When Textron officials began assembling the management team for the company’s new merged technology division earlier this year they didn’t have to look far.
In fact, 22 of the 24 new management positions were filled with employees already working for one of the company’s other business units.
The decision to move them, which in many cases equaled a promotion, was based on the needs of the company said Chuck Schwab, vice president of human resources at Textron Information Services
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"We wanted a core competency," Schwab said. "What they know and what they do is the same now, it’s just a question of scale. They are here because we know they can do it. Now we just want them to do it at the management and executive level."
For many in the information technology field, the path to advancement begins close to home. According to a recent survey conducted by an independent research firm and developed by RHI Consulting, more than half of the 1,400 Chief Financial Officers polled said current leadership people were already working for the company. In addition, close to one-third of respondents said nearly all of IT managers at their company were promoted from within.
"Businesses that promote from within demonstrate to employees that their contributions are rewarded, which can be a tremendous tool for motivating and retaining top talent," said Katherine Spencer Lee, executive director of RHI consulting, which is based in California.
Jack Sommer, executive director of the Rhode Island Technology Council, a local high technology trade organization, agreed.
"As a general rule it does benefit the employer and the employee," he said. "We always encourage local businesses to hire from within, as opposed to going outside."
Unfortunately it doesn’t always happen, especially in the technology industry. Christopher "Kip" Bergstrom, executive director of the Rhode Island Economic Policy Council, said that right now the industry isn’t doing as much internal promoting as it should or could be doing.
"Certainly there is some (internal promotion) going on," he said. "But a lot of companies are bringing foreign workers in, using visa programs to fill these higher level positions for which they could have trained a current employee."
Sommer agreed.
"Generally the transition from the middle to the top is the most difficult," he said. "I don’t think that businesses in general are training the way they need to."
In some cases, Bergstrom said, companies have begun to fear investing in their own employees.
"Companies fear this, to some degree, because when they train employees to develop skills, it not only makes them eligible for advancement within their own company, but at other companies as well," he said. "There is a lot of stealing of employees."
The result, he said, is an overabundance of workers all trained for the same job.
"There are still shortages at the top of the job ladder even after the dot-com bust dropped talent on the industry," he said. "By not training people, they aren’t eligible for advancement, there are a lot of folks at the lower level."
According to Schwab, the decision to train many of the newly placed workers is looked at by Textron officials as an investment, not a cost.
"We are trying to do what is most cost effective for the company," he said. "It’s not a cost savings now, it’s an investment. But there is no doubt that getting the leadership team in place up front will result in a cost savings down the line."
