Internal Mobility: The benefits of hiring from within your company

Posted August 16th, 2023

When companies provide their employees with the chance to develop new skills and explore different roles, it leads to increased job satisfaction and higher retention rates. However, even when they understand this, some employers can find it difficult to retain their top talent. Why is that the case?

Nowadays, the focus is primarily on enhancing the candidate experience for external hiring within the recruitment process. This sometimes causes employers to overlook internal candidates, and can often place the sole responsibility on individuals to identify their own career opportunities.

In the face of uncertain economic conditions and the ongoing ‘war for talent’, employers are beginning to realise that prioritising their employee's overall career journey can be a highly effective strategy to optimise hiring costs and enhance productivity within the workforce. And as a result, organisations are placing a renewed significance on internal mobility.

What is internal mobility?

According to Workhuman, “Internal mobility refers to the ability of employees to move – either vertically or laterally ⁠– within an organisation”. The traditional career trajectory, characterised by upward advancement, is commonly known as the ‘ladder’ career path (for example, a promotion), while horizontal growth is the ‘lattice’ career path (like taking on new responsibilities or learning new skills in different departments).

Now that we've defined internal mobility, let’s delve deeper and explore three ways you can benefit from internal talent sourcing.

#1 Hiring from within is faster and cost effective

On average, external hiring tends to be more costly, with expenses reaching up to 20% higher compared to internal hiring. This increased expenditure can be attributed to various factors, including job advertisements, recruitment fees and procedures such as relocation costs and background checks.

Obtaining external candidates can also lengthen the hiring process, with it typically taking a minimum of three to six weeks to fill an open position. In addition, there is the concern that new employees may not stay, given that 41% would consider moving after less than 12 months.

Internal hiring not only offers the advantage of saving money and time when it comes to onboarding, orientation, and training. Organisations can also benefit from the candidates' pre-existing understanding of the company culture and its operations, which further streamlines the training process.

#2 Internal hires outperform external hires

Benson and Rissing's research suggests one of the reasons internal hires perform better is that they often bring with them valuable past experiences and unique skills gained within their employer's organisation. Consequently, they tend to be more productive from their first day in the new position compared to external hires, who would be less familiar with the role. In addition to this, they found that companies with positive retention rates often maintain a larger pool of top-performing individuals who display more loyalty to the organisation over top-performing external hires.

LinkedIn’s data reveals a similar narrative. They found that employees who transition to new roles within their organisation are 3.5 times more likely to be engaged compared to those who remain in their current positions – illustrating that there are worthwhile benefits to prioritising internal mobility.

#3 There are more opportunities for learning and development

In order to truly benefit from your internal talent pool, employers must recognise the significance of employee wellbeing as a crucial factor in reducing employee turnover.

A recent report by Korn Ferry indicates a shift in people's perspectives on career advancement. Following the impact of the ‘Great Resignation’, employees are becoming less inclined to remain in positions where they feel their contributions are undervalued or they have limited opportunities for career growth.

Research firm Workplace Intelligence conducted a study in partnership with Amazon, and found that a majority of employees express concerns about lacking the skills (78%) and education (71%) necessary for career advancement, with the pandemic being identified as a contributing factor. In fact, 58% of employees worry that their skills have become outdated since the onset of the pandemic, while a significant 70% feel unprepared for the future of work.

Meanwhile, 89% of employees are actively seeking ways to enhance their skills. This aligns with the findings from LinkedIn's Global Talent Trends report, which revealed that upskilling ranks among the top priorities for candidates in their respective roles.

Companies dedicated to employee education and development are likely to see an increase in engagement and commitment in their current workforces. This not only assures internal employees that they are valued in their organisation, but also cultivates a positive company culture.

How can you leverage existing talent?

Incorporating internal mobility into your talent strategy can be pivotal. By leveraging your existing talent within the organisation, you can save time, enhance performance, and foster higher levels of employee engagement. However, the key lies in the ability to identify and develop these talents. To gain further insights into the advantages of skills-based hiring and efficiently searching your existing talent pool, read our article.

Tags: DaXtra Blog, Candidate Experience