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Hiring a new Sales Manager is an important decision for any organization and a major question is always whether it should be an internal promotion or external hire. There are merits and drawbacks to both approaches and it’s important to weigh them up before making a decision. 

Let's break it down. 

Internal Hires - The Benefits

Company Culture

One of the main benefits of promoting from within is the guaranteed continuation of existing company culture. By promoting a senior salesperson into a Manager role you can be confident they understand what’s expected of them and how to successfully encourage others to live and breathe your company values. Provided they’re nurtured and encouraged to develop their own management style that delivers results, it can be a great way to build a team.

Career Progression

Promoting from within provides junior members of the team with career progression by demonstrating a proven trajectory. This is especially important if you have talented individuals that you’d like to nurture and retain within the company for years to come. Proven career progression is not only great for existing team members, it can also be a fantastic way to attract ambitious new talent into junior positions. 

Existing Relationships

Probably the most important thing to consider when hiring a new Sales Manager is the effect on existing business relationships. Promoting from within ensures existing relationships are maintained, either by the newly promoted Sales Manager or their team overseen by them. Retaining existing clients is a skill that cannot be understated.

External Hires - The Benefits

Promotion Politics

An unfortunate reality of many companies is promotion politics so hiring externally can be an excellent way to avoid them. An external hire can bring new perspectives and, if the right personality is brought in, bring a positive new dynamic to current teams. Win-win.

Strategic Change

If your company is undergoing a period of strategic change bringing in new blood is a brilliant way to level up. Finding someone who has prior experience in a market you’re trying to break into or understands how to implement a new sales strategy can be vital and make the transition more manageable for the Sales team.

Limited Talent

You may have a stellar sales team but it could be that they’re not quite ready to step into the shoes of a manager. Hiring an external manager means you know you’re getting the skills and experience you need to lead a successful team. It may also be that the team could do with a little refresh and a new perspective, another reason hiring externally can be a good move.

Internal Promotion - The Drawbacks

Loss of Sales

When promoting from within it’s important to consider the impact it could have on overall sales. It can be tempting to promote your top salesperson and they may well seem as though they have the correct skills for the job as, after all, they know how to sell and know how to do it well. The reality is that companies who promote their top salespeople into management positions find overall sales drop by around 7.5%. Not only this, but the qualities that make someone an excellent salesperson are typically very different from those that make an excellent Sales Manager. Top salespeople tend to be competitive, driven, and not afraid to be cut-throat when it comes down to it. Effective managers are able to support and uplift others while always considering the long-term impact of their decisions and the team’s overall performance. 

Promotion Politics

As we touched on a little above, office politics are an unfortunate element of many workplaces so it’s important to consider the wider impact of your promotion choice. Promoting from within runs the risk of causing underlying tensions to rise to the surface, so it’s important to be mindful of this unintended consequence. This can be somewhat avoided by implementing a transparent interview process to demonstrate no favoritism is at work.

External Hires - The Drawbacks

Unknown Qualities

A candidate that gives an amazing interview may not always be the one that is going to be the right fit for the team. It’s important to understand their previous experience managing a team, in particular how they handle challenges and the techniques they favor to motivate others as these can have a major impact on team morale. Asking the right questions is a great starting point to help you figure out whether your external hire is the right fit but often you won’t know until they’re in position.

The Verdict

Whether you choose to promote internally or hire externally, the most important thing is making sure your Sales Manager is going to add value to the team and wider company.