Shell PLC (LSE:SHEL, NYSE:SHEL) today confirmed the departure of Ben van Beurden, ending a 39-year association with the Anglo-Dutch oil major, nine of them as its chief executive.
His replacement will be Wael Sawan, who runs its gas, renewables and energy solutions business, with effect from the start of next year.
Sawan has worked for Shell for 25 years in a variety of senior positions, including being a member of the executive committee.
It is a continuation of the policies of Shell, and its UK rival BP PLC (LSE:BP.) of virtually always recruiting their executive staff internally.
Internal recruitment advantages for big companies
Recruiters say that one of the standout reasons blue-chip firms recruit from within is because the employee already have a thorough understanding of the company’s objectives, values and challenges to overcome.
Internal recruitment appeals to companies like Shell and BP as transitioning an in-house employee is far easier and quicker.
When you already know of the candidates’ skillsets and qualities, the only focus is ensuring the right person is appointed for the needs of the vacant job.
There is also direct access to all applicants’ previous jobs, personnel files and references.
Russ Mould, AJ Bell investment director, commented: “Firms with strong, distinct cultures may prefer to go for internal hires to maintain continuity of tone and strategy, even if they will have to interview a broad range of candidates to ensure the best person is chosen for the post.
“Continuity may reassure shareholders too, at least if they are happy with the company’s strategy, competitive position and financial and operational performance.”
Head Room
Internal recruitment, in theory, keeps company morale and productivity high, as a worker who feels appreciated knows they have something to strive towards with potential promotions.
Employee loyalty is encouraged while cashing in on past training investments, which should be beneficial to the company.
In-house recruitment secures mutual trust between the employer and the workers, allowing them to align their aspirations with those of the company, said Laura Spawn, chief executive of remote working recruiter Virtual Vocations.
Another reason, but more for smaller companies, is to save money by not having to pay for job adverts or fees to external recruiters, which can be up to 30% of a starting salary.
Has Shell ever appointed board members from outside the company?
It is an extremely rare occurrence but Proactive has managed to dig out one external appointment in recent years.
Andrew Mackenzie was given the role as a director of the company in 2020, after leaving the world’s largest mining company BHP following a nearly 12-year tenure, where he was chief executive for six of those. He was then promoted to Shell’s chairman in 2021.
Although this exception, one could argue, makes complete sense given his expertise and previous roles.