While many employers today are laser-focused on hiring, bringing employees in the door is just one piece of the talent dilemma—getting them to stay is the other.
Retention is a top concern for today’s HR leaders, who are being faced with an unprecedented turnover risk. According to a recent survey from PwC, 65% of employees surveyed are on the hunt for a new job, nearly double the rate from just a few months ago. With more than 10 million open jobs and an economy on the brink of bouncing back from the pandemic, the likelihood of employees seeking greener pastures is growing by the day. So, how can employers hang onto their talent? One solution may lie in internal promotions.
The value of internal talent
In a multiyear study of LinkedIn users, the organization found that average retention over five years was just 45%. However, for employees who saw a promotion within their first three years with the company, that number stood at 70%—and 62% for employees who made lateral moves during that time.
As this study suggests, when employees see a real path for themselves within an organization, they are more likely to stick around. And lower turnover ultimately means significantly less money spent on recruiting, hiring and onboarding new employees—some studies have put the cost of filling a vacant role at up to twice that of the salary of the departed employee. Promotion from within also means employers are retaining workers with institutional knowledge, which can go a long way toward productivity and efficiency, while also embedding a culture that values its employees’ best interests—itself a significant recruiting and retention tool.
Looking inward first
So, how can employers shift their hiring focus to promote internal mobility? Here are a few strategies:
- Mentorships: Start preparing employees early for upward moves by matching them with mentors as soon as they join the organization. Formal mentorship programs not only provide employees with the skills they will one day need to take on more responsibility, they also communicate to employees that the company values their development.
- Strategic succession planning: In a recent study by Deloitte, more than 85% of HR professionals surveyed recognized how crucial effective leadership planning can be—but only 14% acknowledged that their company does succession planning well. Being more strategic about succession planning can make the difference for developing qualified and prepared leaders of tomorrow.
- Continuous performance management: Employers looking to promote internal mobility should consider whether their current approaches to performance management are enabling employees to truly develop to their potential. Instead of only checking in with employees in an annual performance review, for example, continuous performance management can help employees understand their strengths and weaknesses and course correct quickly to stay on an upward trajectory.
- Give managers more authority: The greatest connection between top leadership and employees is managers—so they should be empowered to recognize and develop the talent who report to them. Managers need to have the tools to coach high-potential employees and enable them to move into higher roles.