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Employers waste millions of dollars each year recruiting when the best people for the jobs are often right under their nose.

Deloitte tells us it costs a single large company upwards of $400 million in recruiting costs, training and lost productivity to replace workers. An internal mobility program would save $31 million by shaving just one point off the organization’s 13% turnover.

The cost of turnover due to a lack of career development and internal mobility to just an average-sized company is $49 million, says Gartner, the global research and consulting firm. 

Retention and the savings it offers is a powerful incentive for companies to have a strong internal mobility program. In 2015, as recruiting talent was getting ever more difficult, Korn Ferry’s Futurestep found 87% of 1,189 corporate executives that a strong internal mobility program would “definitely help with attraction and retention efforts.”

Remarkably, fewer than a third admitted their company had an internal mobility program. Fewer still use some kind of internal mobility software.

If saving on recruiting new workers was the only benefit, that would be reason enough for every company – big or small – to have an internal mobility program. The benefits of a program are far greater than that. Dozens of research studies and surveys, and the experience of companies with robust internal mobility programs like Cisco, Ingersoll Rand and Vanguard, prove beyond a doubt that career development improves engagement, increases productivity, reduces turnover and enhances the employer brand.

One of the seminal studies of internal mobility vs. external hiring found internal hires outperform external hires and stay longer. Ironically, those hired from within are paid 18% less than those hired externally.

Cisco and the HR advisory and research firm Future Workplace found internal mobility programs improved:

• Employee engagement  by 49%
• Productivity by 39%
• Employee teamwork 39%

LinkedIn reported in in its Global Talents Trends 2020 that on average, employees stay 41% longer at companies that regularly hire from within. The Society of Human Resource Management says the retention benefits extend to workers who made a lateral move as well as those promoted up the ladder.

With these kinds of benefits why don’t all companies have an internal mobility program?

Deloitte says, “Creating a strong culture of internal mobility isn’t just about posting positions on an internal job site. It involves all leaders encouraging and supporting employees to develop the skills that prepare them for their next role, and creating a matching career plan. All too often, such efforts are largely absent.”

The culture at more than a few companies discourages managers from hiring internally, seeing it as poaching rather than career development. Managers, too, resist losing their best workers.

“While it’s hard to believe,” says Deloitte, “There are organizations where recruiters are told they cannot reach out to the employees within the company about a different role.”

Even where an internal mobility program does exist, it’s often managed by HR functional areas such as learning and development, succession or career management. When talent acquisition is not included, recruiters may not think to look inside to fill a job.

Josh Bersin, a globally recognized leader and analyst in talent management, says the worker shortages of the last several years and the pandemic that forced companies to do business differently and redeploy people into new or different jobs made internal mobility more critical than ever.

“It’s time for companies to provide employees with agile, personalized mobility that helps them move their careers into the right direction while meeting organizational needs with talent from within their own walls.”

Contribution by John Zappe