In today’s landscape of frequent CEO turnover, the journey from an entry-level position to the C-Suite within the same company stands out as a rarity with profound implications. While external recruitment remains common practice, stories like Satya Nadella’s 22-year climb to the CEO position at Microsoft underscore the vital importance of internal development. This approach prioritizes stability and showcases the value of professional growth and leadership training at every level.
According to Deloitte’s whitepaper on high-impact leadership, a strong leadership pipeline encompasses effective succession management practices at all organizational levels and a global perspective on talent sharing and mobility. This approach empowers employees to move both vertically and horizontally across various business functions and geographic locations. In my 35 years working across the development, IT and marketing teams to my current position as CEO at Laserfiche, I have seen the transformative potential of cultivating homegrown leadership firsthand.
How can companies systematically develop and nurture internal talent to ensure a steady supply of capable leaders at all levels?
Rethink recruitment strategies
Given that hiring a new employee costs between $4,000 to $20,000 for most companies, it makes sense to prioritize building a robust framework for identifying, nurturing and advancing internal talent as a cornerstone of a company’s leadership strategy. However, the benefits of developing and promoting talent go far beyond avoiding new hire costs. One study by a Wharton professor found that promotions yield better performance and retention rates in the first two years compared to external hires, despite the latter being paid higher initially and possessing greater experience and education.
Internalizing talent acquisition by developing an internal talent marketplace on a tech platform allows employees to showcase their range of skills and connect to new opportunities for advancement within the company. It empowers managers to advertise diverse roles and facilitates swift deployment, development and retention of employees within an organization. The internal talent marketplace provides various advantages, enhancing talent acquisition, mobility and management while bolstering organizational agility. Moreover, it empowers employees by offering personalized learning and development opportunities.
Establish a culture of continuous learning
A Pew Research Center survey found that 63 percent of respondents cited “no opportunities for advancement” as a top reason they left their jobs. Advancement goes hand in hand with learning new skills. One recent survey found that more than three-quarters of employees said they would stay with their current company long-term if it offered better training and development opportunities.
Gaining new skills, such as data analysis, project management or crucial soft skills, is a necessary step for ascending to more senior positions. At Laserfiche, we introduced a formal mentorship program that pairs employees across departments and different levels of the company, which has created new connections as well as scaled our efforts to train the leaders of tomorrow. Additionally, our online learning platform gives employees access to various learning modules so that staff can explore the topics they’re interested in at their own pace.
Providing continuous learning and skill enhancement opportunities through tailored training programs and mentorship initiatives empowers employees to grow and excel in their roles. Encouraging individuals to set and pursue professional development goals aligned with organizational objectives fosters a sense of ownership and commitment to personal growth. Moreover, recognizing and celebrating achievements in personal development reinforces the importance of ongoing learning and cultivates a culture where individual advancement is valued and rewarded.
Implement mentorship and coaching programs
Research has shown that mentorship can significantly impact employee retention and career advancement. Employees with mentors report higher levels of job satisfaction, organizational commitment, compensation and promotions. Leveraging mentorship programs to pair high-potential employees with seasoned executives can provide guidance, support and valuable insights based on their own experiences. These meaningful mentorship relationships accelerate the development of future leaders and create a culture of knowledge-sharing and collaboration that drives organizational success.
In a time of global business uncertainty, future success hinges on the development of capable leaders to meet current and future business needs. By identifying and nurturing talent early in their careers, organizations can establish a reliable pipeline of capable leaders. This commitment to internal development prepares successors and fosters a culture of continuity, loyalty and enduring legacy within the organization. A steadfast dedication to cultivating leadership within the organization ensures a sustainable and robust leadership pipeline for the company’s long-term success.
