A company is like an organism: If it stops moving, it will atrophy. When it’s time to hire a new executive, it’s important to pick someone who can keep things moving forward.
Internal candidates could get the job done, but the best options may lie outside the business itself. Here’s why hiring external executives can take your company to the next level:
Keeping Labor Costs Low
New executives can be costly. Whether you’re replacing an existing position or adding a new role, some positions may not need a specific person to fill them at all.
A marketing agency, for example, could perform many CMO functions from afar. Outsourced CMO Hawke Media reports that an in-house marketing team could cost anywhere between $84,167 and $131,250 per month. In contrast, a marketing agency costs between $2,500 and $25,000. That could greatly cut down on your company’s marketing spend. Outsourcing executives makes sense for small- to mid-size companies in particular.
Growing Your Candidate Pool
Even if you don’t outsource an executive position, looking beyond your current staff dramatically increases the size of your talent pool. In turn, more candidates will allow you to be more selective.
With a larger pool, you have more room to compare and contrast. You can siphon experiences, skills, and insights that may have been previously unavailable. Those skills then move right into the upper echelons of your organization. You can find more mature and experienced candidates around the globe compared to the limited choices among internal staff.
Bringing a Fresh Perspective
Another benefit of an outside hire is that she brings a fresh perspective to your organization. A fresh set of eyes and ears can infuse any company with a new sense of purpose and interest — not to mention a slew of ideas.
A new perspective can also energize a company’s sense of purpose. It’s easy to stagnate when everyone fixates on the day-to-day. But only looking at operational concerns doesn’t keep the company’s vision in mind. An outside executive gives your organization a chance to reaffirm its vision. She can also push you to reassess and revise it, based on where you’re headed.
Keeping Standards High
If you hire someone from within to fill a vacant job, especially one previously held by a competent individual, you risk lowering the benchmark for success in that position. This isn’t a knock on the succeeding candidate. It’s a genuine risk your company is taking by assuming an internal staffer will be the most capable option.
To this end, you’ll want to think about “The Peter Principle.” It’s the idea that if you keep promoting people when they’re competent, you’ll eventually promote them to a position in which they’re incompetent — at which point they’ll fail or stagnate. Avoid doing this at all costs.
If you choose to fill a leadership vacancy internally, you risk promoting a thriving individual into a position she’s unqualified for. At the same time, you risk filling the promoted person’s position with someone who may not reach the previous benchmark, continuing the cycle.
Honing Your Competitive Edge
Many startups depend on gut instinct and mass applications to fill positions. But if you invest in a savvy recruiter early on, you can pinpoint qualified candidates to recruit from competing organizations. This has the effect of bringing a seasoned veteran with a proven track record from within your industry into your company’s ranks.
In addition, it has the ripple effect of passing off the leadership staffing “hot potato” conundrum to your competitor. By headhunting their talent, you naturally leave a vacuum in their operations and, by extension, give yourself an edge over the competition.
With all these benefits, you should get more comfortable with the idea of looking outside your company to fill executive positions. Once a qualified new hire arrives on the scene and gets acclimated to your culture, operational standards, and day-to-day flow, she can be the spark that reinvigorates your startup.