Are companies overlooking their greatest source of talent?

Organisations that lack a culture of internal mobility run the risk of damaging their reputations in the marketplace.

Leaders know effective strategic execution requires having the right people and teams in place. Finding skilled workers can be an ongoing struggle, particularly when the job market is strong. It’s no wonder the tasks of recruiting, promoting, and retaining talent consume so many C-suite conversations.

Why, then, do so many companies seem to overlook their greatest source of talent: their own workforces? Large companies employ tens of thousands of people across geographies, industries, and functions. An inability to identify and promote the best employees to higher-level positions can lead to low morale, high turnover, and, ultimately, a weak brand in the job market.

It may be time for companies to look inward and ensure they have a culture that emphasises internal mobility if they want to attract and retain the best people.

The business case for prioritising employee development is clear. Though employee departures can yield short-term savings in reduced salary and benefits costs, they are often offset by increased costs from an overall loss of productivity, loss of institutional knowledge, and recruiting and training costs for replacements. Bersin™, part of Deloitte Consulting LLP, estimates the departure of a salaried employee earning $130,000 a year in compensation and benefits results in a nearly $110,000 loss when replacement costs and lost productivity are factored in.

Beyond the dollars, an organisation with high turnover can also create a negative talent cycle, which can be difficult to overcome. A scarcity of employerbacked career planning and development options can lead to a shortage of the skills required for continued success in the organisation, resulting in little or no internal mobility and prompting many of the best employees to leave. The company can develop a reputation for being unsupportive of career advancement. That reputation tarnishes the company’s brand in the employment market, discouraging external talent from applying for jobs.

Companies can both improve their bottom lines and boost their brands as employers by prioritising internal mobility strategies and opportunities. However, doing so may require a real cultural shift.

For all the talk of robotics, AI, and other advanced technologies, organisations depend on people to run smoothly. Despite the increased prevalence of jobrelated social networks, finding skilled employees can be difficult, particularly in a healthy job market. According to Gallup research, roughly one-half of all workers may be thinking about leaving their jobs, which they can do easily if they have the right skills in the current bullish economy.

Such job movement isn’t just driven by the allure of more money; career development is also an important factor. Surveys show most workers – and partic- ularly millennials – expect to be promoted from within. Absent advancement opportunities, ambitious employees will likely head toward greener pastures.

Though many executives understand the value of inside hires, putting programs into practice seems more difficult. A 2015 survey found 87 percent of employers agreed a strong internal mobility program would help increase employee retention and attract better candidates; only 33 percent, however, said they had such a program.

In some cases, mechanical fixes—such as better job posting systems—could improve internal recruitment. Other problems may be more systemic. Strange as it may seem, some company cul- tures discourage hiring from within. Even where it is encouraged, some managers may be unwilling to lose their best staffers to other divisions. Programs encouraging leaders to support employees gaining new skills and experiences can help, but what may be required is an entirely new mindset starting at the top of the organisation.

One of the most effective ways to promote retention, career ambition, and internal mobility is to champion these values at the highest executive levels and build them into the culture of the organisation as part of a broader, systemic approach to employee management.

Such a shift will require executives to understand the close relationship between talent and overall company performance and to reframe talent development. This insight can lead to career development programs— career storytelling initiatives, stretch assignments, and early matching of young leaders to potential openings—that increase internal mobility and improve overall employee satisfaction.

Given such a cultural shift, leaders may be encouraged to be more proactive about hiring from within, perhaps through company-set targets with explicit objectives for filling positions with current employees. The organi- sation could also rate leaders and managers on their ability to regularly fill hiring pipelines with internal candidates.

This shift may also require executives to help employees set up full career journeys. For too long, talent acquisition has been siloed and excluded from conversations related to career management, promotion, and workplace culture; in fact, recruiters are often unaware that the best candidates for open positions may be already working for the organisation.

An effective transformation of the approach to the internal workforce requires buy-in across the company, particularly as teams begin to replace hierarchies in the organisational structure. Teams can be a testing ground for potential leaders, giving individuals chances to shine and be challenged in real-life situations. Departmental managers, HR, and talent acquisition teams can work together to develop and identify potential candidates for promotion and growth.

Even in cases where advancement isn’t immediately apparent, this cultural shift may stimulate regular career conversations through which internal candidates can identify skill gaps. Combined with support from upper management and true cross-departmental consensus, these conversations can help employees feel valued, which can reduce their inclination to look elsewhere for personal and professional growth.

***

Taken together, these actions can lay the foundation for a better talent cycle. Instead of an absence of professional-growth programs leading to low retention and engagement, companies can create an employment brand defined by opportunities that attract people who value advancement as much as, if not more than, the size of their paycheck. The net result can be an organisation that invests confidently in its people as it tells its own growth story.