Is Internal Mobility the Future of Talent Retention?

As executive search professionals, our job is to find and attract talent for organisations, bringing them qualified candidates with the skills, experience, and expertise that fill in critical skills gaps to help the business perform more effectively. Sometimes that talent is sitting inside the organisation, just in other areas. There is often an opportunity to tap into this talent, and benefits in doing so. A growing part of the HR role (and ours!) involves evaluating internal mobility options against others in the marketplace to help hiring managers find the right person for their team.

What is Internal Mobility and its Many Benefits

Internal mobility is the movement of employees (both vertically and laterally) across different roles, and even functions, within an organisation. It involves matching skills to fast-rising opportunities and is more than just an alternative sourcing channel. Robust internal mobility holds numerous benefits, not only to individuals, in terms of personal growth and career development, but to organisations too. It enhances collaboration, transferring valuable knowledge across internal boundaries and creating synergies. It promotes greater engagement, motivation, commitment, and productivity in the workplace. Conversely, it discourages talent from seeking employment elsewhere, aiding in retention.

Appointing internal talent eases disruption and onboarding time as these candidates already know the company and culture. It prevents the loss of valuable business intelligence, making organisations more resilient to economic downturns and “future-proofing” them. Internal mobility has massive cost benefits, with reduced hiring costs and high ROI as internal hires have been found to routinely outperform external hires. In a research article authored by Wharton management professor Matthew Bidwell, results showed that external hires performed significantly lower on performance evaluations during the first two years on the job than internal employees, who were promoted into similar roles.

Whilst in the past, internal mobility was often associated with moving geographically, the pandemic has changed that focus. Companies that have adapted to remote working and embraced ‘work from anywhere’ policies (such as Airbnb) are able to offer more flexibility and fluid access to roles, aiding internal mobility.

When speaking to a Top Talent UK CFO in the Financial Services Sector, who’s employer worked hard to make his internal mobility promotion work, he shared,

…this was probably the best decision I ever made in my career. It allowed me to see first-hand the benefits of internal mobility and sealed my commitment to the organisation. In addition, the company enjoyed a shorter onboarding process where I was contributing with minimal ramp time from week one. I worked a hybrid approach, with my time divided between the UK and Ireland. In turn, I became a huge champion of the benefits of internal mobility and have encouraged many of my team to consider their next career moves with and organisation to consider similar roles.  

Why it is More Important Now than Ever Before

The pandemic, followed by the “Great Reshuffle”, has created a host of obstacles for external recruiting, laying out the case for better internal mobility. When the pandemic hit, hiring freezes were put in place and Talent Acquisition functions were stymied. This was counterbalanced by increased skill development; with L&D teams stepping up to help upskill and reskill existing employees to maintain operational continuity, thus building, rather than buying, critically needed skills.

Contrast this with the situation we find ourselves in now with millions of employees resigning and companies needing to hire quickly but finding that competition is tight. Internal Mobility teams can be crucial in identifying and developing homegrown talent whilst saving organisations huge amounts in sign-on bonuses and other recruitment costs. While people may want to quit their jobs, many would happily stay at their organisation in a different position if processes, hiring managers, and HR made that easier. One in three candidates who sought out a new job in the past year searched internally within their organisation first, according to a new report from the consulting firm Gartner.

Another reason internal mobility is more important than ever before, is to engage the multigenerational workforce. Gen Z, as well as Baby Boomers, are entering semi-retirement, and both are looking for increased flexibility, variety in their assignments, and side hustles. They typically want to be working on shorter-term projects and are perfect for companies to be able to mobilise and dispatch on more creative problems.

Internal Mobility Barriers

So why haven’t companies jumped on internal mobility to a greater extent? A Deloitte survey found only 6% of companies believe they’re excelling at moving talent around internally. Why is this number so low? It can be as simple as a lack of strategic workforce planning and clear processes in place. Also, using an internal technology platform such as Gloat to manage the process is imperative, replacing the traditional manual and paper-based approaches. It also depends on collaboration between different departments and L&D and Talent Acquisition must be aligned and consider future potential, not just existing skillsets. A lack of transparency regarding internal roles is often the case and strong manager support is essential. Many managers are loath to lose a high performer in their team to another department and employees cite the fear of being seen as “disloyal” as a factor in not seeking out internal opportunities. There is a definite bias towards hiring a fresh face from another company rather than looking within and this, coupled with the above employee misgivings, has meant that internal mobility has had its challenges.

In discussing this with Cristina Istria, HRD Food, Beverage and Personal Care at Amcor, she said

I am a great believer in a full integration of Talent Acquisition in the Talent Processes. Talent Acquisition needs to work with the HR Generalists and Talent Specialists in two directions: on one side, help them understand market dynamics (availability of talent, changing horizon of talent wishes and desires, market dynamics that may influence how we approach talent etc). On the other side, they need to be deeply connected to business strategies and internal talent dynamics that may require talent acquisition to procure new talent. For example, wanting to grow sales in a specific market/segment, opening an R&D centre or an acquisition. Only by fully integrating TA in the Human Resources and Business cycle can we achieve a win on the market in today’s war for talent.

Internal Mobility of the Future

To make internal mobility the game changer it can be, several steps need to be taken. Companies need to embrace remote work as much as possible for their industry and structure if they want to truly leverage internal mobility beyond simply geographical relocations. This will have the added benefit of bringing Baby Boomers and Gen Z, as well as those with family or other responsibilities who are not globally mobile, into the discussion. With that, these opportunities will no longer be limited to the exec, but applicable to employees at every level and in all circumstances. Companies and Managers need to get better at identifying top talent, as well as potential and this is where various CoEs such as L&D, Talent Acquisition, and Talent Management, need to collaborate more closely. There needs to be a culture of trust and a positive mindset around internal moves, alongside mentoring team members career goals and personal growth. Having quantifiable goals for internal mobility and a highly functioning and streamlined Talent Marketplace, that harnesses the power of AI, and provides easy access to opportunities, alongside a discreet and straightforward application process, will allow internal mobility to be further leveraged.