The Power of Internal Mobility

Recruiting and retaining the right employees has become much more difficult as competition for positions increases significantly. This has pushed organizations to hunt for highly skilled employees to compete in the global marketplace.

In today’s rapidly evolving business landscape, L&D leaders face a critical challenge: building a future-ready workforce while managing mounting recruitment costs and increasing turnover rates. While many organizations instinctively look outward to address their talent needs, the most effective solution might already exist within their ranks.

Internal mobility has emerged as a strategic imperative that goes beyond traditional career development. According to LinkedIn’s 2023 Global Talent Trends Report, organizations with robust internal mobility programs see 41% longer employee tenure and 64% higher retention after three years. For L&D leaders, this presents a unique opportunity to transform talent strategy while delivering measurable business impact.

However, while many organizations look outward, they often overlook a crucial resource that lies within- their current employees.

How Internal Mobility is Reshaping Hiring Strategies

Internal Mobility: Moving employees from one position to another within the organization, is a game-changer that companies increasingly leverage to streamline operations and control costs. Companies that prioritize internal mobility reduce hiring costs by up to 18% compared to external hiring and save on replacement costs, which can reach around 85% of an employee’s salary.

Moreover, internal mobility speeds up the hiring process, as internal candidates typically fill roles 20-30% faster than external hires, who require longer onboarding times to reach full productivity.

Through promotions or lateral movements, internal mobility benefits the growth of the existing workforce and the organization’s goals by keeping them strong and upright in a challenging and evolving environment.

The Growing Challenge: Talent Shortages and Skill Gaps

Today, organizations worldwide are facing a talent deficit for in-demand technology skills that is getting worse due to continuous advancements in technology.

In a recent Global Competitiveness Report, the World Economic Forum estimates that by 2025, 85 million jobs may remain unfulfilled because of the skills gap worldwide.

According to the World Economic Forum’s Future of Jobs Report 2023, about 44% of core workforce skills are expected to change by 2027, and nearly half of all workers will require substantial reskilling within the next five years.

As companies go through digital transformations, the requirement for new and specialized skills rises, causing businesses to struggle to keep pace.

The “Great Rebalance” marks a shift as companies adapt their talent strategies to the demands of generative AI and new workforce expectations.

Organizations are now focused on building agile, AI-ready workforces that align with both technological advancements and evolving workforce preferences. This shift has redefined talent management strategies to prioritize skill development in AI and adaptability.

As a result of this, many organizations shifted to external recruitment to fill these vacancies. However, this approach proved to be time-consuming & very expensive.

According to the SHRM (Society for Human Resource Management) survey, the average recruitment cost is $4,700 per new employee, excluding the costs of recruiting time and the resources required for onboarding.

That number will rise faster for senior or technical positions. Meanwhile, internal employees seem to be cost-effective, more accessible to recruit, and more likely to fit the company culture.

However, cost efficiency is just one factor behind the company’s focus on strengthening its internal business environment.

There is also an ever-increasing demand for upskilling, development, and career progression.

Today’s talents are not just seeking jobs but growth opportunities. Organizations that don’t offer such possibilities risk losing their human resources, especially to competitors who provide them.

Why Internal Mobility Is the Key to Unlocking Talent

1. Retaining Top Talent

Internal mobility’s key advantage is its capacity to retain highly skilled employees. When employees have career development opportunities, they are more likely to stay with the organization.

Moreover, companies with high internal mobility rates keep their employees on average for 5.4 years compared with 2.9 years in companies with low internal mobility rates.

According to Gallup reports, 87% of millennials state that they consider development a vital factor when selecting a job.

Employees are likely to move to new organizations when they don’t see any career advancements.

Internal mobility is a perfect solution that shows employees there are options to explore new roles & projects within the organization, thus ensuring that top talents don’t have to move to another company.

2. Faster Time to Productivity

External hires usually take a long time to reach peak productivity.

According to the National Bureau of Economic Research (NBER) survey, external recruits take 18-24 months to reach the performance level of internal hires.

On the other hand, in-house talents are always in tune with the firm’s operations, values, objectives, and strategy, thus progressing much faster.

Furthermore, internal employees have many organizational skills that external candidates cannot match. They are well aware of the company’s goals, internal team dynamics, and client base.

This allows employees to smoothly transition to other roles, particularly managerial and even cross-functional ones, driving quick business results.

3. Cost Savings and Efficiency

External hiring is expensive not just because of the amount spent on recruitment fees and other ads but also because of the time invested in identifying, interviewing, and onboarding candidates.

According to SHRM, turnover costs are estimated to be as high as 33% of an employee’s annual pay.

On the other hand, internal employees are cost-effective to hire because minimum onboarding is only required, and they are already more oriented toward the company’s values.

A Workday survey showed that 46% of companies that focused on internal mobility experienced a decrease in recruitment costs.

This is because, unlike companies that source candidates externally or even those that offer elaborate hire-and-train programs, companies that fill positions internally don’t spend a lot of money sourcing candidates or making elaborate efforts to help their new hires perform well.

4. Addressing Skill Gaps

The increasing advancements in technology are transforming industries, and organizations are constantly looking for employees who are capable of filling the newly emerging roles.

Achieving this solely through external hiring can be very challenging. However, through internal mobility, organizations can enhance their existing workforce with the right skills and knowledge to succeed in new positions.

Based on LinkedIn data, 73% of learning and development leaders expressed that internal mobility has a positive impact on an organization’s capacity to address crucial skill gaps.

Organizations that offer internal movement opportunities along with training programs can be confident that employees are ready to hit the ground running, thus eliminating the need for external recruitment.

How to Make Internal Mobility a Core Talent Strategy

To maximize the benefits of internal mobility, organizations should integrate it into their culture and processes. Let’s see how

1. Foster a Culture of Mobility

It is crucial to build a system that promotes internal mobility.

Employees need to feel empowered to look for new challenges at work without worrying about the consequences.

This demands clear communication from top management and systems that facilitate career shifts and internal job postings.

2. Invest in Learning and Development

Learning and development are the key factors driving internal mobility in an organization.

Upskilling employees for new positions ensures that they are ready for the transformation.

In addition, companies that offer diverse development programs, such as leadership training and technical skill building, encourage the workforce to face new challenges head-on.

3. Leverage Data for Talent Mapping

Data-driven insights are essential to identifying employees’ readiness for internal transitions.

HR leaders can track employee performance, skill gaps, and career goals using talent analytics tools, to map employees with suitable opportunities within the organization.

4. Recognize and Reward Mobility

Celebrating employees who take on new positions promotes a culture that values growth.

Performance incentives, public acknowledgment, and promotions associated with internal mobility lead to employee loyalty and great engagement.

A Win-Win for Organizations & Employees

The benefits of internal mobility are evident- better employee retention, reduced recruitment costs, enhanced productivity, and a more efficient approach to filling skill gaps.

Companies that invest in internal mobility will not only retain the best employees but also create a more flexible and robust workforce that can easily adapt to evolving industry changes.

Organizations can future-proof workforce by establishing a culture of internal mobility, utilizing data to identify talent, rewarding transitions, and focusing on learning and development.

With an increase in the competitive market, internal mobility will be a critical strategic success factor that ensures long-term success.

Here comes the question!

How can organizations find the right platform to effectively upskill their workforce to support internal mobility?

Tekstac is the answer – a 360° skilling platform that provides tailored learning programs and resources, thereby ensuring employees are equipped with the right skills to confidently take on new roles.