Many MSPs aren’t sure what to do when it comes to filling a new role. Sometimes it’s easier to promote someone from within, but not always. There are times when hiring an outsider makes the most sense. Understanding the impact of the decision you make will help you determine the better route for your employees — and your business overall.
There isn’t a one-size-fits-all approach. Examine each new role differently. Your needs as as business owner will vary constantly, so you’ll need to consider the variables. What’s most important is you don’t leave anything on the table by reviewing all options.
Bueller? Bueller? Bueller? Bueller? Take a step back to look at your organization before making any decisions. Review your roster, and ask yourself the following question: “Are there employees I’d be willing promote?” If so, consider all your options.
Promoting someone from within can motivate the rest of your employees to work harder. When someone internally is promoted, other employees take note. Some of them will look at their colleague’s promotion as an opportunity — this can build morale throughout your business. Your employees will then work harder to better themselves.
Can you afford to hire an outsider? Be sure to consider the costs of making an outside hire. Wharton management professor Matthew Bidwell in 2012 conducted a study on external hiring. What he found may shock you: External hires are initially paid around 18 percent more than internal workers promoted into similar jobs. This additional labor cost isn’t just a drop in the bucket for small businesses, especially for IT providers.
Sure, you’ll have to find a raise within your budget to promote from within, but you won’t have to carve out an entire salary. Obviously, you’ll also spend money onboarding the external hire. Think about the associated costs with benefits (if you provide them).
There’s another cost to consider: time. No matter how good the external hire is, there’ll be a learning curve. For example, you’ll have to get the new employee up to speed — and that takes time. Productivity within the external hire’s unit could also decrease because of this. It’ll also take time for the external hire to build relationships internally.
Should you rock the boat? How’s the dynamic within your business? Do you need to shake it up a bit? If so, adding an external hire to your ecosystem could disrupt it — for the better. For example, sometimes we get stuck in our ways; hiring someone new adds a different perspective to the mix. External hires bring new ideas with them. These new ideas stimulate the minds of your current employees — it’s a win for all everybody.
New ideas give way to improvements. If you’re satisfied with how your business is running, then leave well enough alone; promote someone within. On the other hand, if you’re open to an external hire, you’ll see your own business through a fresh set of eyes.
What do I mean by that? Well, external hires ask questions. They’ll even question the way you’re doing things. Sometimes external hires will even find better ways to do things, forcing you to at least consider alternatives. This type of disruption is good for your organization as a whole, and it’ll provide you with a way to audit your procedures.
Making the decision to promote someone from within or hire an outsider isn’t easy. The outcome of your decision will determine the productivity flow of your business. Every personnel situation depends on the variables at hand, so always remember to assess each new position opening differently. This mindset will help you make the right call.