Midsized companies spend a lot of effort on external recruiting but often fail to recognize raw talent already within their company. Oftentimes, they lack staff training departments and don’t devote the time and effort required to develop staff and plan challenging development programs to bring out their best.

When fresh needs do arise, it is too late to build up an existing member of the team, so they look outside, with all the costs and risks that entails. It is a continuing cycle: underdeveloped staff stagnating or departing for fresh opportunities, new personnel coming in, and the sad story repeats.

Some companies try internal promotions when staffing needs arise, but they are not planned out well. Even if your staff is dedicated, parachuting them into demanding positions they are not ready for only creates a new problem. The new role may overwhelm them or may not suit them. Either way, the move can reinforce self-doubts, undermine their confidence, and detract from company outcomes.

Companies must identify talent with management potential and plan a strategy to challenge them continually with new responsibilities, mentoring, and cross-training – all with an eye towards promotion over time. Commonly called career pathing, the approach focuses on “high-potential” employees and can bring out the best in personnel and performance, with minimal risk.

“We’ve developed a number of staff internally, and it has been effective and really rewarding,” says the CEO of a home-building firm in Canada. “When you are able as we have to see a receptionist grow, over the years, into an effective operations manager, you get a true commitment, a knowledge of the nuts and bolts of the company, and terrific results.”

Here’s how you can develop from within:

Watch a new or existing employee for at least six months and make a note if they are eager and fit into the company well. Hold a series of conversations with them about their work interests, ambitions, and professional plan. Validate that they are up for a challenge. Document your thoughts in their personnel file and share it with them.

In discussion with the employee, choose a direction for professional growth and development and outline a few projects or new responsibilities that will come their way when appropriate. Pace the plan based on their eagerness as well as their abilities. Some will want new opportunities quarterly; others will prefer a slower pace.

If the growth isn’t fast enough, make fresh opportunities by pushing leaders above them to delegate more (and focus on more strategic work), and if necessary, by dismissing sub-optimal employees and reassigning their work to ones that are thriving.

Not every spotlighted candidate will reach their potential or last the course. But keep the numbers manageable, and emphasize quality mentoring, planning and projects, so that the effort is worthwhile for both sides and progress can be tracked and noted. Working with only a handful of employees at one time is best if that is what you can manage well.

High-potential employees should have a mentor in the company, often their boss. Growing inside a company can be an emotional journey, at times frustrating, scary, and rewarding. Having someone who the employee feels cares about them is crucial. Always make sure to give constructive feedback on performance, positive or negative, to help the employee learn.

One way to best mentor employees is to use regular one-on-one check-ins using a consistent online format for those meetings. This allows the sessions to be more focused on the work to be done than  random conversation. The One Page Planning and Performance System has a built-in weekly or monthly check-in module that asks the employee to rate their performance for the prior period and set goals for the following period. This gives you a chance to evaluate how the employee thinks and how they’re coming along and a place to add your own feedback in writing. The system then saves each check-in to record their progress over time

Building the Backbone

Aside from high-growth companies, it’s nearly impossible to tell when a company will need to harness more talent. Growing talent can be cost-free. The excitement generated by employees getting new opportunities usually more than pays for the cost of supporting them and helps ensure that qualified personnel is on hand for when openings do arise. It is a slow process requiring regular attention. Yet over 10-30 years, such mentored talent can form the backbone of many operations. Each new position filled from within confirms a successful journey for both employees and the company and is a moment for real celebration.

“The process can stretch over decades, so it requires time and real commitment,” says the home-building firm’s CEO. “We have a vice-president of operations who started with us as a framer on building sites. There were some areas where he needed backstopping, and we’ve been able to help him focus on his strengths. Now he’s a great leader for us. It shows how effective and gratifying the process can be.”