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Hiring for Retention and Promotion

“Hiring for Retention and Promotion”

Place emphasis on internal succession planning, so the employees you mentor will be motivated to stick around for a long time.

OVERVIEW [top]You’ve heard the mantra endlessly. No single asset is as critical to a fast-growing company as its employees. And you have likely given a lot of thought to how you treat your valued employees on the job. But many businesses that win high marks for their personnel policies — everything from flex time to generous benefits — may still not have a plan in place to keep and promote employees for the long term.

You may be focused on next month’s financial statement, but your employees are always thinking about their future careers. You need a talent strategy to both satisfy your workers and keep a strong group of key employees ready to step into important positions as your company grows.

In this Quick-Read, you will find:

  • Steps for creating an internal promotion strategy


When building your management’s bench strength you need to consider first what your long-term needs will be. That starts with looking at your current hiring strategy. To make sure your hiring strategy fits your business situation, ask yourself:

  1. Is your company going through rapid growth? If so, you will probably need to look to people outside the company to fill your growing ranks.
  2. Is your company consolidating? When consolidating, you want to keep your very best employees, showing them how they have a future in the smaller, nimbler organization.
  3. Is your company trying to renew itself? Again, bringing in fresh ideas from outside the company may be the best solution.

How you answer those question will tell you whether your hiring strategy fits your business strategy. It will help you decide how many people you will need in the future, and what jobs you will need them to do. Then you must think about what sources will fill that employee pipeline:

  • Recent university graduates?
  • Professionals working for your competitors?
  • Retirees who may want to return to work?

In your hiring strategy, don’t forget to think about new blood. While you want to promote existing employees, you also need new thinking. Paul VanKatwyk, the manager of succession management services for Personnel Decisions International, suggests setting a ratio for existing talent to new talent, say 70% internal and 30% external, depending on your business strategy. “It’s not good succession management if 100% of the people come from inside,” he says.

The next step is to define the kinds of people you need. In order to understand this you need to ask yourself:

  • What skills will they have?
  • How accomplished will they be at those skills?
  • What does an employee look like who can move up into another position in one to three years?
  • Should they be independent thinkers? Implementers? Planners? Managers? (Don’t expect to get all of these types of people in a single package.) One way to assess the skills and potential of candidates is through pre-employment testing.

Once you know where the company is going and what kind of people you need, the third step is to assess the current group of employees you have. You will want to know:

  • What do they want to do in their jobs? What do they want to learn?
  • How well do they learn?
  • How many are ready to advance?
  • How many still need training? Make sure you tell your employees what they need to do to advance within the company, and help them achieve those goals.

To accurately measure the skills of your employees, you need to evaluate each person who has the potential to move up within your organization. If the employee is not working with you directly, get that person’s supervisor involved in the evaluation process. In some cases there are prepackaged assessments you can use to help you understand an employee’s strengths.

Now that you know what you have to work with, the fourth step is to develop your employees. Give them the tools and resources to help them grow. That might include:

  • Providing mentors.
  • Providing education both in and out of the company.
  • Providing hands-on, real-world experience.
  • Assigning projects that stretch comfort zones.

“Don’t be afraid to challenge and stretch them, but not so much that you make them fail or drown,” says VanKatwyk. Each person will have a different learning style. Some like to observe, some prefer hands-on experience.

Make sure you hold your employees accountable for their own education. Let them know where you want them to improve and then give them the opportunity to learn what they need to know.

Finally, draft a system that integrates all of these steps:

  1. Evaluate your long-term business strategy.
  2. Decide what kinds of talent you need.
  3. Look at what you have.
  4. Give your employees the tools to become what you want.

Not all of your employees will be good candidates for advancement. For instance, you may not want to lose your best engineers to upper-management positions. So your talent management plan must include ways to satisfy those employees right where they are. What do they value? Extra training? Sabbaticals? Make sure they don’t feel like they’ve been passed over as they see other employees advance.


Ray Berardinelli shaped the high-tech public relations firm he started in late 1998 around planning and people. His company, New Venture Communications, already has a professional development program in place. Unlike many service firms, the company is also guided by a business plan that every employee reviews regularly.

Managing people as the company grows is a daily focus. The company started with six employees and in less than 18 months has grown to 20 employees. Berardinelli expects to be a 50-person firm by year five.

To constantly advance his employees, each new hire has two mentors: a peer mentor, who helps the new hire understand the fundamentals of the job ahead, and a manager mentor, who provides constant feedback on performance. All job descriptions are posted in public folders and include benchmarks for self-assessment.

“We keep them moving along by giving them opportunities beyond where their comfort zone might be,” Berardinelli explains. “If someone wants the opportunity to do something they’ve never done before, we encourage them. In the old days of PR, back in the ’80s, you didn’t pitch a story to Business Week until you’d been there for five years. It’s part of management’s responsibility to take people with potential and give them more rope. And I learn things from the newest hire because he’s doing things intuitively that I may not do.”

As the company grows, Berardinelli plans to create small groups or cells of four to five employees, each made up of new blood and experienced staff. He believes the small groups will be ideal for sharing new ideas, as well as the company’s established “secret sauce” and experience.

DO IT [top]

  1. Work with your human resources department or an outside firm experienced in employee succession to do an assessment of your human resource needs for the near- and long-term.
  2. Assess your current work force to see how they measure up to the tasks ahead. Consider using some of the packaged personality/skill assessment tools available. See the resources for a list of companies providing assessment services.
  3. Make a list of employees who are good candidates for advancement immediately, in six months with training, in one year with training, and if need be, in three years with training.
  4. Make a list of places to recruit actively. If they are local professional organizations or university campuses, create a networking plan that connects you and your senior managers with those organizations.
  5. Make a list of the training employees will need to advance. Check local universities and community colleges to see if their curriculum meets your needs. In many cases, community colleges will design specific courses for your company. You may also consider creating an in-house “university” with a group of classes designed specifically for your business.



Effective Succession Planning: Ensuring Leadership Continuity and Building Talent from Within, 2nd edition, by William J. Rothwell (AMACOM, 2000).

Built to Last: Successful Habits of Visionary Companies by James C. Collins and Jerry I. Porras (HarperCollins, 1994). Chapter 8, “Home-Grown Management,” pp. 169-184, presents cautionary tales of disasters due to hiring CEOs from outside rather than from within companies.

Leadership Engine: How Winning Companies Build Leaders at Every Level by Noel M. Tichy (HarperBusiness, 1997).

Internet Sites

Personnel Decisions International, 800-633-4410; Paul VanKatwyk, manager of succession management services

Training Forum

American Society for Training & Development (ASTD)

Get Promoted Without Promoting Yourself

How to Hire the Next Michael Jordan

Assessment Services

Accord Management Systems, Bill Wagner, 805-230-1010

The Omnia Profile, Barbara Bauer, 813-254-9449 or 800-525-7117

Wonderlic, 800-963-7542

Predictive Index, Rick Sweeney, 817-498-5934

The Institute for Personality and Ability Testing, Inc. (IPAT), 800-225-IPAT or 217-352-4739

Article Contributors

Writer: Kathy Watson