Talent Management Processes

Clarifying the Purpose of an Internal Mobility Program

by Taleo Research

The implementation of an internal mobility program is available to all companies, and is an important component of many organizations’ overall staffing strategy. As reported in the study, Internal Mobility by Taleo Research, 92 percent of companies turn to the existing employee base to fill an open job position.¹ The majority of survey respondents (more than 70 large and global corporations) report internally filling 40 percent or more of open positions annually.

Internal mobility can be a significant staffing source, yet little data has been available about current and effective internal mobility practices in large corporations. In particular, what goals are corporations seeking to fulfill by investing in an internal mobility program? Here is a brief discussion of three internal mobility program goals and a selection of the compelling data abstracted from the full coverage in the Taleo Research Internal Mobility report.

A prime motivation for corporations is to maintain employee satisfaction by providing growth opportunities. Dissatisfaction with potential career development is a top reason for seeking a job outside a company, according to more than one-third of employees responding to an August, 2003 survey by the Society for Human Resource Management (SHRM) and CareerJournal.com. An internal mobility program provides visibility for employees to know where the opportunities are within the company, thus alleviating a potential source of dissatisfaction. Respondents in the Taleo Research survey consider internal mobility to be most effective at improving employee satisfaction, giving it a score of 4.03 out of 5 in effectiveness at attaining that goal.

Improving employee retention is a second, linked motivation for an internal mobility program, cited by 76 percent of survey respondents. Turnover hurts the bottom line, both directly in separation costs and replacement costs; and indirectly—yet even more extensively—in lost productivity. The goal of improving employee retention is most common with companies experiencing high turnover rates. Taleo Research finds that 81 percent of companies with turnover rates greater than 10 percent cite improving retention rates as a key priority, well ahead of that group’s second most commonly cited goal, “lowering staffing costs” (63%). For companies with strong retention rates (less than 10 percent turnover per year) the goal of improving retention rates is still the most frequently selected, but at a slightly lower frequency (67%) than the overall frequency.

Lowering staffing costs and filling positions faster are reported as goals for about half of internal mobility programs. Being able to fill positions without incurring the costs of a conventional external search was acknowledged as a motivating factor by 56 percent of survey respondents. 53 percent of survey respondents cited the ability to fill positions faster, made possible by a program that can be more responsive than an external search.

Protecting intellectual property, maintaining competitiveness, and innovating faster are further goals identified by the Taleo Research study. These outcomes are strategic benefits of filling positions internally through internal mobility programs.

It is important to identify and prioritize your company’s specific goals in launching an internal mobility program. Employee turnover has a dramatic, negative impact on the corporate bottom line. Calculate the potential financial impact of your program and investment. Fundamentally, companies are motivated to invest in an internal mobility initiative as a way of reducing the adverse economic impact of employee turnover.

Clearly articulate the purpose of your internal mobility program prior to its design and implementation, especially considering the value that can be derived from increased employee satisfaction and higher retention rates. Much of the overall structure, policies and processes of a successful staffing initiative flows from its purpose or goal.

¹Internal Mobility, Taleo Research 2003. Available at www.taleo.com