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US employers hiring managers from outside more often than promoting from within 

By Ken Tysiac 
July 27 2012

Management job seekers in the accounting and finance fields in the US may need to get away from their current employers to get ahead in their careers.

CFOs are filling management roles in their departments with candidates from outside the company far more often than they are promoting internal candidates, according to a new survey from executive staffing firm Robert Half.

The survey asked 1,400 CFOs at US companies to name the percentage of managerial positions within their accounting and finance departments that are filled by candidates promoted from within. The mean response was 38%.

That result can be construed to reveal shortcomings in companies’ training and staff development programmes, as well as lack of knowledge transfer among co-workers.

Development opportunities play a significant role in building a talented staff with internal and external hires. Ryan Sutton, a Robert Half senior vice president, said during a recent interview that job candidates rank the importance of a company’s training and development programme much higher than they did five years ago when they evaluate the attractiveness of a company.

“They understand that they need to be constantly developed and trained,” Sutton said. “And the organisation that helps them, whether it’s a tuition reimbursement programme or mentoring programme, it’s much more attractive.”

Paul McDonald, a senior executive director with Robert Half, said in a news release that consistently bypassing internal staff for management positions erodes morale and hurts retention efforts. And failure to retain employees can create a big problem because recruiting challenges have been rising.

Sixty-nine percent of CFOs reported difficulty finding skilled accounting and finance professionals in Robert Half’s Professional Employment Report forecast for the third quarter of 2012. That’s up from 37% in the second quarter of 2011, when the economy was beginning to emerge from the recession.

Robert Half gave four tips for company executives who want to groom leaders on their staffs:

  • Begin with the interview. Evaluate all candidates for management qualities and potential, even when hiring for non-management positions. Keep the long term in mind when you hire.

  • Expand the review process. Solicit input from other departments during performance reviews in order to gain insight into employees’ performance outside your chain of command.

  • Manage expectations. Communicate to staff opportunities for advancement, and describe the skills and experience they need to get promoted. Be clear and honest.

  • Invest in training. Ongoing professional development is a necessity for companies that want to retain and promote employees.

Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine senior editor.

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5 Comments


Comments
Martin Petrov

I don''t believe that there is a one-size-fits-all right approach. It depends on individuals and circumstances.

Aug 9, 2012 7:07 AM
Comments
Toshanand Takoordyal

It is common practice here (in Mauritius) that job seekers need to move away from their organisation to climb the ladder. It''s a challenge which helps one to look outside the box & develop further his leadership capabilities

Aug 6, 2012 6:46 AM
Comments
James Morrison

The challenge is to train and develop internally with education, job rotations and promotional opportunities.  In addition, a healthy environment that encourages new ideas is extremely important.  Hiring from the outside is costly and risky business.  I use that as a last resort.  Sending internal employees to outside conferences and constantly challenging the department to implement best practices will go a long way towards bringing new ideas to light.

Aug 3, 2012 9:21 AM
Comments
Diane Fordham

I agree that bringing in an external candidate will bring fresh blood to the organisation and new brooms do tend to sweep cleaner.  Also candidates that are prepared to move from one organisation to anothe to achieve their goals are perhaps displaying more determination and therefore greater Management potential than those candidates who prefer to stay internal and stick with the familiar.

Aug 3, 2012 8:33 AM
Comments
Irwan Lahuri

It depends on the recruitment strategy of the company. A CFO shared with me that one of the reasons he prefers to hire external candidates is for him to bring and implement new and fresh ideas to the org. It is a bumpy ride, but that is where the candidate leadership skills will be challenged. Often, internal candidates are complacent with the way things work in the org, and are not willing to challenge the status quo. The external candidate is often required or tasked to develop the org capability i.e. to share the knowledge , expertise with the pool of readily available talent to accelerate the succession plan.

Aug 3, 2012 3:05 AM
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