the archaic hr systems that make this illogical situation common place. If you have someone in your business that shows the talent for the position then you should promote that person and give them the pay that encourages that person to stay long term.

There will be times when you have no one qualified for the position, then you look to hire from outside. The most important aspect of this situation is to get the best person for the job. The person that will benefit your company and help take you to the next level.