A Look into Internal Mobility: What it Means for Small Businesses

May 21, 2024
HR and Recruiting Industry Information

Small businesses looking to save money on hiring often find that internal mobility is a great solution. Tapping existing employees for other positions means you can bypass the initial steps of the application and hiring process and move straight to identifying best candidates for open roles within the business. Most likely it’s worth considering how to best apply this concept for your company’s success. Here are some ideas to help.  

What Is Internal Mobility?

Internal mobility is the practice of using your company’s existing workers to fill positions. It can look like: 

  • Lateral position moves, inside or outside the current department
  • New position in another department
  • Transfers to other branches or offices
  • Promotions
  • Demotions
  • Change of status, e.g. salaried to contractor
  • Filling newly-created positions
  • Mentorships
  • Project assignment cross-mobility

Benefits of Internal Mobility for Small Business

According to leadership strategist Curt Steinhorst, “Hiring internally to fill a role is often a more strategic move, whether it’s temporary or permanent. Studies show that internal hires are more loyal, have improved retention, and that 75% are successful in their new job role.” Let’s examine why that might be. 

  1. Internal hiring costs the company less than external hires.External hires cost 18 percent more than internal hires,” continues Steinhorst, “and are 21 percent more likely to leave during the first year.” The time spent recruiting, sorting through resumes, setting up interviews, extending offers, and onboarding is virtually eliminated for an internal hire. 
  2. Integrating into company culture takes time. Wharton professor Peter Cappelli reports that “outside hires take three years to perform as well as internal hires in the same job.” Even for hires who have the skills needed for the position will experience the initial shock and gradual integration into the company culture. An existing employee who fits in perfectly can embrace their new position without a learning curve from multiple angles.
  3. Internal recruitment boosts retention. Employees need to feel valued and believe that they have the ability to advance their skills and career aspirations within the company. Otherwise, they will be forced to look elsewhere for promotions. Not every role in the company will have a path to promotion, but management’s eye on potential candidates can demonstrate your company is loyal to its workers.
  4. People are your most valuable asset. In an age of rapid technological advancement where AI and automation has replaced large swathes of the workforce, rewarding workers’ personal ambition and good work can instill faith in company leadership.
  5. You know your talent already. In a vacuum, your best option between two resumes might be a toss-up. When you consider that you know the work habits, managerial confidence, talents, skills, and personality of someone already in the company, you significantly decrease your chances for an unhappy surprise. Even the most rigorous recruiting practices can’t offer any guarantees.
  6. Internal mobility promotes adaptability. Employees who are familiar with multiple departments and projects are often flexible and better at collaboration. It can provide employees with a much broader perspective about the company’s mission and goals.

Internal Mobility Data Shows Untapped Potential

Managers (49.8 percent) and directors (50.3 percent) are the most likely employees to make internal moves according to internal data from LinkedIn. In contrast, individual contributors only represent 24.1 percent of internal promotions. What can your business take away from that data? People in management positions have cracked the code on how to achieve mobility. How can your company reach a somewhat neglected group of employees with great potential.

Effective Strategies for Internal Hires

Taking a long hard look at the pool of potential mobility hires can yield some interesting data. What you do next can help change the company culture around internal mobility. Consider some of the following strategies:

  1. Track expenses. Explore the ways losing employees affects the company’s bottom line. While it’s true that a departed employee no longer collects the salary and benefits, the cost of an external hire can quickly cover and exceed that number. Look critically at those numbers and determine where your company can save on recruiting costs.
  2. Acquire data. Track the number of employees hired from within. A tool like ApplicantStack can generate reports that show where you’re getting the most quality hires. If the data shows internal promotion is king, use that data to make some changes in the hiring and development process.
  3. Advertise internally. Consider posting all new jobs internally with wide reach and detailed descriptions.. 
  4. Improve culture. Include questions about internal mobility in performance review meetings. Create a culture where discussion about movement within the company isn’t taboo or discouraged.
  5. Involve hiring managers. Encourage an open-door policy with HR or leadership that allows employees to express their ambitions openly and carve out a path for advancement.
  6. Encourage self-improvement. Invest in internal development such as mentorship, coaching sessions, reimbursement for outside education, or creating cross-training opportunities.
  7. Help workers buy in. Tie long-term company goals to individual employees’ goals in an encouraging and uplifting manner.
  8. Create a “career storytelling” program. This initiative can publically celebrate internal promotion. “Giving workers the necessary opportunities to learn and stretch assignments is one critical step,” according to experts at Deloitte; “giving them a narrative they can model their own careers on is another (and especially important, because it helps raise the sights of those who might not otherwise believe they can move forward in an organization).”
  9. Set up a rewards program. Offer financial incentives for pursuing internal mobility or for providing referrals of quality candidates within the company.

According to Jobvite, 36 percent of recruiters say internal mobility produces their highest-quality workers. For small businesses especially, a strong company culture comes from a workforce united in purpose. The more you find the hidden talent within the walls of your own organization, the more your company can focus on growth and prosperity.

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