Promoting an Employee on Your Finance Team

“Everything in its right place.” It’s the name and chorus from a Radiohead song, but it serves just as well as a slogan for business. Hiring, after all, is all about putting the right people in the right places, making sure their individual strengths and skills are being optimally deployed. If there’s a budding talent in your ranks, who has “manager” written all over their face, it may be time to kick them upstairs.

Putting the right person in charge of your finance team is a big decision that can dramatically impact the overall health and well-being of your organization. Promoting someone who’s well-suited for expanded authority and responsibilities can yield tremendous dividends for your company, and boost the ROI you’re getting from that employee. Promoting the wrong person, on the other hand — someone who is ill-equipped for a managerial role — can wreak havoc on a functional unit.

Here are some things, however, you should consider before you hand over the reins to one of the horses in your stable.

Looking for finance leaders in all the wrong places?

Employers and managers are often guilty of elevating employees to supervisory positions for the wrong reasons — usually with disastrous results. For example, you shouldn’t promote an employee solely because they’ve been with your organization a long time. A student who’s taken a course and failed it several times won’t pass simply on account of the time they’ve put in. Loyalty ought to be rewarded, and can be in other ways, e.g., paying them a bonus, giving them a newly minted title, awarding them through a recognition program. But longevity alone doesn’t make someone qualified for management.

Nor should you promote someone just because they happened to excel in their current role. After all, if you promote them, they won’t be in that role anymore — they’ll be in a different one, at which they may or may not be nearly as adept. One thing’s for sure: having promoted your best employee, you’ll be short one star accountant/analyst/etc. Consider whether you can afford to absorb that loss.

While past performance can be a useful predictor of future results, success in a junior role doesn’t guarantee success in a more senior one. Being a manager requires vision, drive, and planning, along with very specific leadership skills, an ability to think strategically, and an aptitude for communicating with others. Think carefully about whether an employee possesses these traits and is cut out for the tough job of managing other people.

If there’s a budding talent in your ranks, who has “finance manager” written all over their face, it may be time to kick them upstairs.

As in all matters, your decision to promote an employee to management should be based on merit, not sentimentality; whether they’re promotion-worthy is the only question that matters.

Don’t forget the training wheels

If you’re strongly considering one of your current employees for a promotion, you should first have a meeting with them, to discuss the possibility. Don’t assume that they’ll eagerly accept a new job description. Not everyone is wired for management; some employees may balk at the increased responsibilities and time commitments that come with a promotion.

For example, your superstar lower-level accountant might be perfectly happy crunching numbers all day long, but then, after begrudgingly accepting a promotion to finance manager at your urging, come to hate their job. In such a case, it won’t be long before they resign and return to their first calling — in all likelihood, for another company. Better to save yourself the time, expense, and potential talent drain, and determine beforehand whether your employee wants the pressures of being someone else’s supervisor.

In addition to failing to do their homework in advance, some employers will make the mistake of insufficiently supporting their promoted employees after the fact. They’ll bump up one of their top performers to a more senior position, and then skimp out on onboarding and training programs that could help their new managers ease into their job — with predictable results. You shouldn’t assume that, because a promoted employee already knows the company and its policies, culture, etc., they don’t need much ramp-up time. They might not be new to the organization, but they are new to being a manager! And many first-time finance managers struggle to adjust to their new roles and responsibilities. Make sure your rookie has the supplementary support and training they need,such as mentoring from their current supervisor, coaching from another professional, and so on.

Promoting within?

Be aware that there’s a significant tradeoff between promoting someone from within your ranks and recruiting someone outside of the organization. There are some obvious advantages to promoting in-house. For example, an insider will already have longstanding relationships with their former coworkers/current subordinates; there’s less of a danger here of messing up team chemistry.

Finance Manager Guide

But choosing to promote from within shrinks the pool of potential hires and limits the available talent you have access to (especially your access to other passive candidates who already have jobs). Just as a function of sheer numbers, your odds of finding a tried-and-true finance leader internally are probably a lot worse than if you were to recruit externally. And even if you do have a diamond in the rough in your midst, don’t think that an internal promotion can’t screw up your team’s dynamics. Office politics being what they are, many employees are bound to be somewhat envious one of their own receives a spanking new title, salary, and office, and gets to start bossing them around (of course, they could also be motivated by the hope of landing a promotion themselves, having just seen it happen for their colleague).

Think carefully about whether an employee possesses these traits and is cut out for the tough job of managing other people on a finance team.

On the other hand, recruiting externally doesn’t always deliver success either. And if you continually pass over your own people for promotion in order to bring in outsiders, you run the risk of alienating them and losing their loyalty. They’ll likely feel slighted; reasoning that they won’t ever be considered for the next vacancy, they may start thinking about leaving for a company where their progress up the organizational depth chart won’t be permanently blocked by an influx of “free agents.”

As a compromise, you may want to give your employees an opportunity to compete for a position you’re recruiting externally for. Announce any vacancies, along with their requirements, to your staff. And if it turns out no one is interested or qualified, you can recruit elsewhere with a clean conscience.

But the most important thing is to maintain a dialogue with your finance team about their opportunities for advancement. During annual reviews or performance evaluations, explain to your employees what more you’re looking from them before you’d consider expanding their roles or responsibilities. Follow up regularly, so that they have a sense of whether they’re making any progress, and what they need to improve on. That way, they won’t be caught off-guard or unawares by any decision you make in this connection.

Let us know what you think! At Clarity Recruitment, we’re always interested in hearing from accounting and finance professionals like yourselves, who are ready for new, exciting opportunities that can take their careers to the next level. And be sure to follow us on Twitter (@clarityrecruits) and connect with us on Facebook for more great tips and advice!