There are a number of paradoxes in the modern workplace but one that seems to plague a lot of organizations is leadership development and succession planning not leading to better internal talent or higher retention. And it befuddles HR professionals, senior executives, recruiters, and all employees.
A story (* = fictionalized…kinda)
Ryan* is a 28 yr old IT Jr. Project Specialist and has worked at Vector Resources* for 4 years. Starting as a departmental admin, Ryan proved her ability and moved into the coordinator role after 2 yrs. Since becoming a project coordinator, Ryan has received multiple recognitions from various stakeholders and completed a number of successful projects. She has also taken a few leadership courses and professional development courses as a part of her Individual Development Plan. Now Ryan is looking for her next career step which is to a Project Manager that would include up to two direct reports. The regional office in New Mexico has an opening for exactly that position. Ryan has long-standing good relationships with the people she would be supervising and they are supportive of her promotion. Ryan’s direct manager feels Ryan would be great in her new role and has acted as an advocate for her promotion as well.
Sounds good, right? She’s got a great track record, recommendations from her boss, colleagues, and recognition from other stakeholders proving her ability to successfully lead projects. Additionally, she knows the company, already has established relationships, understands the strategic vision of Vector Resources, she’s willing to relocate at her own expense, and love’s the company. Seems like a no brainer.
But here is what happens. The position posts internally and Ryan goes through the process and everyone seems to like her…but rather than offer her the job, they decide to post it externally to get some comparisons. EVEN THOUGH SHE IS THE PERFECT CANDIDATE! And here is the kicker, the salary range they are targeting for an external is MORE than they would offer Ryan.
So here is where Ryan sits – capable, recommended, ready, internally knowledgable, and accepting of a lower than external market salary because she loves the company. Yet, here is the message she is getting – external candidates are worth more AND might be more suitable for a role she is already doing. So regardless of the outcome, Ryan is starting to feel unappreciated leading to disengagement and cynicism towards a company she loved. Not to mention, the time to fill this valuable position is just getting longer and longer with two direct reports having no manager.
Despite all the things going for her, Ryan is subject to two contributing factors that are roadblocks to internal promotions – her longevity in her position and a concept of internal equity. Lets look at these individually because they are acting against internal promotions is different ways. One is leadership failure and the other is a cultural failure.
The Paradox of Longevity
Despite the high praise and desire for employee loyalty, it is harmful to your career progression. The culprit to this conundrum is a component of gestalt psychology known as “figure-ground.” It is a concept of how we perceive things.
Largely illustrated in visual form by optical illusions that show two or more objects depending on how you look at them, the concept of figure ground states that once something emerges from the background as a distinct image, it can no longer be unseen. So while you may see the vase first and then the profiles, you cannot “unsee” the vase.
How this works against an employee when it comes to longevity in a certain company, and more specifically in a certain position, is people sometimes have difficulty seeing someone as capable of doing something beyond their current position.
Take Ryan’s example, Ryan has been in a non-management role for an extended period of time and as such, the leaders around her (the hiring managers in particular), and unable to see her as a manager. In fact, she may even be told she is not qualified because she does not have management experience, which she will NEVER get in her current non-managerial role.
It is a Catch-22. You aren’t qualified to manage people until you manage people. And if she is not given the position for that reason, what leads her to believe she will ever attain her career goals at her current company. They are in fact sending a message that quitting is the only way for her to further her career.
Seemingly, some organizational leaders are more appreciative of the unknown potential with an external candidate, than with the known capabilities and internal knowledge of an internal candidate. That is the leadership failure, failure to see your own employees’ potential.
The Cultural Issue
This one is more a fault of systems being designed independent of one another but it becomes a blind spot for many organizations. They pay internal candidates less than external hires. And while the basis of this might be rooted in good financial theory, the human message it sends is, internal experience is worth less than external experience.
The underlying principles at work on this one is from a financial standpoint this practice makes good fiscal sense. An internal will generally accept less for a promotion than an external might demand. But beyond the messages it sends to an internal here is something to consider. The reason an internal would take less is because there is less stress of learning a new organization. It is easier to stay with a company I know for less money, than have to re-establish myself and learn a new role at the same time. The inverse of that is where irony sits. For the external hire, they fully anticipate the stress of learning a new organization and establishing themselves. So in essence, you are paying MORE for someone to learn your organization before they can even bring benefit. You are paying MORE for an external hire’s learning curve before productivity kicks in.
There is also the concept of internal equity that many HR professionals cite saying they do not want to create an expectation of a high raise percentage for internals as they move up. But this tends to be a fallacious argument. It may make sense when it comes to performance or cost of living raises, but it should not apply when the nature of someone’s job changes in accordance to a promotion. The role is worth a certain range and adjusting it simply because someone is an internal candidate is creating a negative culture for internal promotions.
Ultimately, here is the message and culture this practice of basing salary on the internal status and current salary creates: quit and work somewhere else, then come back and we will not only be more eager to hire you, we will pay you more than if you had just been promoted. It encourages the exact thing you are working to prevent. And what is more, you have now taken a sincerely engaged employee and turned them into a cynical job-hopper.
Straighten Things Out
Much of what I encounter in organizational roadblocks to performance are a result of misalignment. Everyone to detours around the roadblock to continue moving forward. In this case, the roadblock is a misaligned compensation philosophy and leadership perception. The detour is exiting people out of your organization only to pay them more to come back.
A major argument I hear from many senior executives is “if we develop people into leaders, they just take that experience to another company.” To which I respond, if that happens more than 50% of the time then you are either not looking at your people with fresh eyes when it comes to potential promotions or your compensation philosophy tells them they would be worth more if they quit.
When leaders start bemoaning the talent shortage and worrying about leadership gaps (such as in this article from Inc.com) it is usually a good idea to start looking at your efforts. If you are not developing your talent, start. But make sure you look the environment you plan to grow them in. You might create great seedling leaders but if you don’t replant them when they need more room or water them as much they deserve…you could find your leadership crop dying off.