24 Feb The risks of hiring externally for senior staff to manage existing teams

If you’re in expansion mode, starting new venues, increasing the capacity of, and/or altering an existing venue, you may need to bring in expertise that’s missing in your current leadership. Hiring senior leadership from outside your business to manage an existing team can also bring fresh perspectives and innovative ideas. However, it carries significant risks that can impact team dynamics, operational efficiency, and customer satisfaction.
Consider the following:

1. Cultural misalignment

Most Australian hospitality environments thrive when the workplace culture prioritises teamwork, strong customer engagement, and a laid-back yet professional atmosphere. The famous ‘casual fine dining’ market level. External leaders without previous Australian work experience may struggle to adapt to these nuances, leading to cultural clashes. If leaders impose their previous workplace norms, it can create confusion, lower morale, and increase staff turnover.

2. Disruption of established dynamics

Hospitality teams often form close-knit relationships, working together in high-pressure environments. Bringing in an outsider to lead can disrupt these bonds, potentially causing resistance, communication breakdowns, and decreased productivity. Existing team members may feel their loyalty and experience are undervalued, impacting their motivation and performance. It’s common for new leaders to want to establish themselves and ‘make their mark’. Even if the new leader is extremely disciplined and careful, team morale, productivity and profitability can be negatively impacted while they settle in.

3. Steep Learning Curve

The tight profit margins in Australian hospitality demand quick decision-making and deep operational knowledge. External leaders, unfamiliar with the specific processes, profit & loss risks, supplier relationships, or even local customer expectations, face a steep learning curve. This can lead to costly mistakes, inefficiencies, and a negative impact on service quality.

4. Risk to profitability

International leadership staff new to Australia are often oblivious of the risk to profitability that wage costs pose. Compared to many other economies, our base pay rates are substantially higher and require very careful management to keep them within budget. A new leader without this knowledge requires extensive training, coaching and monitoring. If their remuneration is at the upper end of the pay range, this becomes doubly expensive as another senior staff member will need to be seconded to fulfil this mentoring role, taking them away from their own responsibilities.

5. Loss of Internal Growth Opportunities

Promoting from within not only rewards loyalty but also preserves institutional knowledge. Hiring externally may demotivate ambitious internal candidates who see limited growth opportunities, leading to talent drain and affecting long-term business stability.

How can you minimise these risks?

Have a preferred policy of internal succession hiring. If there’s a lack of internal candidates, still advertise leadership roles internally, and consider giving every existing staff member who applies an interview. This helps identify existing staff who you may not be aware are interested in promotion and development. It also shows a genuine commitment to offering career growth opportunities.

If they’re not ready for a more senior role, you can negotiate development opportunities. You may discover existing staff with more capacity and skills than you were aware of.

When recruiting externally, ensure your salary negotiations take into consideration the financial and commercial responsibilities of the role. If the new hire doesn’t have Australian management experience, consider a stepped salary process, ensuring proven financial management acumen is linked to any salary increase.

In my opinion, the best long-term risk mitigation strategy is to develop your internal recruitment & selection, onboarding & training, leadership & team development systems to be able to provide future leadership staff from within.

Get in touch if you’d like to find out more about installing these systems in your hospitality business