Over the many decades my company has been studying the link between people practices and performance, we’ve seen a common trait among low-performing, non-agile, slow-to-change companies: talent hoarding. This is the practice of allowing managers to keep their top performers from moving anywhere else in the company.
Of course, it’s human nature to want to hang on to the superstars in your group, department, or division. But ultimately, that’s detrimental to the organization, and to the individuals involved. Multiple studies on talent mobility show that actively moving employees into different roles is one of the most underutilized, yet most effective, development and cultural enhancement techniques in companies today. In fact, research conducted by our colleagues at i4cp revealed that high-performance organizations (as measured by revenue growth, profitability, market share, and customer satisfaction) are twice as likely to emphasize talent mobility versus low-performance companies.
Building a culture of mobility is a trait of very healthy organizations, and the benefits are clear: Cross-functional collaboration increases, departmental cooperation is enhanced, innovation improves, and companies begin working more as one cohesive team instead of separate fiefdoms.
Despite the benefits, too few companies place a priority on moving talent or have a formal talent mobility program in place. As companies emerge from the pandemic, this will be critical to retaining top performers and upskilling the workforce to be more agile in the future.
Talent mobility is not merely moving people from one department to another. Top organizations view the practice as the ability to identify, develop, and deploy talent to meet the needs of the business. During the pandemic, “meeting the needs of the business” took on new meaning, and the companies that embraced talent mobility — such as 3M, which quickly redeployed resources to manufacture and distribute PPE (personal protective equipment) — did just fine in 2020. The ability to deploy needed skill sets rapidly and strategically, to staff at a minute’s notice, to accommodate for the unexpected — these are all traits that define organizations that thrive during times that require great agility.
While talent mobility is often pictured as promotions for high performers, in practice it can cover a lot of movement types. It might mean moving someone laterally to another business group or division. Or a subsidiary. Or another geography. Or even to another company for a while. It might even mean having someone transition down so they can eventually transition up. All of this helps with recruiting and retention. An abundance of new career opportunities is a trait that both attracts and retains top talent in any organization and should be appealing to any manager of people.
But should be appealing is the elephant in the room. The main impediment to talent mobility is almost always the manager. Our research found that half of companies (and 74% of low performers) reported that managers’ failure to encourage movement was their top obstacle to mobility. Managers are so careful to hold on to the stars on their teams that they often play games to keep them. We’ve probably all heard stories about managers who intentionally keep their top performers in the shadows so no one discovers them.
It’s hard to blame them for that. In fact, most companies incentivize them to do that. When managers are having success in metrics the organization recognizes and rewards — typically pure business metrics — they want to keep the talent that made them successful. If you’ve ever managed people, you are likely guilty of this.
Give managers incentives.
The first key to changing this dynamic is to reevaluate how an organization recognizes and rewards its managers. In a select percentage of some of the best companies in the world, it’s understood that to consistently rotate talent — especially high-potential talent — they need to build it into a manager’s performance objectives and make this part of the performance review process. These organizations often loudly provide internal recognition and compensate managers for their ability to both develop people and provide them opportunities for further development. In short, they build a culture where mobility is expected, and an environment that relies on this movement.
When this occurs, a funny thing happens to those former hoarders: they become talent magnets. Everyone wants to go work for the person who has a reputation of advancing employees’ careers.
Reduce bureaucracy and stigma.
Another impediment is the bureaucracy companies often create to fill an open position from the inside. Managers would rather search externally because the hiring process is usually much (much!) easier and avoids conflict. “Poaching” talent internally is often frowned upon in many organizations, and we make hiring managers go through significantly more steps if they want to bring an internal employee into their group or department instead of hiring someone from the outside.
From the employee’s perspective, it’s the same phenomenon. Outside opportunities don’t come with managerial rules of engagement. There is very little stigma attached to looking at roles externally, whereas doing so internally can come at a great political price. “I’m a dead man walking” is a comment I’ve heard from several friends when it was discovered that they applied for another role internally. Employees aren’t locked into a salary band or job level when they search externally, but that often still applies internally. And finally, when looking externally, they can free themselves of any labels that have been applied to their role, rank, compensation, department, etc., which often hinder internal movement.
To combat this, progressive companies are taking a talent ecosystem approach internally and are staffing projects based on matching the best skills to the work at hand, versus proximity or even where someone resides in the hierarchy. They key to this is cataloging the skills and capabilities of the workforce to be more agile and fill positions from the inside. Often, the best person for an open role is already in the organization, but lack of data on the workforce keeps hiring managers from discovering them. An active talent ecosystem makes it acceptable to have employees frequently moving in the organization and reduces the perception of poaching or the stigma of applying for open roles internally.
Think of talent mobility as a lattice, not a ladder.
In the former, employees are encouraged to move across the organization to stretch their capabilities under the management of key decision-makers. Our research shows that supporting lateral mobility and encouraging relocation assignments have a strong correlation to market performance. So does transparency about the process. High-performance organizations are four and a half times more likely to make the criterion for talent mobility clear to the workforce.
Celebrating lateral movement also addresses one of the risks associated with mobility — hitting a glass ceiling. When companies only view mobility in terms of upward movement, it’s important to have positions available. If organizations lack positions to move people into or have limited opportunities for upward mobility, they often leave employees feeling stuck. We found that 39% of employers cited lack of positions to move into as an obstacle to mobility.
Crisscrossing the organization as a lattice can also create a more inclusive culture and improve diversity. Cliques and insider versus outsider feelings are minimized when movement is plentiful. It also helps retain diverse talent who might otherwise get discouraged about slow-to-open senior roles if mobility is only viewed as upward.
Get comfortable with change.
One last reason talent mobility often doesn’t take hold: it requires frequent change. While most companies discovered the importance of agility during the pandemic, top companies have always recognized its importance. If employees describe change as overwhelming, wearing them down, or destabilizing to what they do normally, it’s likely they are working within a low-performance organization. Employees at top-performing companies are not only more likely to say change is normal and in fact part of the business model, but they usually describe it as an opportunity. Several of these organizations even induce change on a regular basis under the theory that consistent change actually boosts productivity.
An active culture of talent mobility can help minimize complacency and create an environment of healthy change — and with it an agile environment that can handle the unexpected. If you are interested in improving agility, it’s time to include some healthy internal mobility and create more talent magnets throughout your organization.