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Internal Mobility: Why It Fails and How to Fix It

Internal candidates are one of the biggest untapped resources in business. Not only do internal hires tend to be high performers, but, compared to external hires, they’re also more likely to stay with the organization.

Yet most businesses lack internal mobility programs. Let’s explore why, what they’re missing, and how to tap your internal potential.

Why isn’t there more interest in internal mobility programs?

Around three quarters of companies have only basic internal mobility programs. This is despite the fact that development opportunities are a key driver of retention among workers, especially those with more experience.

Research from McKinsey showed that 60% of those who have recently reentered the workforce would leave in the face of a lack of career opportunities within their employer.

This focus on recruitment, rather than retention and internal mobility, typically comes down to one or more of the following:

Recruiters look for skills rather than potential

Because the competition for new hires in the wake of the Great Resignation is so fierce, talent teams are rushing to fill talent gaps, and hiring for a set job descriptor is seen as faster than trying to source or develop it internally.

This is despite the fact that 58% of companies in our research described the ability to upskill and reskill their workforce as a key attribute of a ‘talent-first organization’.

This reactive approach misses the promise of internal talent. The same research above found that 80% of business leaders are focused on skills more than mindset when hiring. However, existing employees already know the company and have proven they’re a good cultural fit, indicating that companies are missing out on a key opportunity.

Companies have embraced the millennial job-hopping trend

We keep hearing that the millennial workforce doesn’t want to stick with the same job, so if an employee is not staying long, they need to be productive immediately. Little wonder that companies lose interest in training internal hires for a new role, and simply hire external candidates who already know how to do the job.

But part of the reason for this churn is that employees are not offered enough opportunities to upskill, be promoted or shift roles internally. If they can’t find the challenge they want in your company, they’ll start looking elsewhere.

Indeed, our Global Talent Index found that just under half (41%) of men and almost one-third (29%) of women have already taken on an internal project within the company they are employed by, and a total of 37% say they are considering doing so, with the top reasons being developing new skills and finding new challenges. Your employees might have itchy feet, but it doesn’t mean they’re looking for the door – maybe just for another desk.

Rigid approaches to talent

Many hiring managers hire and allocate talent to a specific function or track: marketing, software development, data science, human resources… They don’t consider the ability of a candidate to move around functions. They assume that the only way a candidate can move is up, doing more of the same.

But this linear approach to career progression prevents the effective allocation of internal skills outside of strict development pathways.

Meanwhile, companies who have a more agile approach to hiring see their internal talent like a marketplace. We’ve covered how you can restructure your career pathways for better returns; now let’s look at internal mobility programs specifically.

Where to start with a new internal mobility program

Internal mobility programs have two distinct audiences: the hiring managers, and the employees. So any successful internal mobility initiative needs to take both into consideration.

Internal talent acquisition setup

You should start by creating an employee directory and internal careers portal to ensure that hiring managers and promising internal candidates can find each other.

With a centralized talent platform, you can start cataloging the skills and experience – and not just those relevant to the employee’s current role – of promising employees, creating a single source of truth of the skill marketplace in your business.

Tools such as Talent Insights can then help you collate, organize and analyze the capabilities of your workforce, formalizing your internal talent data and taxonomizing the skills that matter.

You should also add employee data to both your candidate CRM, and to your talent pipeline, so you can start mapping skills – and potential skills that you can work to develop – to your talent strategy and goals

This also allows you to identify employees at risk of leaving, employees who haven’t been promoted in a while despite good reviews, and those who report being underutilized to put them on nurture tracks for new openings.

Creating a culture of growth

Facilities services company Sodexo, for example, realized that one of the challenges they faced in hiring internally was that hiring managers were sure that they knew what to look for in a candidate. For instance, they wouldn’t hire an employee from a different geographical market, because they believed that market knowledge was necessary for success.They also realized that candidates were worried about being seen as disloyal if they applied to a position outside of their department.

Talent teams need to spot these sorts of cultural barriers and break them down, both by encouraging hiring managers to widen their perspective and encouraging cross-department mobility.

Rotational programs are also a good way to introduce a more agile talent culture. It forces hiring managers to assess candidates based on their ability to learn quickly and hit the ground running. Organize them around candidates’ interests as well as your business’s skill demands’ needs, to make sure you’re fulfilling both sides.

Measuring for success

Data and analytics company Nielsen figured out that the main driver behind their high attrition rate was the lack of internal mobility. People who had had a promotion or a lateral move in the last two years were more likely to stick with the company.

When they decided to fix this situation by putting job opportunities in front of at-risk employees, they made sure to measure the impact of their initiative: 8x increase in internal mobility in the first year of the program, 5-10% increase in retention in most groups, and millions of dollars saved.

If you’re sinking resources and reputational capital in an internal mobility program, make sure its impact is both measurable and meaningful to the wider organization, with metrics like global cost savings or performance reviews in the first year.

Get more out of your internal talent pipeline

Your internal talent is a hugely valuable resource. Promoting and developing from within not only benefits your organization but also encourages and recognises your people for the value they’ve delivered and could do in future.

In an era where hiring new employees is more challenging than ever, your internal talent pipeline could be the secret to filling and securing the key hires you need.

Download our whitepaper, The Talent Trap, for the key trends in hiring and retention, and to find out how you can get more out of your existing resources and build long-term value with your people.