Why Half Your Leadership Roles Can’t Be Filled Internally (And What to Do About It)

Internal promotion is a top priority for most companies—but too often, it doesn’t deliver the results they need. According to DDI’s HR Insights Report 2025, despite 75 percent of organizations focusing on growing leaders from within, only 20 percent have leaders ready to fill critical roles. As a result, the average company can only fill 49 percent of leadership positions internally.

This paradox leaves companies vulnerable if they don’t address long-term pipeline issues now. So how can you close this readiness gap and make internal promotion a reliable talent strategy?

Organizations must move beyond simply identifying potential and adopt a more holistic approach—one that develops it, tracks growth, and accelerates readiness.

The Internal Promotion Challenge

With 58 percent of leaders saying hiring is their toughest challenge, many are turning inward to fill leadership roles. It’s a smart move. Internal promotion offers clear benefits: cultural continuity, faster onboarding, better performance, and retention of high-potential talent.

However, internal promotion can fall short due to hidden obstacles:

• Mistaking tenure for readiness

• Evaluating potential without objective data

• Prioritizing who gets promoted over how leaders grow and develop between roles

• Lacking visibility into your bench strength

At the core of these issues is a misconception of potential itself. Many times, potential is treated as a static trait, measured by what someone has already done, not what they’re capable of becoming. But leadership capability reveals itself through action and growth—and it can be developed with the right support.

How Continuous Evaluation and Growth Drive Promotion Success

Many promotion failures occur when leaders are chosen based on past performance or tenure, not readiness for the next step. The solution? Start with objective assessment data.

Assessment as the Springboard

The best assessments go beyond measuring the current state. They reveal how leaders think, adapt, and respond to new situations. Simulations that mirror next-level challenges are especially powerful to understand potential in context. This understanding leads to better decisions. In fact, internal promotions are 1.6X more likely when leadership decisions are grounded in assessment.

Development as the Accelerator

Assessment data isn’t just for selection—it’s the foundation for targeted development. It uncovers a leader’s gaps and helps talent management teams build clear, personalized plans.

Just as importantly, development experiences reveal who can stretch with the right support. That’s what signals readiness for the next level.

The bottom line? It’s not just about identifying potential and moving on. It's about targeting the right skills—and seeing who grows with focused development. That’s how you begin to close the readiness gap.

The data tells the same story. Internal promotions are far more successful when development is intentional:

• 3.7X higher success when combined with cohort-based leadership development

• 3.2X higher success with sequentially planned development courses

• 2.6X higher success with frequent manager coaching

When done right, assessment and development ignites a continuous loop: Initial assessment guides targeted development. Development sparks growth. Assessment reveals progress and how to adjust development. Over time, leaders are ready for promotion.

Implementing the Cycle

Start by defining what matters: What specific capabilities do leaders need to succeed in their next role? Then, use multi-method assessments to measure those critical capabilities, not everything. Don’t just evaluate knowledge or personality; observe behavior in specific situations relevant to that role.

Let high-potential leaders know where they stand and what skills they need to grow. Develop those areas, using practice simulations and stretch assignments to reveal improved performance and increasing potential.

The key to success is treating every assessment and development experience as a window into growth velocity, not just an HR process to spot talent or build skills.

Building a Sustainable Internal Pipeline

To build an internal pipeline that stays dynamic over time, shift from replacement planning to capability building. That means you should:

• Focus investment where it matters most: your critical roles with the greatest business impact.

• Use assessment insights to design targeted development and stretch experiences.

• Track who flourishes with development support and who plateaus.

• Measure both behavior and business outcomes to see real potential in action.

Conclusion

The most successful organizations don’t just assess potential. They develop it and continue assessing it as they go.

The future belongs to organizations that build dynamic, ongoing assessment-development cycles, not static annual reviews.

Learn more about building a robust internal leadership pipeline in our complete HR Insights Report 2025. Read the full report.