Should you promote your top producer?

One of the top reasons good employees resign from their positions is due to their immediate manager. In a talent-starved market, this can be costly.

A case study:

A client promoted an individual contributor to a management role. This person was an excellent employee and very knowledgeable about the department he was asked to lead; he was a strong individual contributor in that same department.

In the 8 months since he was promoted, the following has occurred:

1. Fifty percent turnover through employee resignations. 

2. Open positions remain unfilled, which has created a challenge for the company to the tune of $500,000+ in lost operational efficiency.

3. Our firm has been asked to help backfill all roles because it’s paramount that they are filled quickly, and the search fees associated with this project are nearly $50,000.

In addition to the above challenges, the company also has to determine how to move forward with the newly promoted manager. Should they train him? demote him? release him? The last two scenarios will likely cause him to resign, thus exaggerating the issue and creating, conservatively, an additional $200,000 in lost operational efficiency by losing someone who was previously an excellent employee.

The bottom-line costs associated with this poor promotion are between $550,000 and $800,000, or nearly 4% of total annual revenue.

Unfortunately, this scenario is played out in companies all the time. In theory, the idea to promote an exceptional individual contributor is great, and promoting from within is important to company culture, but leading a department is not the same as working as an individual contributor in that department.

Our suggestion is to find a natural leader within the company. This person will likely be the shadow of the current manager. Train and groom them for a management role for several months before promoting them to that position. Doing so will give the potential new manager time to apply what they have learned while getting the necessary job exposure to be effective. If they turn out to not be a fit after all, they can stay in their current role without a demotion and losing face, while being an even better asset to the future manager.