Why Internal Mobility Needs to Be a Key Part of Your Talent Strategy

December 2, 2020

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Over the last few years, as the talent market grew tighter and tighter, companies increasingly sought ways to embrace internal mobility. They wanted to find their next superstar hire — whether for a full-time role or a short-term rotation — in their existing workforce. Then the pandemic hit. COVID-19 sent countless businesses into a tailspin, triggered layoffs at many organizations, and ultimately brought legions of job seekers back to the labor market.

But COVID-19 didn’t suppress the appetite for internal mobility. In fact, it sparked an unprecedented interest. Companies that slowed hiring or stopped it altogether needed a way to redeploy their people to address their quickly changing business demands. For organizations with robust internal mobility processes and platforms already developed, there was a chance to move people with newly freed bandwidth to projects with newly found urgency.

“Suddenly, internal mobility has become much more important than it was when there was a tight labor market,” says Robin Erickson, PhD, principal researcher at The Conference Board and a longtime student of internal mobility. “Before, it was easier to find a candidate externally who had the required skills. But with hiring freezes during COVID-19, if you’re not allowed to hire from outside, you now have to find people inside for critical roles.”

The focus on internal mobility isn’t likely to evaporate, even when the economy picks up. For starters, businesses now have a clearer picture of the many potential benefits of internal hiring — increased retention, engagement, and agility; reduced cost and time of hiring; and development of high-potential employees with an eye toward leadership succession planning. For another, companies have now begun to consider more seriously and, in some cases, implement the processes and systems needed to make internal mobility work. They’re not likely to abandon it.

To give recruiters a better understanding of what’s at stake with internal recruiting, we’re going to provide an overview of the benefits and challenges of it and address the role recruiting should play in it. Then, in the weeks ahead, we’ll deep-dive on a few companies that have already created effective platforms and processes for delivering prized growth opportunities to their workforce.

An internal mobility program can improve your retention, leadership development, and cost and time to hire

Internal mobility has many potential upsides for employees and for their companies, but retention is the No. 1 benefit, according to most talent acquisition (TA) professionals. Some 81% of the TA pros we surveyed last year for our Global Talent Trends 2020 report agreed that internal recruiting improves retention, which put it ahead of accelerating new-hire productivity (69%) and reducing time to hire (63%). 

Schneider Electric, the France-based energy management giant, launched an internal mobility platform they call Open Talent Market as a retention play two years ago. Schneider did so after learning that 47% of the people who were leaving the company said they couldn’t find their next career opportunity there. LinkedIn data shows that employees stay 41% longer at companies that have a lot of internal hiring versus those that don’t.

An exodus sparked by a lack of internal opportunities will certainly include some of your best performers. “When they feel the timing is right, employees are going to go someplace else if they’re talented and there’s no place for them to move on at your company,” says Robin from The Conference Board.

A well-oiled internal mobility program can not only help you retain more of your top employees, it can also help you prepare them to be your future leaders. Research done by The Conference Board in 2019 found that the top strategic purpose for talent mobility was developing high-potential performers. And cross-functional rotations were one of the top development activities embraced by a cohort of 800 global CEOs in a different Conference Board survey.

“People who move around the company,” writes industry analyst Josh Bersin, “gain perspective, cultural insights, and can perform in unique and productive ways because of their relationships and knowledge of all parts of the company.”

Of course, one of the principal reasons to facilitate internal mobility is recruiting — it just makes sense to look at known and proven talent. “Companies can be shortsighted when they disregard their internal talent,” Robin says. She lists some of the principal reasons for searching your own workforce:

  • it takes less time and money to source (and saves on relocation costs);
  • it allows for faster onboarding and ramping up;
  • it means you know that the candidate is aligned with your mission and vision;
  • it also means you know exactly what a candidate’s recent performance has actually been.

But she also touches on two less-obvious reasons: “An internal candidate is probably OK with the commute,” she says. “A lot of surveys on job satisfaction have found that one of the most important things is the commute. And an internal candidate probably already has a friend at work.” Think about the Gallup engagement question: “Do you have a friend at work?” Gallup has noted a strong link between having a good friend at work and the amount of effort an employee expends at work.

To work, an internal mobility program must surmount significant cultural, process, and technological challenges

With all the potential upsides of a dynamic internal mobility program, shouldn’t every company have one? It isn’t easy and it can’t be quickly assembled. If your company doesn’t have one, be prepared for the long game.

A survey from The Conference Board last year found that only 28% of global companies believe their internal mobility programs are effective or very effective at achieving their strategic aims. This finding echoes an earlier SHRM survey that found only 33% of companies said they have a strong internal hiring setup.

And while there are challenges aplenty, our survey last year for Global Talent Trends found that managers who don’t want to let go of their top team members are the chief obstacle for internal mobility — 70% of talent acquisition professionals cited reluctant managers as a barrier.

At many companies, recruiters haven’t been asked to do internal hiring. Rather, they’ve been explicitly told to not contact current employees for open requisitions, which suggests that many managers see their star employees as belonging to their team first and the company second.

And even recruiters who have free rein to look within their own workforce may not have the tools or guidelines they need to get started. “[W]hen it comes to total talent mobility, the difficulty of designing and implementing integrated end-to-end talent mobility processes remains one of the largest barriers,” according to a Conference Board report on “Total Talent Mobility.”

In lieu of that, many companies have developed ad hoc processes that are driven by personal networks and connections. These, in turn, can lead to bad hires and reinforced homogeneity. A study published in the Harvard Business Review of 11,000 internal hires made over a five-year period at a Fortune 100 company found that internal candidates hired through informal processes consistently underperformed when measured against internalized candidates hired through formalized postings. Reliance on casual networks also reinforces existing groups and biases and is likely to impede efforts to diversify the workforce.

Without clear and well-deliberated guidelines, employees and managers are in perpetual limbo, particularly around rotations and stretch assignments: Am I eligible for this project? If I take this rotation, will my old job be waiting for me when I’m finished? Will I get paid for the work I’m going to be doing or for the work I usually do?

Amy Schultz, who leads talent acquisition at Canva and who until recently led recruiting for LinkedIn’s product team, sees a potential morass on compensation. “Maybe it was a short-term three-month assignment,” she says. “Then all of a sudden, it’s turned into six months or 12 and the employee comes back to you and says, ‘I’ve just found out that everybody else that’s doing this job is earning 20K more.’”

Finally, attrition can also be an issue with employees who decide to try to find their next play at their current company, only to find that they’re not treated nearly as well as the applicant who comes in unknown and untested.

“I’ve been an internal candidate before,” Amy says, “and had a really average experience. Often, we apply first and then the hiring manager says, ‘Oh, maybe I just want to see what else is out there.’ And so then the external candidates apply. Meanwhile, the internals are twiddling their thumbs. ‘Doo doo doo, doo doo doo, doo doo doo.’”

And when internal candidates are passed over, they are likely to feel slighted, particularly when they aren’t given a reason for the rejection. If they weren’t a flight risk before, they certainly are now.

Developing effective internal mobility starts with building a receptive culture and getting the right people to the table

Processes, guidelines, and technology are important for internal mobility but culture is paramount. “If your leaders don’t want to let people move,” Robin says, “then your program won’t be successful.” If talent is seen as something to be hoarded rather than developed, a company will have a hard time retaining its top employees over the long term.

The C-suite should model a culture in which people are encouraged to look internally for new opportunities and challenges. They should reward managers who help team members learn new skills, gain access to targeted training, and land new jobs elsewhere in the organization.

“One well-known financial services company has a culture where everyone is expected to move positions within 12 or 18 months,” Robin says. “And managers who don’t support their employees in moving on, people don’t want to go to work for them.” At Salesforce, employees have access to the employee engagement scores of each manager’s team and can use those as a gauge for which internal opportunities look most enticing.

Once the executive team is onboard, talent acquisition can take its rightful — and necessary — place in the middle of the effort. Talent acquisition doesn’t need to own the process, but it should facilitate it.

Recruiters need to be in a place to understand the company’s direction and future needs, its training and educational resources, and the processes and technology under consideration to make mobility possible. Recruiters, in turn, can be strategic advisors on what the career paths typically look like for high performers, on when it may still be better to buy than build talent, and on how to approach a whole menu of workforce planning issues.

No one — not even talent acquisition — can do this alone. “It really requires talent acquisition, HR business partners, learning and development, legal, compensation, and the employee experience team, if a company has that, to work together,” says Amy, who suggests the CHRO, if not the CEO, should own the whole process. 

Successful internal hiring also requires clear guidelines, sophisticated technology, and thoughtful candidate experience

Your internal mobility council needs to build clear and consistent guidelines for the movement of current employees into both full-time roles and short-term rotations or stretch assignments.

Companies that have structures in place will also need a technology platform that, ideally, functions as an internal job board, tracks and maybe even assesses employee skills, and serves up mentors, training, and rotations and part-time projects to employees who are eager to tackle something new. In short, businesses need what Josh Bersin calls “your internal LinkedIn inside your company — with recruiting features, training, and mentoring all included.” There are a handful of software companies furiously racing to meet this complex need. Among the better-known ones are Gloat, Fuel50, and Workday.

Recruiting and learning and development need to be attached at the hip on internal mobility, with talent acquisition regularly communicating to learning and development what skills are currently hard to find in the company workforce. “Project management, for example, is a role companies frequently recruit for,” Amy says. “It would be great if talent acquisition didn’t need to go external to hire for this type of role and companies could develop an internal learning program to help folks develop these skills.”

In addition to internal jobs that arise from a company-wide pivot, businesses can create more regular stretch opportunities. Google, for example, started what it calls its Bungee program that fills vacancies arising from parental leave with other employees.

And whether your employees are looking for a short-term gig or a full-time role, make sure they have a positive candidate experience. Communicate with them as often as you would an external candidate and interview and assess them the same way you do other applicants. If they don’t land the job, make sure that is communicated clearly and quickly. Encourage hiring managers to reach out and let internal candidates know where they fell short. As a bonus, offer up advice on skills or expertise they can develop to ready themselves for a similar opportunity in the future.

Final thoughts: ‘Across is the new up’

“The workplace is being reinvented in real time,” Fortune observed back in April. Businesses around the globe are reconsidering who works for them, where they work, when they work, and particularly how they work. Accenture foresees what it calls “the liquid workforce” — a blended group of full-time workers and contractors, consultants, and freelancers who can work anywhere and anytime for any period.

And just as project-driven employees will experience a more dynamic, nonlinear career path with a lot more stops along the way, recruiters may see their reqs become more focused on teams and projects rather than individuals and roles.

This new way of work should be good for business, driving greater innovation and agility, and it should be good for employees, setting up significant gains in their skill development, personal networks, and business exposure. For some, it will be a ticket to the C-suite: A 2016 LinkedIn study found that to land a job as a top executive it helped to have worked in as many company functions as possible.

 “It’s almost a necessity to move people sideways or diagonally,” says Erica Keswin, author of Bring Your Human to Work. “Across is the new up.”

Amy also sees the likelihood that getting ahead will increasingly be a lateral exercise. “I wonder whether over time,” she says, “we’re going to be less focused on job titles and moves up and more focused on simply moving. Work is going to be more like a rock-climbing wall than a ladder.”

For recruiters, this new workplace of both lateral and upward movement, means finding employees secure handholds and footholds that allow them to keep moving — and keep them from looking for a new climbing gym.

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