Employee turnover continues to run at exceptional levels and the job market is as hot as I have ever known it. We will all be feeling the impact of the current jobs market, probably the most exceptional market I’ve ever experienced. To put it in to perspective, there are c.17m open positions in the US today meaning almost one in 9 jobs are vacant and there are >5m more vacancies than unemployed workers.
Reducing employee turnover should be a strategic focus for the boardroom, not just the HR leadership team. With employee turnover comes significant wage inflation (because external hires will nearly always come at a premium unless companies are doing a good job of hiring for potential over job-readiness). With employee turnover there will nearly always be a lag before a new person is in role, a lag whilst productivity ramps up and a cost to hire a replacement.
So, naturally, we need to do a far better job of developing and retaining our existing talent. And encouraging a greater level of internal mobility is key to that aim.
The paper below in HBR, based on research by Gartner, is enlightening and also somewhat depressing. Of those employees that took a role externally, only a third looked for new opportunities first. Only 40% claimed that it was easy to find internal opportunities and only 17% felt that their organization encouraged them to move internally. With employee turnover causing such operational and commercial damage these statistics are damning for HR teams.
Why is internal hiring so poor? I would argue that it's partly for cultural reasons such as managers hoarding their existing valuable talent. But it's also because HR teams have failed to challenge the status quo.
We need a new approach to internal hiring. We need new technologies that give organizations a holistic view of their talent and skills and technologies that proactively help to match internal talent to new internal opportunities. We need to change our corporate cultures so that managers are encouraged or rewarded to develop and progress their existing talent. And we need to allow talent acquisition teams to proactively approach internal talent for roles in the same way that we would do for external talent.