Promoting from within can mutually benefit the business and its workforce. Internal promotions have the benefit of preserving institutional knowledge. Employees who have been with the company for years understand its processes, systems, and culture.
By promoting these individuals, companies can leverage valuable insights and maintain continuity in operations. Additionally, employees are more likely to stay with the company long-term when they see a clear path for career advancement.
However, not all employees want to be promoted to a managerial role. Some professionals prefer to develop as SMEs and focus their time on the hands-on execution of tasks and projects within their area of expertise.
Risks of Premature Promotion
While promoting from within offers valuable benefits, companies must consider timing, alignment with the employee’s motivations, and preparation as they are key to successful transitions. Premature promotions can result in higher turnover, decreased productivity, and increased stress for the promoted individual and their team.
According to the ADP Research Institute’s report, The Evolution of Work 3.0, 29% of people left their employer within a month of their first promotion at a company. The report suggests that “employees who are given more responsibility without adequate preparation, compensation, or resources could become more likely to quit.”
To avoid these pitfalls, companies should ensure that employees want a promotion and are adequately prepared to take on the new role.
Identifying Potential
A Harvard Business Review article by leadership advisors James Intagliata, Jennifer Sturman, and Stephen Kincaid describes traits and behaviors that signal high potential. These qualities include a strong drive to excel, a desire to learn and improve, and the ability to manage complexity and ambiguity. Individuals who exhibit these characteristics consistently are more likely to succeed in leadership roles and will be promising candidates for more advanced roles.
Companies can leverage robust performance management systems for recognizing high-potential individuals at all levels, such as the 9-box grid, as well as both formal and informal reviews to identify employees who consistently exceed expectations and exhibit the qualities that make an effective leader.
Regardless of how structured or informal – regular and consistent performance reviews are an important tool for assessing talent and potential. These reviews should go beyond evaluating current job performance to include discussions about career aspirations and readiness for advancement. Communication frameworks like Radical Candor are valuable tools to promote productive, ongoing dialogues that help pinpoint employees who are ready for more significant responsibilities.
Gauging Motivation
While promotion to a managerial position is often regarded as a reward for performance, not all employees want the traditional advancement pathway of rising through the ranks of their company. Randstad’s 2024 Workmonitor report found that 39% of employees are not interested in career progression because they enjoy their current job and 34% never want to become managers.
Personality assessments such as the Predictive Index and the Hogan suite of assessments can also provide insight into an individual’s personality traits, communication styles, and key drivers. The Hogan Motives, Values, Preferences Inventory (MVPI) is particularly helpful in identifying key motivating factors that influence an employee’s career objectives. These assessments can be used as the foundation for starting the conversation about employees’ motivations, such as whether they would like to lead a team or take on more responsibility as an individual contributor. Understanding these aspects can help tailor development plans and identify suitable roles that align with the employee’s natural strengths.
Understanding each employee’s unique motivations and career objectives will help employers ensure that promotion offers are well-aligned with the employee’s personal and professional goals, leading to higher job satisfaction and retention. Companies should also establish alternative development pathways for high-performing individual contributors who do not want to take on people management responsibilities.
Assessing Capabilities
Assessing an employee’s capabilities for a more senior role requires multiple data points. Stretch assignments are a valuable tool to gauge whether an employee is ready for advancement by challenging them with tasks that exceed the scope of their current role. These projects offer employees the opportunity to develop new skills while demonstrating their ability to handle increased responsibility.
For example, the following stretch assignments could be used to challenge a high-performing manager-level employee and assess their readiness to step into a director-level role in the near future:
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- FP&A – Market Expansion: Ask them to build a model to assess the viability of international market expansion, including local supply/demand, supply chain risks/constraints, currency fluctuations, local regulatory compliance, etc.
- Supply Chain/Logistics – Network Optimization: Conduct a comprehensive review of the company’s distribution network to identify cost-saving opportunities and enhance efficiency.
- Operations/Plant Management – Technology Upgrade: Assess the ROI for upgrading the plant’s technology infrastructure, such as automation, visual factory, or predictive or preventative maintenance tools, to enhance operational efficiency and reduce downtime.
- Human Resources – Safety Training: Design and implement a robust safety training program aimed at reducing workplace injuries and lowering the Experience Modification Rate (XMOD) to reduce workers’ compensation insurance premiums.