The Case for Internal Hiring

The ideal job candidate is probably already working for you, so it pays for companies big and small to develop talent within. A full-colour projected image of Mickey Mouse is the first thing a visitor sees when stepping off the elevator at the offices of Disney Interactive Studios in Kelowna before being greeted by receptionist Shannon Sawatzky – whose official title is facilities services coordinator. She has held the job for a few months now but this wasn’t her first position at Disney Interactive.

Internal hiring | BCBusiness
Helping an internal hire climb the corporate ladder offers numerous benefits, including building brand loyalty and employee morale.

The ideal job candidate is probably already working for you, so it pays for companies big and small to develop talent within.

A full-colour projected image of Mickey Mouse is the first thing a visitor sees when stepping off the elevator at the offices of Disney Interactive Studios in Kelowna before being greeted by receptionist Shannon Sawatzky – whose official title is facilities services coordinator. She has held the job for a few months now but this wasn’t her first position at Disney Interactive.

Sawatzky has been with the studio, where the kids’ online social community, Club Penguin, is created, since 2009. She landed her new position thanks, in part, to the company’s efforts to train and promote internally whenever possible. Lynn D’Albertanson, who handles communications for Disney Online Studios, the division of Disney Interactive responsible for Club Penquin, says there are multiple benefits to hiring from within. “Product knowledge is probably the biggest. The Club Penguin brand is really unique,” she explains. Her passion for that brand percolates up as she describes it. “It’s very special. People who work here are extremely attached to the brand and that is something that takes time to build.”

Finding the Perfect Fit

A fit with company culture is the reason most often cited for hiring from within

Although the term is used almost universally in HR circles, “culture fit” is as unique as each business, whether it’s big or small. For CEI Architecture Planning Interiors, which has fewer than 100 employees in its three offices (Vancouver, Victoria and Kelowna), it’s defined by a positive outlook, a desire to work with others and to mentor or be mentored along the way. Telus describes its culture as teamwork, innovation and community mindedness. At Disney Interactive Studios it’s an honest love for all things Disney, and behaving in a way that is conducive to a kid-centric company. Simply put, “You wouldn’t walk into a room here and hear foul language,” explains facilities services co-ordinator Shannon Sawatzky. She’s seated at a table in the middle of a busy lunch room at the company’s Kelowna offices, and a closer ear to the buzz of the room backs that up; only chipper chatter, no cursing.

However, HR experts caution that just because a current employee fits the corporate culture, hiring from within does not necessarily guarantee the person will succeed in his or her new position. Cissy Pau of Clear HR Consulting notes, “The issues tend to be with their colleagues, where the people who report to them don’t see them in the role of manager or in this new role because they’ve always seen them a certain way. Or they end up butting heads with their managers, their owners and the executives because they are not able to adapt.” Both Pau and Henry Goldbeck, of Goldbeck Recruiting in Vancouver, agree that support in the new role, proper training and open communication lines are critical for the promoted employee to be successful.

Some companies look to an external hire specifically because they are looking for fresh ideas and innovation. It’s something that Telus HR vice-president Richard Beed believes is a risk for some businesses: “What happens is the culture auto-rejects that new person because they don’t like that innovation that’s coming in.

D’Albertanson is seated in a boardroom where numerous character sketches on a whiteboard vie with the hilly Okanagan view for attention. She believes loyalty and enthusiasm for the brand can also help the company innovate. She uses an internally hired project manager in the merchandising department as an example: “Can you imagine the benefit of having someone who works in the support department interacting with children all day, every day, now having a say into the merchandise that Club Penguin is creating?”

Henry Goldbeck of Goldbeck Recruiting in Vancouver believes that hiring from within is now a universal trend with both large and small companies. “Larger companies have very established processes where positions are posted internally, even when management knows or is pretty certain that there is no internal candidate. They still post it and allow people to apply,” he explains.

It’s more than just good optics or popular policy; hiring from within offers a long list of benefits to the employer. Goldbeck rhymes off a few: product and company familiarity, corporate loyalty and employee morale. Yet it’s the “known entity” part of the equation, often described as “culture fit,” that proves to be the most important with HR professionals. Culture fit is a big part of what the hiring committee attempts to assess: will this person’s values match the company’s, and will they conduct themselves in a way that meshes with the culture it has created? With an internal hire, the employer has seen these behaviours in action and can be more assured that the person is a fit.

At Telus Corp., the right fit is the first reason the company gives for hiring from within. Richard Beed, vice-president of talent solutions at Telus, believes finding that fit does more than create a good employee. “We absolutely find that when you are investing in somebody with that right culture fit, that when they operate in the right environment and with other individuals with the right culture fit, that’s what really helps us drive the innovation. That’s what really helps to support our customers.”

Despite her recent promotion, Sawatzky knows firsthand that hiring internally isn’t necessarily always the right decision. She was passed over the first time she applied for her current position in favour of an external hire. Despite Disney Interactive’s strong belief in hiring internally and despite there being several internal applicants, when the reception position needed to be filled in 2011, the company chose an outside candidate. The successful applicant had the right disposition, experience and fresh ideas about new systems to implement. Sawatzky reflects that when she got the news, she and a few other internal candidates were disappointed because they knew that the company wanted to hire internally. “But, I think after probably a week or two of getting over myself, I got to know the new receptionist,” she says, “and without a doubt, 100 per cent agreed that they should have hired her.”

Letting down internal candidates can be a tricky part of the process for the employer. “The biggest challenge we face when trying to hire internally is that everybody desperately wants it. And not everybody can have it,” says Disney Interactive’s D’Albertanson. She feels the key is communicating with staff: “We rely on our managers to help coach people toward what they want to do, as in, ‘Don’t just apply for every posting that comes out. You need to be thoughtful and you need to pay attention. You need to talk to different people in the studio and really see what you might be interested in so that you can have a career path goal and shoot for that, rather than just shoot for anything that is a salaried position.’”

Disney Interactive also invests in training its staff and giving them an opportunity to try out different positions with a backup program. Whether it’s someone with design as a hobby providing backup support for the engagement department when Club Penguin designers are too busy, or heading a meeting to practise leadership skills, staff are offered various opportunities. Not only does this benefit team members, but management also gets a chance to see them in different roles and perhaps in a different light. Disney Interactive has also recently started a mentorship program to give staff members access to the knowledge base of more senior staff. It’s all part of their effort to hang on to the employees the company has – and as a medium-sized business (with between 300 and 500 employees), a comprehensive system like this makes sense.


Image: Flickr
Disney Interactive makes it a policy to try to hire
internal candidates for openings in their Canadian

The challenge of upward mobility

For smaller firms, giving staff growth opportunities can be a bigger challenge. With little to no upward mobility, small businesses can get caught in a frustrating cycle of training junior people and then watching them leave once they have sufficient experience. “You’ve basically trained them up so they can join another company and be 100 per cent effective at another company,” Cissy Pau of Clear HR Consulting explains, adding, “If they’re now 100 per cent effective at your company, if there is some way that you can keep them for one, two or three years, or for many more years, that’s when they are going to be adding the most value to the organization. That’s the gravy.”

It’s a challenge CEI Architecture Planning Interiors was facing about eight years ago. The company would hire young architects and technicians fresh out of school, train them for a few years and then, because there were no opportunities within the company, they would leave. Bill Locking, one of the founding partners, was concerned not only about the immediate impact of departing staff, but about the future of the company. “I think seven or eight years ago we realized that at some point in time we wanted to turn the firm over to the people we were growing within the firm,” he says. “And at that particular time we realized that a couple of senior people had left because they just didn’t see the opportunities within the firm. So, we said, ‘We have to do something about this. We have to keep people that we trained and taught and mentored.’”

On the advice of a business coach and an HR expert, Locking and his partners decided to both grow the business and create a strategy for retaining talent by introducing a partnership-track program. Now each architect and technician that joins the firm has the opportunity to become first an associate partner and then a partner at CEI, if they meet about 30 points on a criteria list. Enumerating criteria such as managing projects, bringing in new work and fostering client relations, the checklist is a transparent way for even the most junior person to see the path to success at the firm. And, with these measured and attainable goals set out in front of them, it’s also the carrot that keeps talent moving the firm forward.

Pau believes these types of programs are critical for businesses of all sizes. The smaller ones, with limited resources, need to get creative in training and developing employees. For example, if attending a conference is not in the budget, she suggests having the employee submit a proposal to speak at the conference. “It’s killing two birds with one stone,” Pau says of the opportunity to attend the conference and create profile for the company while at the same time grooming the employee for a more senior position.

Pau believes that while it can be hard for small companies to develop employee-advancement programs, they can sometimes be the best place for employees to become well rounded because they get more hands-on exposure to a variety of skills and functions. To ensure that employees are given the opportunity to grow, she suggests talking with them to find out what drives them and then giving them on-the-job training that relates to their ambitions.

Recalling a survey she recently conducted with one client company, Pau notes that “one of the things that came back over and over is that it all starts with on-the-job training.” Such training can be as simple as job shadowing or assigning a new task with the guidance of a mentor. “Sometimes you get so many more opportunities,” Pau says of working at a smaller company, “because there aren’t layers and layers of people who can do the work. There’s just you and your team and you might not have had the experience of doing it before, but someone has to figure out how to do it.”

Goldbeck agrees that small businesses need to present unconventional training opportunities. As a small company of six to eight employees, his firm has no formal training policy, he says, but “we have a lot of informal training.” Goldbeck says a commitment to training and a policy of always trying to hire from within are huge selling features for a company during the recruiting process. He notes that if he can tell a candidate that the company has a history of promoting from within, that makes the job that much more attractive.

Telus has a variety of programs to attract top talent, including formal programs for management, along with less formal mentoring and coaching opportunities. It also has an online database of job descriptions, known as the Portal, where employees can see what any job in the company entails and what the path to that job might look like. “Say that you want to become a sales director,” Beed says. “This is what other people have done to get there and these are the differing experiences that you need to have to help make you that rounded person to fill that role.” It’s all a part of giving motivated employees the tools they need to grow with the company, Beed explains. “What we want to ensure is that it’s easier to find a job internally than it would be externally,” he adds. Telus backs this up with a company-wide target to fill 60 per cent of its positions internally.

Retention is the name of the game and it’s what HR professionals need to be focusing on for the future, according to Pau. “Demographically speaking, I think companies are going to have a harder and harder time finding talent because of retirement and fewer employees in the workplace,” she explains. It’s why she believes now is the time to create career-path programs like Telus and CEI have done, or to invest in mentoring and training programs like Disney Interactive and Goldbeck have done, which help attract and keep talent. “The concept of internal hiring and promotions from within, and mapping a career path internally – that’s certainly one of the really critical areas when we are talking about retention,” says Pau.

It was the training, coaching and the promise of opportunity that kept Sawatzky at Disney Interactive, even after she was turned down for the receptionist’s job the first time. She thinks back to that sad time with a surprising grin: “My manager came and talked to me and just kind of explained this is why we went the direction we went; this is why we weren’t able to hire you this time, but this is what you can work on in the future.” Sawatzky took that advice and took advantage of the programs in place. Not only was she learning on the job through the company’s formal backup program, where she filled in at the front desk, but she also took advantage of management’s offer to help her improve the assertiveness issues they’d noted as a shortcoming. “I started taking on different roles and different tasks, which essentially helped me build up my assertiveness,” she says without a hint of shyness. “So when this position opened up again, it was a little bit different. I applied for it and they were able to look at what I had done working towards a different position and say, ‘Yep, Shannon’s ready; let’s take her on.’”

What happened to the other receptionist to create this opening after just a year? She was promoted internally, of course, to a position with Disney in Toronto.