Why promoting employees from within is good for your business

November 13, 2018|By Instant Team

When it comes to filling those higher-level management roles, does it make more sense promoting employees from within or bringing in outside talent?

While sometimes a new employee can bring in a fresh perspective to a department, it can also be a risky and expensive undertaking.

Ask a company like Chipotle, where 96% of managers are promoted from within, and you’ll likely find there is a slew of benefits to promoting your best employees. Here are just a few.

Shorter Learning Curve

Think of your company as a community with its own unique strengths, challenges and quirks. As with any community, it takes some time to learn your way around, let alone play tour guide for out-of-town guests.

The same goes for your employees. With more background knowledge of the inner workings of your company, a manager promoted from within will often have a much easier time navigating their new role than someone hired from the outside.

Left Quote Mark

external hires were 61% more likely to be fired from their new jobs.

The numbers speak for themselves. According to research published in Forbes, external hires were 61% more likely to be fired from their new jobs than those who had been promoted from within.

Higher Employee Retention

For the restaurant industry, where employee turnover reached a staggering 73% in 2017, hiring the right employees is critical.

Regularly promoting employees from within signals that your company offers opportunities for growth. In fact, lack of career growth is among the most common reasons hospitality employees quit their jobs in the first place—contributing to the high industry turnover. According to HR Careers, professional development options increase the likelihood an employee will remain at their current company by 10 percent. Knowing that there are opportunities for them to grow also motivates employees to work harder toward achieving those goals.

Stronger Company Culture

When promoting employees from within, you bring up a team member who embodies the personality and core values of your company. This breeds strong company culture, which is not only good in boosting employee morale, but also for delivering a better customer experience.

That’s one reason why In-N-Out Burger, ranked among Job.net’s Top 6 Restaurant Chains to Work For, promotes heavily from within and retains much of the family culture of the original owners, Harry and Esther Snyder, who opened the first restaurant in 1948.

Strong company knowledge is so important at In-N-Out Burger, many of its restaurants require new managers to get a referral from a current employee before they’ll even be granted an interview.

How to Keep Your Employees Long Enough to Get Promoted

While promoting employees from within can have high returns on your company’s bottom line, you also have to be strategic in making sure you have employees who want to stick around.

For Texas Roadhouse, ranked as the no. 1 restaurant chain to work for, according to Job.net, it starts with a strong training program, “We train both employees and management across the board, not just about the specs and the procedures … but also about the culture of what this company is all about inside these four walls, said Lisa Dwelly, director of employee development for Texas Roadhouse. “We train our staff to really show that on a daily basis.”

In the end, cultivating and maintaining talent within your company is just another strategic way to invest in the future success of your business.

Engaging Employees: Lessons from America's Top Restaurants

For more strategies, read our latest whitepaper that digs into the leading strategies top employers use for employee engagement (promoting from within is one of them)