Hiring, retention, and engagement are top-of-mind challenges for today’s employers – and a focus on internal talent mobility could offer a solution. While Canada may not have seen a “Great Resignation,” it’s clear that Canadian workers are ready for a change. According to a new survey by Robert Half, 42% of Canadian respondents indicated that they are either currently looking for a new job or plan to begin their search in the first half of 2024.

While retention challenges and growing skills gaps have made many employers ramp up their recruitment efforts, a focus on internal talent mobility may offer a different way forward. Internal talent mobility refers to employees’ ability to move within the company, either vertically through promotion to more senior or management positions, or laterally to other departments or roles. An effective internal talent mobility strategy can slow turnover, increase employee engagement, and reduce overall recruitment spend.

Today’s talent values more than compensation

The potential for a higher salary is driving talent to consider moving to a new organization. In a global talent survey conducted by The Adecco Group, 44% of respondents indicated that better pay was their primary motivator. However, it’s clear that compensation isn’t the only motivating factor: 27% of respondents cited wanting to “try something new” as their motivation to leave, while a further 25% indicated that a “lack of career progression with their current employer” prompted them to seek employment elsewhere.

Fair pay must be a priority. However, these numbers indicate that organizations might retain many of these employees by providing a clearer path for career growth, or opportunities to change direction and try something new. According to research, workers are three times more likely to stay with the organization if they can advance their career – and that can include lateral as well as vertical career progression.

Why pursue an internal talent mobility strategy?

Among other benefits, internal talent mobility can provide:

  • A swift way to fill skills gaps. In CEIRC’s 2022 national employer survey, 81% of Canadian executives reported “having difficulty finding people with the right skill set to fill positions” – skills gaps that can negatively affect the organization’s bottom line. Internal candidates are pre-qualified, provide a good cultural fit, and may be quickly brought up to speed in a new role with appropriate training and development.
  • Improved engagement and retention. According to SHRM, employees who are promoted within the first three years have a 70% chance of staying with the organization, while those who move laterally have a 62% chance of staying. While talent mobility doesn’t assist in situations where there is a cultural mis-match, providing new career opportunities to valued employees often results in those individuals feeling energized, invested, and ready to tackle new challenges.
  • Reduced sourcing and recruitment costs. By prioritizing internal candidates, employers may be able to scale back spending on candidate sourcing for particular roles or divisions. Over the longer term, improvements in culture and engagement can reduce turnover, boost employer branding, and support the company’s ability to compete in a tight talent market.

How can your organization prioritize talent mobility?

When creating or further developing an internal talent mobility strategy, employers are recommended to:

  1. Obtain executive buy-in. A great internal talent mobility strategy requires shifts in culture and mindset – and these changes need to start from the top. For good or ill, executive leadership’s mindset and risk tolerance can have considerable impacts on both the structure and long-term success of a talent mobility program. According to CEO and leading HR Consultant Tonushree Mondal, “Unless leaders at the executive level truly believe in the value of internal mobility … the initiative is unlikely to gain traction. [H]aving the right leaders at the very top … is a prerequisite to success.”
  2. Understand your talent. Employee insights are key to creating the foundation for effective talent mobility. Talent teams need a clear line of sight on current employee numbers, needs, and motivators, as well as the main causes of turnover. On an individual level, managers need to talk to their direct reports about career goals more than once per year, and discus opportunities for career progression, upskilling or reskilling, and lateral moves.
  3. Focus on skills. To enable a better understanding of laterally transferrable abilities, consider developing a common skills taxonomy for use throughout the organization. Employees need to see how their current abilities could be applied in another context, while hiring managers should be able to envision how an internal candidate who is not an exact skills match may nonetheless be a great fit for the role.
  4. Incentivize internal hiring. Support internal mobility throughout the attraction, recruitment, and hiring processes. This might include ensuring recruiters are fairly compensated for pursuing internal candidates, publicly recognizing managers that champion mobility instead of “hoarding” talent, and creating a strategy to promote open roles internally.
  5. Consider an Internal Talent Marketplace (ITM). An ITM, which is usually housed on an appropriate technology platform, is designed to connect talent to a wide range of roles, from full-time work through to contract, project-based, and travel opportunities. Organizations interested in developing an ITM are encouraged to research the varied technology platforms offered by suppliers, and follow iterative design best practices when planning and setting up their marketplace.

Value for the employee, value for the organization

The pandemic has left many employees interested in a change – but that doesn’t mean that they need to leave your organization. Today’s talent is seeking opportunities for growth, skills development, and career progression. By creating a robust internal talent mobility strategy, you can match valued employees to new opportunities within the company, and only improve employee engagement and retention, but also ease the costs and challenges associated with a tight talent market.