Why Promoting from Within Pays Off

Whether your IT organization is five or 5,000 people, it’s tempting, in today’s market, to search outside talent for a superstar ready to contribute on day one. Yet the fear that such hires will flee when the economy turns around has companies hedging their bets by investing in their current employees.

“We view our business as a relationship business,” says Robert Juliano, vice president and CIO of Brandywine Realty Trust. They explore all internal resources before going outside, as “it gives us a better relationship and we retain the intellectual capital.”

The cost of retaining intellectual capital in Juliano’s world is time. He has regular one-on-one meetings with each direct report, weekly or twice-monthly coaching meetings, and additional walking-around, real-time daily coaching. “It’s about skating to where the puck is going to be. You need to have a two-year running head start to be prepared when key openings arise.”

But does promoting from within create a culture of entitlement? According to Juliano, “Communication regarding career path and development negates that entitlement culture. When we do bring someone in from the outside, it’s because we don’t have the skill set in-house.”

Some team members eschew career development and prefer to remain focused on the technical side of the business. Juliano contends that to push all employees toward a different skill set is misguided. “If people want to stay in detailed, hands-on roles, forcing them into a business relationship or bigger-picture role will cause turnover.”

Angelo Valletta, senior vice president and CIO of Sun National Bank, describes himself as a hybrid of both hiring philosophies. “You need to look at the landscape as a whole,” Valletta says. “I needed to remove two people and then bring in one person in order to get the right leadership inside my organization.”

When it comes to team development, Valletta feels human capital investments prevent turnover. In one success story, he paid for an employee’s MBA and Project Management Professional certification, allowing that person to step up seamlessly after a reorganization. “You’re either going to pay to recruit someone or you can pay for education and leadership development,” he says. “Pay me now or pay me later, but when you develop an internal employee, you have someone who understands your culture and your business.”

Helane Stein, head of IT for the Pennsylvania Real Estate Investment Trust (PREIT) leads a smaller team, prompting her to get creative.

“We invented positions that hadn’t existed here so there was opportunity for career growth or another area of exposure,” she says. Stein sent an ERP employee for business intelligence education and gave this person a dual role, avoiding having to make an additional hire. “It was an investment in this person’s career.”

When talent is brought in from the outside, these CIOs still look for help from their teams. Cost-saving employee referrals are an extension of promoting from within. “Two of my management hires were my current employees’ former managers,” says Juliano.

Similarly, at PREIT, Stein says of an employee referral, “I knew two minutes into the interview that this was going to be the right person.”

Community engagement bolsters employee morale and loyalty. “My organization is intact,” says Stein, “and hopefully, as the market improves, it will stay intact.”

CIOs cannot rely on the recession as a recruitment and retention strategy. Make an ongoing investment in employees today and create leadership options for tomorrow.

Kristen Lamoreaux is an executive technology recruiter with the Jarvis Walker Group and founder of SIM Women, a North American networking organization for female CIOs and their direct reports.