External hiring has always been expensive and time-consuming, putting constant pressure on talent teams to optimize the workforce on tight budgets. During times of economic headwinds or changes in workforce trends, talent leaders must navigate several challenges. At the same time, employees need career growth opportunities to be engaged at work, putting additional pressure on talent teams to engage and retain their existing workforce.
The solution lies in internal mobility. Not only does it improve engagement, but it also boosts retention by keeping driven employees inside the organization rather than looking for opportunities elsewhere.
What is internal mobility?
Internal mobility is an important talent strategy that allows employees to take on different job positions, projects, and growth opportunities within the same company. Also known as career or employee mobility, internal mobility is essential for all organizations that want to prioritize people development.
The most common type is upward mobility, although internal mobility encompasses all employee movement — be it a vertical or lateral move.
Despite its numerous advantages, internal mobility is still a rare phenomenon.
McKinsey has found that over 80% of role movements involve employees changing companies rather than moving to another position with the same employer.
When less than a fifth of employee movement is associated with internal mobility, it indicates a lack of opportunity within your company.
However, recent economic uncertainty combined with a tight labor market has created a shift in how employers fill open positions. They need to lower cost per hire, and cutting down on any expenses related to external hiring is their first order of business. Companies such as software provider ServiceNow have already ramped up internal hiring, filling 1,500 open positions internally in 2022.
6 examples of internal mobility
Internal mobility spans a wide range of role movements. The following are the most common ways you can incorporate employee mobility in your own organization:
- Promotions: Upward mobility is the most well-known type of internal movement. When a senior team member leaves their role, another employee takes their place.
- Transfers: Employee transfers can take place within the same department or from one department to another. For example, a member of customer success could step into a sales role.
- Additional projects: Employees can take on additional projects that normally don’t fall within their job description to gain new skills. Such projects can also help prepare them for a potential promotion or transfer.
- Mentorships: Mentoring helps junior employees learn from more experienced members of the team, plug skills gaps, and provides them with guidance on how to achieve their own career goals.
- New positions: Instead of hiring external candidates, existing employees can also step into brand new positions if they’ve shown the necessary skill development to take on a new role.
- Job swapping: A swap, where two employees temporarily switch roles, improves inter- and cross-departmental collaboration and fosters skill-sharing.
Why is internal mobility important?
The benefits of internal mobility for the workforce are clear: it engages top performers who are looking for a career change or have demonstrated they can do more for the organization.
But if you want your entire talent team to get on board an internal mobility strategy, you have to be able to make a strong business case. Below are the top ways your company can benefit from internal mobility.
Retains top talent
Organizations that allow employees to move vertically and laterally are more likely to retain them.
In fact, employees who get a promotion within three years of starting their job have a 70% chance of staying at the company, compared to 45% for people whose jobs stay the same.
Promotions aren’t the only way to improve retention rates — lateral movement matters too, with a 62% chance that the employee will remain at the company. It serves to show that people appreciate career development, even if it doesn’t immediately result in a promotion.
In previous years, favorable market conditions and a talent shortage made retention challenging. But even though the Great Resignation is now over in many industries, employers shouldn’t get too comfortable. Employees might be more risk-averse in an uncertain economy and think twice before quitting their job, but top performers (especially if they have a niche skill set) are always in demand. Career mobility opportunities will help you hold on to them.
Meeting DEI goals
Internal mobility programs provide important support to employees from underrepresented groups to grow their careers and be promoted to leadership positions.
This will have a positive ripple effect on the organization, as a more diverse leadership team will encourage other underrepresented employees to pursue new projects that lead to career development.
Scheduling company Chili Piper was able to achieve 50% female representation on its leadership team, thanks to one of its diversity strategies being an internal mobility initiative. The company implemented growth plans for employees to map out their career journeys, including the skills they need to acquire to achieve their goals. This helped them uncover employees with leadership potential and promote three women to the leadership team.
Saves time and cuts costs
Employee mobility, especially when it comes to filling key senior roles, generally costs less than hiring and onboarding an external candidate.
Although the reported average cost per hire is almost $4,700, numerous organizations cite total costs of bringing on a new worker that are much higher. The number can be anywhere from 3x to 4x the position’s salary, meaning that a role that pays $70,000 will cost around $210,000 to fill.
The reason is simple. Experts say that when department managers assist HR in reviewing applications, scheduling meetings and interviews, and making hiring decisions, they have less time to focus on business goals, which impacts ROI. And still, it’s difficult to guarantee that the new employee will be a good fit for the role.
However, talent teams can access a wealth of data on existing employees, such as performance reviews and 1:1 meeting notes. Using this information, they can better understand a candidate’s previous experience. Hiring from within also means organizations don’t have to worry about cultural fit or wait for the employee to get used to their new workplace. All of these factors contribute to a faster hiring process and time to productivity.
Creates a more engaged workforce
Opportunities for career development are a key driver of employee engagement. Employees — especially ambitious ones — want to work for an organization where they know their careers won’t stagnate. With an internal mobility policy, you can assure them they can advance their careers at their current workplace and motivate them to do their best work.
Take the manufacturing company Ingersoll Rand as an example. After implementing a comprehensive reskilling program to allow employees to move into new roles, the company saw employee engagement grow by nearly 30%.
Recent workforce research illustrates the pressing need to improve workforce engagement. Since 2020, the US employee engagement rate has been progressively getting lower, now sitting at 32%. Meanwhile, the rise of the “quiet quitting” phenomenon, where employees put in the bare minimum at work, is another indicator of how disconnected they feel from their workplace. At least one-half of US workers are quiet quitting, according to Gallup estimates.
A disengaged, unmotivated team not only threatens retention but also slows down innovation and jeopardizes the company’s long-term growth. In the current economic climate, organizations need people who are committed and motivated to succeed. When you provide team members with clarity around how they can evolve in their roles, you’ll provide assurance they’re working at a company where dedicated work pays off.
Improves business performance
Over time, higher employee engagement and retention result in better business performance. According to McKinsey, companies that achieve “top-tier profitability” invest in internal mobility alongside organizational capital. The latter refers to company culture and management systems and practices — including workflows, employee training, and department structures.
During tough economic periods, such organizations also show more resilience. Investing in their employees has allowed these companies to foster loyalty and engagement that keeps them on the growth track even as other businesses struggle to maintain profits.
Talent mobility is also an effective way to counteract a widespread issue — organizational silos. As businesses grow, departments become more isolated, with little collaboration across teams. Managers are unaware that employees in other teams might possess the exact skills needed to tackle a specific problem, which impacts productivity and deprives departments of a fresh perspective.
In an organization with strong internal mobility, however, cross-departmental collaboration results in increased empathy, creative problem-solving, and innovation that wouldn’t have been possible if employees had stayed locked into their previous positions.
Addresses skill gaps
Internal mobility is essential to addressing the ever-growing problem of skill gaps. Since 2017, the number of skills needed to perform a job has been growing by 10% year-over-year. And more than half (58%) of the workforce requires new skills to do their job.
Talent mobility, particularly mentorship and job swapping, provides employees with a concrete way to expand their skills. A company can launch a mentorship program if it determines that junior social media marketers need more experience in developing marketing strategies. Mentorship will allow junior team members to shadow more senior marketers to improve their strategy skills and understand what it takes to make career progress.
Beyond the immediate impact on employees’ skills, companies that adjust their HR processes to address skills improvement also see a 50% increase in employee engagement and a 40% increase in productivity.
How to successfully implement internal mobility
Getting leadership buy-in to promote internal mobility is only the first step. The next, more challenging step is implementation. Follow the best practices below to implement internal mobility as seamlessly as possible.
Develop an internal mobility policy
An official, company-wide internal mobility policy can be the difference between a successful program that supports the organization for the years to come and a program that fizzles out by the next quarter.
As you’re crafting your internal mobility policy, keep the following questions in mind:
What are the current talent mobility opportunities at your organization?
And in what ways can you improve or supplement them with additional types of internal mobility? It’s also important to evaluate the visibility of these opportunities. Employees may be unaware that transferring to another department is an option. Provide them with the information they need to pursue this kind of move.
A career progression framework will help create more transparency around the competencies needed to progress into each role and level. Greater transparency will also create a more equitable workplace where everyone has an equal opportunity to advance their careers.
How will you assess employee skills?
Most companies conduct some type of employee performance reviews. To ensure these reviews support internal mobility, they should include recommendations for specific skills and areas where the employee can develop further.
The recommendations may also take into account the employee’s desired career path — prospective people managers can be advised to take leadership training, for instance.
How will managers support the movement of employees?
Managers are key to encouraging and educating employees on how to approach their career development. One-on-one meetings, organized on a weekly or semi-weekly basis, are an excellent venue for managers to discuss internal mobility with their direct reports.
Adopt a skills-based hiring model
A skills-based hiring model prioritizes foundational skills needed for a specific role, with the understanding that the successful candidate will later upskill. By focusing on the most important skills, you can consider more internal candidates for open roles.
But an organization that is “chasing unicorns,” as McKinsey puts it, will struggle to attract talent, improve internal mobility, and increase diversity. Unicorns are perfect candidates whose education and work experience check off all the boxes the hiring manager is looking for. This approach will lead you to ignore the internal talent that has already shown the ability to learn new skills and would likely be successful in upskilling for their new position.
Invest in the right technology
Companies need talent-sourcing technology that allows them to surface qualified internal candidates and search for new candidates at the same time and in the same place.
But most hiring teams today rely on different kinds of technologies to find qualified candidates inside and outside the organization. This is an unnecessarily complex process due to siloed systems – finding the right person for any role requires teams to use recruiting agencies, LinkedIn, job boards, etc.
Adding internal candidates into the mix only adds to the complexity – employee databases are rarely updated with the skills and experience employees have gained since they were hired, so recruiters default to external hiring.
To overcome these challenges and easily identify the right internal and external candidates, talent teams need unified talent sourcing that allows recruiters and hiring managers to find the most qualified candidates from their entire talent ecosystem in one place.
They need the ability to see their existing workforce with the enriched skills and experience data that goes beyond outdated and static resumes – and to do this at scale. This is crucial for internal candidates who aren’t likely to update their resume or LinkedIn unless they are looking for a new job.
For example, Findem’s AI talent sourcing solution searches for talent based on the attributes hiring managers need across 100,000 data sources, including GitHub, ResearchGate, Stack Overflow, and company earnings calls. Attributes may include “open source contributor” or “early-stage startup experience.” Findem then includes this data as part of the candidate’s enriched profile, allowing you to rapidly and easily find the precise talent for the role.
When it comes to evaluating internal talent, attribute-based search allows recruiters to see the kind of work they’ve done at the company alongside the skills and experience they may have acquired externally and then match them with open roles.
Potential challenges to expect
Many of the challenges associated with implementing internal mobility initiatives are related to company culture and management attitudes.
If there is a general lack of transparency and visibility of talent experience and skills in the company, then it will be more difficult to implement career progression frameworks that enable employee mobility at all levels.
From a diversity perspective, if people from underrepresented groups do not see people like themselves in leadership positions, they might not raise their hands to advance into a new role. Instead, management might need to provide support to encourage them to apply for promotions and transfers.
The company might also have to change the way it announces open positions, such as by implementing an internal job board instead of sharing internal opportunities in private emails or Slack groups.
In some companies, managers might be prone to talent hoarding, afraid of what will happen to their team if their top performers were to move to another department. Talent hoarding is often a result of poor workplace culture where departments compete against each other instead of working together for a shared goal.
Talent acquisition teams that look for unicorn candidates will also have to rethink their hiring approach. As discussed above, internal hiring has the most success in organizations that make the distinction between foundational skills and skills the employee can learn while on the job. Without this distinction, it will be challenging for employees to move — vertically or laterally.
Support your internal mobility program with the right tech stack
Integrated recruiting tools that automatically include your employees as part of your talent ecosystem will help you identify people inside your organization who are ready to transition into new roles. However, not all recruiting tech delivers the same type of candidate insights.
Our recruiting tech stack checklist provides a list of helpful questions that will guide you to the right solutions, so you can reduce the time to hire and automate manual processes without creating more work for the recruiting team.