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My team lead is leaving the company, there are currently three people in the team including me. The other two team members are both more experienced and better qualified than I am, but they aren't interested in doing anything other than technical work. They enjoy being given technical tasks and problems to solve. That's also what I do, but I like being involved in project planning and setting the direction of our work (the team lead does this with some input from the team). I would like to progress and be able to lead the team and set direction on certain things - using direction from management and the technical opinion of the team in addition to my own technical skills.

The rest of management are either of the opinion that there is no need for a new team lead OR they are looking to recruit a new team lead externally (I don't know for sure yet).

Should I wait for the position to be advertised and then apply for it? Or should I tell the department management that I'd like to progress? What kind of wording should be used? Should I use the outgoing team lead? I have a good relationship with them.

I am nervous because the rest of the team have higher titles and more qualifications than mine, I don't think anyone expects that I could do this job or would want to because the rest of the team doesn't want it, but I do think that if I had the opportunity I could improve our work. Plus, I was due a much needed pay increase that got put on hold because of the pandemic and this could be a good way to increase my salary.

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    "I have a good relationship with them." Why haven't you already tested the waters by discussing it with them? That will tell you much more than what we can advise here. – Lilienthal Oct 15 '20 at 15:08
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    "this could be a good way to increase my salary." - there are companies that do not change salary because one becomes a lead. If that the significant driver of your decision you should find out how it work at your company before making the move. – Alexei Levenkov Oct 15 '20 at 20:40
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Barring some strange circumstances, your direct manager (and likely their manager as well, your second-level) should always know your career aspirations. It is part of their job to help you succeed. Organizations I've been a part of will set up a series of one-on-one discussions between managers and their direct reports to keep in touch with performance goals, coaching, and other needs. It doesn't have to be a formal meeting, if you're occasionally talking with your manager you can bring this up anytime.

If you've already shown interest in leadership your manager/second-level may already be aware. I was singled out because I demonstrated leadership skills so I was directly asked by several in my management chain if I wanted to develop those skills and become a manager eventually, but I am too interested in technical matters to switch paths now.

There may be some friction with your teammates, especially from those who are more senior to you (because of skills or tenure there) - but in my experience, they would also recognize that you have leadership skill and desire whereas they do not.

If you haven't already made your leadership desire known, start with your outgoing manager and you could open a conversation casually asking what the plan for replacing them is. I agree with your assumption that it will be replacement with an outside hire if nobody internal shows interest, but even if you weren't interested in becoming the manager it would be natural for you to be curious. During that discussion would be a good time to mention you're interested, and ask the manager their thoughts on whether you would be a good candidate. If they know you well they should have some relevant feedback on whether you need to develop skills or are already suitable for the position.

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Should I use the outgoing team lead? I have a good relationship with them.

This is the best place to start - have a private chat with them and say that you are thinking of applying for their soon-to-be-former role. Ask them what the job entails and whether they think you would be up to it. If they are leaving on amicable terms with the company and they think you would be suitable for the role then it is worth asking if they'd we willing to support you if you applied.

Or should I tell the department management that I'd like to progress?

Unless it's common practice in your company to advertise roles internally it makes more sense to approach them directly. Firstly because it's a little strange to go through the full applications process when you already work there and secondly because if they think you might be able to do the job you actually make yourself more attractive if they can skip the recruitment process entirely, advertising roles, potentially engaging with recruiters costs time and effort (even if not money directly) and saving that could make you an attractive option.

The rest of management are either of the opinion that there is no need for a new team lead

This could actually work in your favor - if the position isn't seen as hugely critical it makes promoting an unproven person less of a risk.

What kind of wording should be used?

Be confident - say that you think you're ready to step up and take on more responsibility and that you think you can bring value to the team and the business.

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Should I wait for the position to be advertised and then apply for it? Or should I tell the department management that I'd like to progress? What kind of wording should be used? Should I use the outgoing team lead? I have a good relationship with them.

Don't wait.

Talk to the hiring manager now. Explain why you are qualified, and why you would be the best person for the job. Hopefully you have enough insight into the requirements of the position so that you can talk about exactly why you are a great fit.

Use your relationship with the outgoing lead to your advantage, if and only if the outgoing lead is leaving on good terms. If that's the case and the outgoing lead would be willing to explain why you are the perfect fit for the role, that could be a compelling argument.

Don't emphasize "I'd like to progress" or "this could be a good way to increase my salary". Those are important to you but not at all important to the manager selecting a new lead.

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With any sort of negotiation with an employer, for better or worse the unchangeable bottom line is that the only leverage one has is that one will leave the company if one doesn't get whatever it is one is asking for.

Hence,

"Jack, I'd like to move ahead to Jane's position when she leaves Friday. What do you think?"

If they say no, politely say goodbye.

If you are not prepared to walk if you don't get what you want, unfortunately it makes no difference at all what is said or not said.

Companies exist to "make money", and that's it. (For example: if the company happens to go bankrupt, you'll get a form letter printed out by some bank computer sent to you stating that your job no longer exists.) You may be over-thinking the interaction involved between you and the company.

State what you want and leave if you don't get it (if you wish to do that).

If you are not prepared to walk if you don't get what you want, unfortunately it makes no difference at all what is said or not said.

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