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IT hiring strategy: Groom talent within or hire from outside?

If you're wondering, 'Should I groom IT talent from within or hire from the outside?' both paths offer risks and rewards.

In hiring strategies, IT leadership often faces critical questions about how to hire to gain talent or even for succession. CIOs and other IT hiring directors often wonder, "Should I groom talent from within or hire from the outside? Which path will yield the essential skills I need to run IT operations reliably and for growth?"

These questions became acute interest to me lately, after I lost a key member my team. He believed that he was overqualified for the position and found a promotion elsewhere, despite the fact that he had been at my company for less than a year. I had purposely hired him because his experience, which was critical for dealing with the many challenges we faced, and that paid off: He made great progress in a short period of time. I also wanted to groom a successor for the CIO job, but now I have to revisit that strategy as well.

Prior to this, I took a chance by promoting internally for the same position. I chose someone on staff who had natural leadership qualities, demonstrated a strong work ethic, was loyal to the company and, of course, had solid technical skills. In other words, I harvested from our internal talent. But surprisingly, this person got consumed with day-to-day fire-fighting, didn't delegate well and devolved into what he did best prior to his promotion -- only more frantically. He couldn't see the forest for the trees. His answer for most problems was "We need more resources." I tried getting involved to show him examples of how to deal with various problems and to coach him in the process, but that didn't work either. Hiring from within didn't yield a hire who was strategic and clear about how to exploit our technology to meet the goals of the business.

So, I concluded that the position required experience rather than talent. I needed someone who had done the job before. I needed someone who could fix persistent issues by looking at things at a higher level, and bring his own bag of tricks to solve the problem. But you already know how that ended up.

My lessons learned after both a promotion and a hire failed to work out:

  1. Looking for people with "too much" experience is not in your best interest. Consider a scenario where you would take a new job doing what you did 10 years ago. Of course you'll do that well: You will see things coming miles away. You know how your boss thinks and what he expects, because you've held that management position too. But you also know you can do more, so there is not much of a challenge, and you will soon start looking for something where you can use all your skills. Your boss may like your competence, but it's just a matter of time before he loses you.
  2. Spend time with your hire if you're promoting talent without experience. The standard Wall Street disclaimer applies: "Past performance is no guarantee of future results." No matter the circumstances, a promotion is always a fundamental job change. As such, it requires different skills. You wouldn't offer a programmer job to an accountant with superb Excel skills and expect that everything will magically work out, would you? It takes training to build new skills.
I support the decision to promote internal talent. My career has largely been a result of people taking a chance on me.

Same goes with management, especially at higher levels. If you're promoting someone who doesn't have a lot of experience managing, approach it as a personal project. Be prepared to put in a significant amount of time to develop the experience and leadership skills in the person you choose for the job. This is perhaps best done when things are going well, not when you have a fire to put out.

To be clear, I support the decision to promote internal talent. My career has largely been a result of people taking a chance on me. This practice keeps the team motivated and sends the right message throughout the company, and it's the most cost-efficient way to fill positions. The point is that there are risks involved, and it requires a time commitment to groom, nurture, and sometimes redirect that internal promotion to think strategically and make solid decisions based on business requirements.

As far as my recruitment challenge, my next step is to try a hybrid strategy, striking a balance between experience and talent (promotion): I am targeting candidates with lots of experience on the job, but in smaller companies. Generally speaking, larger companies like mine can afford better and more diverse technology, employ larger teams, and offer more opportunities. The assumption here is that candidates from smaller companies should find these aspects of larger companies challenging and motivating, and perceive a move to a larger company as a promotion.

I do this strategy is not without risks. Smaller companies are more nimble, fast and not as "siloed," which tends to breed professionals who enjoy working in an entrepreneurial, non-regulated environment, quite different from that of larger companies. But I'm hoping this will be an easier adjustment and consequently lower risk, compared to having to develop leadership skills from scratch, or hiring an overqualified candidate who is likely to be a flight risk.' 

If you have other strategies to deal with the "hiring experience vs. promoting talent" dilemma, please post your comments below this column.

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Do you prefer to promote from within or hire for experience from the outside?
Depends on the position and how critical the immediate needs are. Hiring from within can be a plus as they have a smaller learning curve on company policies. They may already have the departmental communication skills and know where there may be roadblocks. Hiring outside may get a stronger candidate to resolve the needs quicker but you take the risk that they may not have the longevity of the promote from within employee. 
In my opinion hiring from within the organization is a good way to boost morale. I have built enthusiastic and loyal employees for my company this way. However, there is a time when the role requires a highly competitive professional with vast experience. During such times, we prefer to put both our internal and external applicants on the stage to compete freely and fairly. This is important for benchmarking on the organizational talent pool.
This depends entirely on the skills required and the timeline for the need of those skills. From my own experience, by the time it takes to recruit interview, second round, offer, confirm, onboard and bring up to speed a new employee, three months or more could elapse. In those three months, someone internal could have learned the skill in question, implemented it, and gotten farther along than would be achieved with a new hire. The more advanced the skill or the time required to develop proficiency, the less comparable this is, but for many skills, developing the talent in house vs. hiring outside makes more sense.
Both approaches may work. Depends on the constrains.
The article seems to be stressing on long term retention.. but with project-based nature of IT turnaround is inevitable.
Harvesting from internal talent is the best strategy. You will have to gauge employee work ethics, technical skills and should be loyal to the company.
Except for rare circumstances, I'd strongly suggest building your company staff from its internal talent. Unless you're (1) in desperate need for some special knowhow that doesn't exist in your company or (2) just dead set on creating a hostile work environment.

There are, of course, times when you have little choice but to bring in a bit of exceptional outside smarts. You can't possible train for every eventuality. But for the most part it's just smarter and more cost-effective to nurture your own talent pool.

When your IT talent trains those who know a bit less, when everyone knows they have a real chance of advancement, all your workers become shareholders in the company. That's a win/win situation for the staff, management and stockholders.
You need a combination of both.  Fresh blood brings fresh perspectives, but loyal blood should also be cultivated, because it understands history and culture better.
Exactly. A good combination of both is the key.
From my own experiences, it is much easier to groom and develop internal talent than it is to hire someone from outside to meet that need, if time is the requirement of greatest importance. While we certainly can get someone who is expert at a skill that we are currently not knowledgeable about (and that may make sense to hire externally) the odds of getting someone in the company and up and running on everything else that defines the company and its culture/operations faster than getting an internal person up to speed on the new technology is small. Granted, that's just been my observation, and yes, if the choice is between hiring an expert in a given domain vs. bringing someone up with no knowledge at all of what the system entails, that's a different story. Given similar dynamics, though, I'll put my money on the person already there meeting the goal faster than an external hire.