Klarna
- Klarna CEO Sebastian Siemiatkowski broke down why it's important to promote internal talent.
- Siemiatkowski said raising younger employees to higher positions was the right choice.
- Companies have reduced promotions and high-salary hires, demoralizing younger workers.
While companies have been getting stingier with promotions in recent years, Klarna CEO Sebastian Siemiatkowski's philosophy has been quite the opposite.
Siemiatkowski said on a podcast episode of "The Logan Bartlett Show" on June 28 that after cofounder Niklas Adalberth left the company in 2015, he wanted to create a new management team through internal promotions.
The buy now, pay later fintech was a decade old at that point, which allowed him to raise people into upper management positions despite cautionary warnings.
"Everyone had advised me, oh, these people are too young for that," he said. "You know, kind of typical startup advice, and it was the opposite. It was the right thing — these were proven individuals."
And many of them are still with Klarna.
Current CTO Yaron Shaer was promoted from senior engineering manager to director of engineering despite only being with the company for just under two years at that point. David Fock, who joined in 2010, became chief product and design officer after five years.
"There's a reason why, if you go to very traditional industry companies, like industrial companies or these things, they almost never hire senior executives from outside," Siemiatkowski said.
The CEO pointed to Volvo Trucks as an example. Siemiatkowski said they don't hire "some senior guy off the street" who does not have the understanding and familiarity of their products as an experienced employee does.
"You have to work there for 20 years," he said. "There's a reason for that."
While employees may like this sentiment of nurturing internal talent, employers have veered in the opposite direction in recent years.
Business Insider previously reported that, based on data compiled by Workday, businesses spanning all industries promoted fewer employees in 2023 compared to the previous year.
With high-salaried hiring in one of the biggest slumps of the past decade, companies have been able to be more frugal with fancy promotions, which can be especially demoralizing for the younger generation.
However, Siemiatkowski, who became a CEO at just 23, said that he thinks it's "critical" to allow younger employees to progress with the company.
Siemiatkowski said he's "willing to bet more even if they're junior and even if they're learning, but allow these people the same development and learning that I myself had."