Creating a Culture of Growth: Too many employees already feel they are in dead-end jobs with little upward mobility. They’ve performed well and constantly see their organization bring in “professional” managers or outside experts who then change their processes and culture. They forever feel as though they have to prove themselves yet again to a new manager who doesn’t know what they’ve already done for the company. Continuously starting from ground zero is frustrating. However, placing current employees in positions of leadership creates a culture of growth and demonstrates to other employees there are opportunities and career paths inside the company. It will make them work that much harder.

It’s Usually Cheaper: In addition to the benefit of creating a culture of opportunity, it is proven that is usually less expensive to promote an existing employee than bringing in an outside expert. Everyone looks for big pay increases when changing companies; however, the percentage increase is usually less when promoting an individual. While employees do expect a salary bump whenever they receive new responsibilities or an upgraded title, they most likely will be more satisfied at a lower salary than someone who is being recruited for the very same position. They feel as though the company is rewarding and recognizing them and that goes a long way. Also, not paying a recruiter or executive job search firm is a big nut to save.

It’s Usually Quicker: In addition to being less expensive to promote from within, it is also faster. There is always a red-taped filled protocol to hiring outside the organization. The job opening has to be approved. The position has to be posted or communicated to a recruiter. Multiple department heads usually have to be involved in the interview process because the position touches many stakeholders. Organizing all these schedules takes time. Then there is the offer letter and the back-and-forth negotiations, followed by the targeted candidate having to wind down his/her current role and decide on a start date. The process can take months—many months. During this time, progress is stinted because many people know change is coming but they don’t know in what form.

It Makes for a Smoother Transition: Even after finding the right candidate, the person needs time to “ramp up,” or get the lay of the land. This usually involves figuring out exactly what each one of the person's direct reports do, learning the strengths and weaknesses, and navigating through the corporate culture of various departments. This takes time and delays the individual from making an impact. Promoting someone inside your organization creates a smoother transition as that person already knows the inner functions of the company and probably already has a good handle on who does what, what is working and what is not. There is always going to be a transitional period, but it will be drastically reduced.

Calming Fears: Change is not easy on most people. That said, all organizations constantly are looking for cheaper, faster and more efficient ways to operate. Employees understand that. They may not like it all that much, but they get it. Bringing in outside managers causes a lot of fear and anxiety for many workers because of the uncertainty it brings. Uncertainly is bad for productivity. At least when an employee is promoted from within, assuming he or she has earned it, the move automatically brings more comfort to the changes taking place. The acceptance is usually faster and productivity is maintained. Employees feel more secure and know what to expect, to an extent, because they have worked with that individual in some capacity already. It eliminates a big chunk of fear, uncertainty and doubt.