One of the key considerations in making personnel decisions is whether to develop talent in-house or hire externally. A hallmark advantage of promoting from within is the employee's built-in organizational knowledge, encompassing culture, processes, relationships, and more. But these decisions should be based on merit, not convenience or onus, and are best made when a deliberate, long-term strategy is formed and then equitably applied.

That said, consider these best practices when creating paths for promotion and advancement within your organization.

Determine if and when this strategy is appropriate.

Establishing paths for advancement encourages dedication, increases retention, and improves morale, but this strategy doesn't necessarily work for every position--or every organization, for that matter. A company that is struggling or trying to break into a new market, for example, is likely to benefit from external hires.  

Some of the key indicators that an organization is suited to putting promotion paths in place include:

  • Business is thriving (build on existing strengths)
  • There is a need for, and variety of, skill-specific positions
  • Management is equipped to sustain a continuous cycle comprising planning efforts and performance reviews
  • The organization has a deep-seated history or culture that may be difficult to infiltrate

Gauging anticipated talent needs with your leadership team should be a routine part of business operations. For the sake of frequency, consider making this a staple during quarterly business reviews.

Define promotion paths early.

Make it known that your company prioritizes, values, and actively promotes career development by carving out promotion paths with employees early on in their tenures.

One of the most important factors in fair and successful internal advancement is transparency. Each step should outline specific, actionable criteria that establishes and warrants progression to the next level.

Track employee progress within the defined promotion path.

Creating career paths not only helps employees visualize their progression--having constant challenges and goals to work toward keeps them motivated and engaged with their work. This path is not one they should travel alone, though. Carving out a career plan is something employees should be heavily involved in, and even spearhead, but managers have a shared responsibility to continuously support their employees in scaling that path, to the benefit of both the employee and the company.

Certain skills can be developed independently--for example, by taking courses and acquiring certifications--but others must be taught by someone from within the organization.

One of the trademark qualities of this management style is team skill-sharing, whereby employees are encouraged to rely on and learn from each other, rather than just their manager. That said, managers can also proactively support direct reports by giving them strategic projects and platforms to showcase their skills and ideas.

Complement promotions with a virtuous cycle of encouragement

Typically, employees are more likely to give extra effort and to plan a long-term future with their company when they believe promotions are available to them. Creating such circumstances requires acknowledgement of team members at various levels.

Lack of recognition is an often-cited reason for people leaving their jobs, so it is important to commend employees for hard work in between promotions. When promotion announcements do occur, make it an inclusive celebration by offering praise to team members whose efforts helped position the business and candidate to advance. Everyone like to be on a winning team, even if they're not the MVP.

It is in the best interest of all parties for employers to be aware of what brought their employees to their company and what is keeping them there. Creating paths for advancement keeps everyone on the same page and accountable for working toward independent and group success.