Having good internal mobility in a company may sound simple to do. Yet its benefits can be stifled by challenges. Here’s what you should know about filling critical roles from within, including its benefits, challenges, and how to make it work at your company.
What Does Internal Mobility Actually Look Like?
Not so long ago, the hiring landscape was very different. People would stay with one company for decades, if not for the entirety of their careers: In fact, from the end of World War II through the 1970s, companies would fill 90% of their open roles through promotions or transfers. Now, of course, things are different—33% or less of vacant roles are filled internally.
Understanding internal mobility
Broadly speaking, internal mobility occurs when current employees are promoted or transferred to new roles within the company, as opposed to hiring outside candidates. This can happen vertically, via a promotion that takes an employee up to the next level, or laterally, when an employee moves across to a new role in another business area (though not necessarily involving a promotion).
Internal recruiting usually happens through internal job postings, manager nominations, skills & knowledge databases, or succession planning, according to the Society for Human Resource Management (SHRM). SHRM says that regardless of approach, the program should be fair to all employees, set the right expectations, be implemented consistently, and be openly talked about and promoted.
Modern approaches to internal hiring
Many organizations consider internal hiring to be important, but may not have existing HR processes or the right company culture to see it through.
Even a large, highly innovative technology company like Google didn’t do enough internal hiring, and teams became frustrated as people wanted greater mobility in their careers. After testing various approaches, the company settled on a marketplace-based approach where employees would bid on open roles. The initiative, called “Project Chameleon,” seems to have worked, as evident from employee interviews about switching roles at Google and even a Harvard Business School case study.
The Benefits and Challenges of Internal Mobility
Employers who tout internal mobility, which is generally considered a “best practice” and a hallmark of a good workplace, should not simply pay lip service to current employees. When taken beyond just words, a sincere effort and implementation of a career mobility program can reap benefits for employers and employees alike if carried out effectively.
One of the largest benefits of promoting internal mobility in the workplace is greater retention: LinkedIn reports that employees stay 41% longer at companies with strong internal mobility when compared to companies with low levels of internal mobility. When employees stay on longer, this reduces overall turnover in the company.
Reducing employee turnover can have real financial implications. According to Gartner’s research, employees who leave a company because of a lack of future career opportunities can cost $49 million per year for the average-sized organization. This calculation incorporates the cost of replacing an employee and the loss of productivity to the organization.
Company brand benefits
Another important benefit of internal recruitment is that it can strengthen the company brand. A big part of a company’s brand and culture comes from the relationship between employers and employees. When an employer values the career development of its employees, they are more engaged and loyal to the organization, thus increasing productivity and furthering the goals of the company.
Internal candidates are people who know the company’s culture and expectations, and the numbers show this: Organizations that promoted internally were 32% more likely to be satisfied with new hires, according to a Deloitte review.
Barriers to internal mobility
The path to making internal mobility successful at your company is not always clear in the beginning. Some companies lack an encouraging culture around internal hiring, and recruiters are discouraged from doing so. Naturally, managers may be reluctant to lose high performers to another team. However, if employees don’t see a way up in the organization, then they are more likely to leave for a company that will indeed offer them this chance. This is especially true for the millennial generation: In a 2016 Deloitte survey, 70% of millennial respondents who were likely to leave in the next two years were unhappy with how their leadership skills were being developed.
Outside of altering company culture, here’s another barrier that may be simpler to fix: The lack of visibility around available jobs within the company. An organization may need to develop a database of existing employees and their skill sets, or even an internal job board.
Yet even an internal job database may not be successful if key departments are not collaborating with each other, or teams are not preparing people for promotions. Leadership should encourage employees to work on their skills and help create a career plan so they’re ready for their next role.
Improving Internal Mobility: Where To Start
The practice of hiring internally at your company may take time to get right, but it’s something that should be made a strategic priority to be successful.
Making internal mobility a strategic priority starts with awareness, and ultimately, a shift in the culture. For example, the Zurich-based banking company UBS realized they could only outperform competitors if employees worked in different areas of the organization in order to bring the “whole bank” to their clients. The realization made UBS prioritize internal mobility across the company, change the culture to one of ongoing feedback, and establish a learning platform for employees.
An important way to source internal talent is to keep developing the internal talent pool by fostering relationships with the talent acquisition team, current employees, and hiring managers. Applying the insights from these relationships will help to reinforce this as part of the culture. What will be important is that recruiters have access to profiles and applications of internal talent.
Censia, our AI-powered talent intelligence platform, can help you track which employees are ready for upskilling or promotion, all inside your existing applicant tracking system. This can help management understand how internal talent is evolving as the company grows. Making sure to include internal talent in your recruitment will help to create a culture that values its employees and their development, all while positioning the company to achieve its goals in a more effective, productive way.