As more and more companies around the world struggle with employee retention and turnover, one topic should be at the top of every HR professionals mind: internal mobility.
By and large, a lack of growth opportunities is a leading cause of why employees leave a company. Offering vertical and lateral movement opportunities within your company - backed by professional development, training, and upskilling opportunities - will help to deter your high performers from looking for opportunities elsewhere.
What is internal mobility?
Internal mobility is crucial for utilizing talent within your organization. However, most organizations often ignore their most potential employees and concentrate all focus on outside talent with the hope of finding a unicorn hire to take their business to sky-high levels.
All the motions of external recruitment may not be necessary as sometimes the great talent you are trying so hard to find could already be part of your workforce.
In the face of the Great Resignation and the current economic downturn, many employers are forced to rethink their approach to hiring and retention. Research shows that among the key concerns for executive teams is how to keep their best employees from jumping ship. This has made internal mobility a top priority for sustaining an organization's success and future growth.
Offering your employees vertical and lateral movement opportunities backed by professional development, training, and up-skilling opportunities will minimize the chances of high performers seeking opportunities elsewhere.
Why is internal mobility important in 2023 (and beyond?)
Hiring new employees is a stressful, costly, and time-consuming affair. This is what many employers are currently struggling with, sourcing the right candidates to fill their open roles. However, they are forgetting that they may already have the right talent and are just yet to recognize it.
This is where internal mobility or talent mobility comes in. It helps organizations repurpose valuable talent while saving on time and costs associated with employees leaving and finding their replacements.
The reality is, in today's economy, roles are constantly changing and skills shifting, making it difficult for employees to plan their career paths. Therefore, if your organization still puts employees in 'boxes', you are holding them and your success back.
Suppose you are serious about developing business agility for the current unpredictable economy. In that case, you need to look at your workforce at the skill level and lean into ways to bring skills fluidly where they are required to solve existing business problems.
The driving factors behind the Great Resignation are the desire for change, new growth opportunities, and more flexibility. Employees have become more aware, and if a work arrangement does not fulfill their personal and professional aspirations, they are willing to let go and find one that does.
Your retention rates will decline significantly if your company does not have room to grow and develop talent. Understanding why internal mobility is important will help first understand the issues at play relevant to the topic.
Some of these benefits include:
- Shifted workplace demographics. Millennials and Gen Z are now the two dominant age groups in the workforce. These professionals, on average, stay with companies for much shorter periods of time than their older co-workers. Growth opportunities - or a lack thereof - are at the top of the list of priorities for these generations. Internal mobility opportunities, therefore, are essential when attempting to retain these workers long term.
- Career advancement is still a #1 priority. According to a recent survey by Gallup, a lack of career advancement topped the list of reasons why people leave their jobs. And in that same survey, employees who felt that their supervisors encourage development were 92% more likely to be with their company one year later. Clearly, internal mobility is a major priority for your employees. It should be for you too.
- Most hiring is done to fill existing positions. According to the US Census and Bureau of Labor Statistics, 95% of hiring in the United States is done to fill existing positions. That means that recruiters spend most of their time - and budget - on replacing people and skills, rather than acquiring new ones to drive the company forward. That is a huge drain on resources, and a major sign of issues with employee retention and development.
- Workplaces are full of untapped talent. Virtually every organization has employees who are not living up to their full potential for one reason or another. Often, that’s because there’s a failure to identify and nurture potential. Companies that take a deliberate approach to coaching and mentoring, and who tie that into growth and development plans, are able to leverage that potential to help drive the company forward.
- The competition for talent is red hot. Depending on your industry, the talent market is really tight at this point in 2021. This is facilitated by a shift to remote work that is giving employees more options than they did pre-pandemic (again, depending on the industry). This causes a headache for companies who aren’t prioritizing internal mobility. Remember the Great Resignation? For those who are, this is a golden opportunity to nurture and retain your best employees, even when other companies may be losing them. All it takes is a deliberate effort to encourage upskilling, professional development, and growth.
Each of these above points boils down to one key takeaway: employees don’t necessarily want to leave your organization. But, if your company is not actively encouraging internal mobility and growth, then they may feel like they have no other option but to leave.
If you’re reading this, then it’s likely your job to give your employees a reason to stay. Let’s talk about how to do that.
What are the different types of internal mobility?
From the definition of internal mobility, the first thing that comes into most people's minds is promotion. However, the movement of employees within an organization can take several approaches through which they can experience growth and advancement.
Types of internal mobility approaches organizations can employ include:
Vertical mobility
In this type of mobility, an employee moves up the hierarchy to a higher job class, often with more responsibilities and a better reward within the same department. It may also bring a change in status and benefits.
The upward movement is usually attributed to excellent performance and is a way to boost employee satisfaction, engagement, morale, and productivity. When other employees see their colleagues being recognized for their good work, it sends them a positive signal that their efforts will be rewarded and that your organization values internal mobility.
Vertical mobility is also referred to as upward mobility and is mostly based on performance and benchmarking. However, a promotion does not have to be cross-functional to be rewarding. For example, a promotion from a marketing supervisor to a marketing manager does not change the nature of the job. Still, the new position could mean more people benefit from your skills and expertise.
Lateral mobility
Lateral mobility is also known as role-to-role mobility and refers to a job change where an employee moves from one position to another with little to no change in their benefits or hierarchy.
In this case, the employee is only transferring their skills from their current role to the new role. It may not seem like much, but lateral mobility can still benefit your company and employees. It opens employees to new challenges and an opportunity to test different roles while applying the knowledge they have of your business.
At the same time, it diversifies your internal talent pool so that recruiters do not have to externally source candidates for roles that can be filled with existing talent.
Project-based mobility
As the name suggests, project-based mobility is executed to fulfill a short-term common goal. It brings together teams or employees of different functional expertise to provide wider and fresh perspectives and encourage innovation.
Project-based mobility allows employees to meaningfully contribute to projects that ordinarily deviate from their usual workflow and department.This is a good idea for organizations to optimize their internal talent. Instead of employees applying for a job change, they can request to participate in various projects across the organization.
Employees from different departments and roles get an opportunity to collaborate and use skills they would otherwise not use in a typical day to contribute to the short-term organizational goal. Role-to-role mobility helps boost productivity, promotes skill-building and growth, and improves interdepartmental coordination and communication.
Demotion
There is a negative connotation to this type of mobility as it's usually associated with poor performance. Demotion is the opposite of promotion, where an employee is reassigned to a lower job level instead of an upwards movement.
However, demotions are not just used for poor-performing employees. It is still a way to help employees gain skills and work experience they do not have, even for a lower job level. Employees sometimes might ask to change their roles to focus on other personal issues like parenting, going to school, or caregiving.
Transfers
A transfer is the movement of an employee from one job to another without significant change in duties, responsibilities, or compensation. It may involve moving to a new department or location within the same organization.
Internal mobility strategies and best practices
Before we jump into strategies and best practices for internal mobility, let’s step back and look at some obstacles you’re likely to face.
The three main ones include:
- Assumptions about what it takes to succeed. Hiring managers may have an idea in their head about what it will take for a candidate to succeed in a vacant position. That assumption may not jive with what they know - or what they’ve seen - from the employees around them. As such, that manager will likely look for external talent, rather than identifying potential in an existing team member to fill that role.
- Employees not wanting to appear disloyal. There may be an unspoken reluctance amongst employees to show interest in moving from their existing role. This may be out of fear of appearing disloyal to their manager, or ungrateful for their current job. In these cases, otherwise qualified employees will be overlooked due to a simple lack of confidence in the system.
- Focus on existing skills rather than potential. Recruiters and hiring managers often get caught up in an employee’s or candidate’s existing skills, rather than their potential. As such, they’re more likely to hire someone externally who can demonstrate the desired skill set. This overlooks existing employees who may be interested in developing those skills, which can cause resentment.
All three of these obstacles may be deep seated within an organization. They will need to be addressed using a systematic and strategic approach that not only encourages but rewards internal mobility and development.
That’s where internal mobility best practices come into play. Let’s dig into those now.
1. Remove the taboo around internal mobility
First and foremost, you must make it clear that internal mobility is not only acceptable but encouraged at your organization.
Talk candidly with your teams - from the top down - about the benefits of internal mobility both within and between departments. Encourage managers to talk to their direct reports about internal opportunities and growth paths. Share the news when employees make internal moves, and congratulate them for the new opportunity. Make it clear that every employee is welcome to seek new internal opportunities if they wish.
The goal here is to make internal mobility the norm at your company, rather than something that people are reluctant to talk about.
2. Empower your middle management
Managers are the first point of contact for employees who may want to make an internal move. As such, their job can be a tricky one. They must be both subject matter experts and people managers who can identify and nurture potential in their direct reports.
If internal mobility is to be a priority at your organization, then you’ll need to provide support to your middle managers. That means providing coaching and training in people management, mentorship, and skills assessment.
It also means communicating the value of internal mobility to middle management, and giving them the power and budget they need to nurture their employees to the next level.
3. Create an internal mobility strategy
Your internal mobility strategy sits at the crossroads of all the other best practices identified here. This is where making a “deliberate” effort to facilitate internal mobility comes to fruition.
No two strategies will look the same, but they should include:
- Proactive gap analyses to identify what skills you currently have, what you need, and where they are likely to come from.
- A communications program to demonstrate the value of internal mobility.
- A process for employees to follow when they are interested in an internal position, or want to work towards vertical movement.
- Trackable KPIs, including the number of employees you’d like to see move internally each year.
- Training and mentorship programs to help managers identify and nurture high potential employees.
Ideally, this strategy should form a coherent internal mobility program that makes it clear how employees can make vertical or lateral moves within your organization.
4. Create careers paths for employees
Ideally, every employee within your organization should know what the next step in their professional journey will look like at your company, and what they need to do to get there.
This typically starts with empowering managers to work with their teams to develop tailored development paths, personal goals, and learning plans. These should coincide with a clear “next step” in the employee’s career path: be it a promotion or a lateral move.
If you do this, it’s critical that you reward employees who meet their goals. That means giving raises, new responsibilities, or promotions.
5. Make learning and development a priority
Learning and development is the means by which employees get to the stage where they can move internally. To boost the frequency of internal moves, therefore, you should strive to create and nurture a culture of continuous learning at your organizing.
That means:
- Providing the right L&D tools and content
- Encouraging and rewarding employees for professional development and upskilling
- Communicating the value of L&D
L&D is one of the most effective ways to ensure that your organization maintains a forward trajectory in terms of skills and innovation, and will help to boost long term retention amongst your best employees.
6. Stop defaulting to external recruitment
Too often, organizations will take a default stance that they need to recruit external talent to fill skills gaps and leadership needs. While that may be true in some cases, it overlooks the large pool of potentially qualified candidates that you have internally.
If internal mobility is a priority, then you should add an extra step to the start of your talent acquisition process to promote openings to your existing employees. Make the job requirements and skills expectations clear, and encourage those who feel like it could be a good fit to apply.
This is where the ground work you’ve done to normalize internal mobility and encourage managers to identify potential pays dividends. It’s possible that, out of this extra step, an internal candidate will step forward who has been working toward the exact type of job you’re looking to fill.
If your internal recruitment efforts are successful, then you not only reward a valuable employee with a new position, but you also side step the costs of sourcing, screening, and onboarding new candidates. Bonus: that internal candidate already knows your company, the culture, and your workflows, so their time to productivity is much shorter.
7. Use the right tech
Last, but certainly not least, you need to leverage the right tools to facilitate internal mobility at scale.
Ideally, you should have a tech stack that allows you to:
- Create an internal job board
- Collect and analyze internal applicants
- Assess and track internal candidates based on skills and performance
- Integrate with an L&D platform to offer ongoing training and upskilling
Josh Bersin, a leading analyst in the HR tech space, describes this tech as “your internal LinkedIn inside your organization - with recruiting features, training and mentoring all included.”
Why should internal mobility be part of your organization's strategy?
Internal mobility is a win-win for employees and employers. Your workers gain new skills while moving into roles they are passionate about, which positively impacts your business performance.
To understand in detail why internal mobility is a top concern among executives, we explain some of the benefits associated with its successful implementation:
Promotes talent retention
The biggest impact of a successful internal mobility strategy is retention. According to LinkedIn, organizations that invest in internal mobility practices have their employees stay almost two times longer on average.
Employees will stay with your organization for longer when they know they have options to grow and advance their careers. Practicing internal mobility indicates to your employees and prospective that you support career goals and advancement and will not hesitate to invest in them.
Improves engagement and morale
Prioritizing your current employees for open roles shows that you recognize their value and potential. This approach will strengthen their sense of belonging to the organization and boost their morale and engagement.
When employees feel valued and supported, they develop a positive attitude toward their work, which translates to improved productivity and performance.
Moreover, when people are allowed to learn new skills and transition to roles they have a keen interest in, they are more enthusiastic and motivated to give their best. It also brings a sense of fulfillment, promoting job satisfaction and positive employee experiences.
Boosts cross-functional collaboration
Talent mobility plays a key role in developing an agile environment where employees can try on different roles, tackle different projects, test and develop new skills and shift either laterally or vertically in their careers.
Cross-collaboration makes optimal use of the talent within your organization and most importantly gives your team the chance to fill skill gaps without hiring externally.
Cross-functional collaboration helps your organization build a diverse team and could be an opportunity for employees to discover what they are good at and passionate about.
Cost-effective
Recruiting externally is expensive and time-consuming. It is estimated that the average cost of onboarding a new employee is almost $4700, and this does not include the cost of downtime from having a role stay open as you wait to fill it.
However, all this trouble can be avoided if you were to hire internally. Not only will you cut back on the hiring costs and time, but you will also have the benefit of getting someone that is already familiarized with your organizational culture.
In the current highly competitive market, more is needed to attract top talent. Organizations also need to revamp their approaches to talent acquisition and retention to get an edge over the competition.
Careers no longer follow a linear path and have become very fluid and unpredictable. Therefore by practicing internal mobility and hiring from within, you are giving employees a chance to pursue their passions, develop their skills and try their hand at something new.
