Over the past few months, the economy has started to turn, and the tech industry is being hit hard. The current hiring freezes and mass layoffs (Meta, Klarna, Salesforce Uber, and more have fired thousands of their employees) show that thorough headcount planning is more important than ever.
- How many people should we hire?
- Should we hire at all?
- How can we ensure that our current employees are within the roles that fit them best?
These are questions we need to ask planning ahead as we prepare for the year ahead. While an overwhelming majority of enterprises know that talent mobility is important, a Deloitte survey shows that just 6% of them believe their organization is “excellent” at enabling it.
What we’ve noticed by talking to many of our customers is that there seem to be a few root causes of this. In this blog, we’ll dive into what exactly internal mobility is, what often goes wrong and what practices you can apply to ensure an internal mobility process that is fair, and transparent. All while encouraging employees to stay and grow within your company.
Why internal mobility matters now even more than before
There are five reasons why internal mobility matters more now than it did ever before:
- The Great Resignation. 94% of workers say they would stay at a company longer if it invested in their careers. An internal mobility strategy shows that you’re serious about employee growth and that you have the systems and structures in place to help people achieve their professional ambitions.
- Job Hopping. The times of working in one role and company for 20 to 30 years are long gone. The new generations, millennials and Gen Z’s crave to acquire new skills, and professional growth to gain new opportunities. Why would they look for this externally from your company if they can further develop within?
- Talent shortage. The war for talent is at its peak – 10 days is the average number of days before top candidates are off the market. While this figure is frightening, solutions do already exist. What if we told you that you might already have quite some candidates with top-performance potential working for you? You can reduce your talent shortage by focusing on the professional development of your employees and internal mobility.
- Hiring freeze. Companies seem to feel like letting go of employees in certain departments and cutting costs is a good way to buckle up for what might be a bumpy ride in the upcoming year. However, before you even think of firing your employees, you should think about repurposing talent and promoting internal mobility. This way moving from hiring freeze to a firing freeze.
- The Reskilling Revolution. In the next decade, 1.1 billion jobs are liable to be radically transformed by technology and this marks the beginning of the Reskilling Revolution. As reskilling involves a shift in career trajectory, it’s an attractive option for employees looking for new opportunities (especially new opportunities internally). After all, these activities equip them with new skills that can benefit them greatly.
Internal Mobility: What often goes wrong
Now you know why internal mobility is important. At large companies, however, it is not always properly executed. Let the numbers speak for themselves:
- Just 6% of companies believe they’re excelling at internal mobility.
- 76% of organizations see internal mobility as critical, yet just 40% are ready for it.
- 56% of companies feel they’re doing an inadequate job of leveraging the talent they already have.
- Only 14% of business executives strongly agree that their organization is using the workforce’s skills and capabilities to their fullest potential.
What are the obstacles standing in the way of creating internal mobility processes that actually pay off?
4 things that most commonly go wrong when it comes to internal mobility
Most of us are unaware of the skills within our internal talent pool
Around 87% of companies worldwide say they already have existing skill gaps. Yet, research by Human Capital Research Firm Institute for Corporate Productivity (i4cp) found that most companies don’t even know the skills and capabilities of their current workforce:
- Only 12% consider upskilling or reskilling efforts in their organizations to be effective.
- Only 15% indicate their organizations are highly effective at analyzing the gap between current workforce capabilities and future business requirements.
- 27% believe LinkedIn knows more about their workforces than their organizations do.
- 39% say it’s easier for their employees to find jobs externally than internally (talk about retention issues…).
- 43% of those surveyed don’t have a process for analyzing workforce skills.
- Just 10% of those surveyed reported having an employee skills database or inventory with profiles for all employees.
We look for existing attributes rather than potential
As a result of the Great Resignation and retention issues, many talent acquisition specialists are feeling the pressure of filling existing talent gaps as quickly as possible. Thus, choosing to hire talent based on a set job description & requirements. Which is perceived as a faster alternative than trying to source or develop talent internally.
However, in this situation – you end up focusing more on existing attributes rather than the potential of your already existing team members.
Valuing stability over flexibility
For decades, employees have been expected to climb linear career ladders. These paths do not leave much room for internal mobility and typically don’t provide employees with a lot of visibility into roles and opportunities in other parts of the organization.
A popular assumption is that the only way an employee can move up is by doing more of the same.
“You can’t have somebody work for marketing if they worked for an engineering team before, that would make no sense”.
With the war for talent intensifying, flexibility should be put over stability. To remain competitive, moving away from traditional career ladders and promoting a more dynamic workplace where your employees have both horizontal and vertical opportunities is the recipe for success. If your hiring approach is agile, your current internal talent pool can be perceived as an existing talent marketplace. It’s already super difficult to get the right people in. Yet that’s exactly why you should refrain from wasting talent that you have internally.
Lack of vision into skills needed for the future
In a report published by the World Economic Forum, they estimate that 85 million existing jobs will be replaced in the next 3 years by new jobs.
Thus, we cannot continue basing candidate assessment on previous experience since there won’t be any previous experience in currently emerging jobs. The future is about transferable skills and potential that candidates can bring to the table.
This means it will become impossible to assess employees and candidates based on previous experiences, while learning ability will get more and more important. Learning ability is one type of cognitive ability. It describes how well and efficiently we can retain new information, connect it to already-known information and make use of it. Working memory is the underlying process thereof. It functions as an extension of our short-term memory and describes how well we work with information that we just learned.
However, the majority of decisions when it comes to internal mobility are still based on aspects that are out-of-date and simply not predictive of future job performance:
- The correlation between education and job performance is 0.10;
- The correlation between work experience and job performance is 0.16.
Internal Mobility: Where to Start?
Step 1. Create a business case for internal mobility
Most recruitment teams are already aware of the benefits of internal mobility and using it as a critical talent acquisition strategy – improved employer brand, improved retention and more strategic approach to recruitment as a whole. Yet, what if some of the other business decisions-makers are still sceptical about it?
To build a business case for internal mobility, try to link the benefits to recruitment metrics and bottom-line savings, namely:
- Reduced turnover costs. Internal hires have existing relationships within your company and are connected to your culture and values. Internal mobility reduces recruitment and replacement costs because new starters don’t disrupt your culture or require assimilating into it. On top of that, especially millennials expect the opportunity to grow within an organisation. Without internal mobility, they’ll likely look elsewhere.
- Reduced overall recruitment costs. A strong employer brand and culture will position your organisation to not only attract external talent but also retain existing talent. By looking for talent within your organisation, you’ll be able to effectively scale back on recruitment costs.
Step 2. Create a framework for internal mobility
Use skills, rather than jobs, to make decisions
Most companies currently follow a job-based approach to talent development. The problem is that job frameworks may be too rigid for companies operating in unpredictable or rapidly changing skills environments. Shifting to a skills-focused approach when hiring is a viable solution to these ever-evolving hiring challenges that face us.
And in fact, analysis by Deloitte shows that a skills-based approach leads to way more overall benefits than an approach that is not.
Improve overall team performance by identifying skill gaps
Whether you have 50 employees, 500, or 1,000+, chances are that you are not aware of every skill your employees possess. Without being aware of this, effective and efficient internal mobility will not be possible.
That’s why getting started with internal mobility begins by identifying existing skill gaps on both a team and individual level. One way to do this is by conducting a skill gap analysis which can be manually done by asking your employees to complete a SWOT analysis, collecting employee feedback and comparing the changes over time, or using skill gap questionnaires/surveys. However, one of the most popular and efficient ways to measure skill gaps is by using assessment tools. Assessments allow you to gather valuable insights about employees in a standardized and objective manner. And quickly, with barely any human effort required.
Begin looking at potential over experience
To unlock the full potential of human capital in the face of constant change you are facing now more than ever, you need to shift from standardization to uniqueness, treating talent not as a consolidated economic resource but as sets of distinct personalities, each set with different needs, capabilities, and potential and each able to make a unique contribution to our company.
It’s time to start hiring people based on their potential.
Step 4. Choose the right tooling
Ultimately, the most successful internal mobility programs involve investing in the right tooling.
Employing tooling, such as game-based assessments for the purposes of internal mobility can help you supercharge the talent mobility efforts by basing decisions upon decades of neuroscientific research to match the cognitive abilities and behavioural traits of candidates with open roles within your company.
The two aspects that have been scientifically proven to be great predictors of future performance:
- Cognitive ability/GMA has proven to be the most significant predictor of work performance, with a correlation of 0.65-0.74
- Behaviour has proven to be a significant predictor of work performance, with a correlation of 0.45
Source: Schmidt, F. L. (2016). The Validity and Utility of Selection Methods in Personnel Psychology: Practical and Theoretical Implications of 100 Years of Research Findings.
Step 5. Providing the same internal objective benchmark for both internal & external hires
By comparing existing team dynamics (cognitive benchmarks and skill gaps) to the profiles of candidates, you’ll be able to set benchmarks. This way allows you to find your best candidates easily, by sorting and filtering based on their assessment results.
This will allow you to plan for the future and have a very clear idea of the type of talent you’re looking for, want to attract, and will accept as a new part of your team or teams. Whether you decide to recruit internally or externally, these objectively collected data points help you make hiring decisions that are future-proof.
Across is the new up. Ready to future-proof your business?
In a world where the competition for talent is fierce, leveraging the star employees you already have, and focusing on the future potential of candidates, can help both your recruiting team and organization at large adapt to the demands and realities of hiring today.
When it comes to internal mobility, across is the new up.