External hires are always good– or are they?

The debate about an external hire vs an internal promotion is a fascinating one.   For starters, the data  comparing the full financial cost of an external hire to an internal promotion is rarely favorable.  Salaries are often higher and search costs are daunting.  There is also the data of failure rates of external hires, especially when it comes to the most senior hires. And yet, I have never regretted a single external hire I have made – and there have been many.


The vast majority of external hires along my journey have been a runaway success.  The experience and energy that came with the fresh talent often allowed the incumbent team to jump-start their performance and watching a team embrace a new and fresh approach to an existing problem was often magical. Then there is the “network effect” of adding new people into the business; as they refer other great hires, customers and vendors..  My reasoning for why external hires are often good is based on my belief that if you are not moving forward you are moving backwards.  External hires help companies push boundaries that can be seemingly impenetrable to those around them


Misty-eyed reflection about the successful hires aside, I can also claim ownership to making some “flame-out” external hires over the last decade. Flame-outs for me were those where organ rejection was rapid, disruption ruled during their tenure and the new hire left within the year.  But I don’t regret any of these hires either!  The thing with “flameout “hires is that once the saga is over, the remaining team is usually stronger as a unit and crystal clear about what they do and don’t need within the team.  For someone to really flame out, they usually bring controversy and push debate which is good for companies that are growing or transforming.  The outcome can be a more experienced and higher performing team than first existed.  Given the complexities when an external hire doesn’t work out, the onboarding process and the need for extensive due diligence take on greater importance.  The ownership and accountability for success or failure of external hires cannot be taken lightly.  Flame-outs only occur when both sides are unwilling to execute against the well laid plan to succeed and to accept the fresh ideas from outside the existing vacuum at the company.


My own rule of thumb for hiring at relatively senior levels (managers and above) is 50/50 internal promotions and external hires. This keeps the balance of experience, culture carrying and fresh thinking at the right levels.  When it comes to external hires, I do think they are good for us but we need to remind ourselves every day that we can all learn from a new perspective and empower these resources to succeed.  Onward!


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