As Hiring Slows, Companies Look Inward to Fulfill Talent Needs

The uncertainty many employers face today is unsettling, especially as the global economy exhibits fits and starts that indicate no clear way forward. On one hand, the labor market continues to defy gravity, especially in the United States. At the same time, layoffs are accelerating in sectors such as technology and financial services, adding to the confusion many corporate leaders are experiencing.

Today’s climate of ambiguity is uniquely challenging to talent acquisition teams. A vast number of companies have either slowed or stopped hiring as a precaution, even if their need for skills and competencies have not declined. Resourcing must still go on, but creativity is needed as companies look inward and to flexible talent to avoid adding headcount. While both options are viable, internal mobility may be the more attractive long-term option for several reasons explained in this column.

Driving Better Retention, Mobility

Employers have long focused on helping their workforce develop and advance, but during the past several years, a sharper focus on creating a more nurturing workplace culture has emerged. HR leaders understand that by providing a more positive experience for their people—through training and development, wellness, and job satisfaction—productivity and retention are sure to improve. And these have a direct and sustainable impact on innovation, customer engagement, and long-term business performance.

Retention, in particular, has been a priority for many talent-centric companies. The Great Resignation underscored the weakness of talent strategies at many organizations when they lost significant portions of their workforce to competing employers. Failing to retain some of their best people led to overhiring and even hoarding talent starting in 2021.¹ The fallout from this phenomenon has been concerning as the tech sector—including some medical device manufacturers—has now shed hundreds of thousands of jobs to achieve an economic equilibrium.

Some companies now must make do with their existing workforce. But a strong labor market continues to amplify concerns about losing skilled workers. Randstad’s 2023 Workmonitor survey of 35,000 workers around the world showed just one-third (33%) were not looking for a new job.² Nearly one-quarter (22%), however, were actively seeking new opportunities, while 45% were open to career opportunities.² With such a large majority of people willing to make a change, it’s not surprising employers are focused on retention and internal mobility to keep their best people.

In fact, Randstad Enterprise’s 2023 Talent Trends research shows, across all sectors, about two-thirds (65%) of human capital and C-suite leaders say retention has positively transformed or impacted their company. Among life sciences companies, this figure is even higher at 71%.³

At the same time, just 12% of life sciences employers say an ineffective internal mobility strategy has had a negative impact or been one of their greatest pain points,³ indicating a low-risk, high-reward solution to talent scarcity.

Clearly, companies recognize effective redeployment of their people can lead to a number of benefits. Most importantly, internal candidates are engaged, eager, and enthusiastic about taking on a new role. Their onboarding takes less time, which means time to productivity is usually shorter. This also reduces turnover risk for new talent, since a poor onboarding can lead to quit rates as high as 50%.⁴

Furthermore, internal hires from day one have critical organizational knowledge to help facilitate their work. The cost of hire is usually lower than for an external candidate. Companies can better rebalance their workforce from a business with too many resources to one with too few, which helps to avoid layoffs. Additionally, internal hires are a resource to help with onboarding their replacements. Also, since they are remaining with the company, critical organizational information isn’t shared with competitors.

Create Clarity on Internal Mobility

Redeploying talent internally, however, is not without challenges. Friction can arise between hiring managers over in-demand candidates, and recruiters and hiring managers must be careful not to allow biases to affect their decision-making when other employees are vying for the same role. Also, passed-over internal candidates may feel resentment if they don’t understand how the position was awarded. Furthermore, technology that facilitates the process may not be well-developed.

According to Janet Mertens, senior vice president of research for the Josh Bersin Company, a leading HR analyst firm, “Internal mobility is hard, it’s really hard, because of the technology, because of the process, but it’s also hard because of the culture piece.”⁵

That is why it’s important to establish an accessible, transparent, and fair process for internal hiring that is distinct from external recruitment. This includes open and timely communication with applicants to help manage expectations and fostering a corporate culture that reinforces the win-win nature of internal mobility programs.

Furthermore, the candidate journey for internal applicants should be designed differently from that of external candidates. A separate career portal should be created, even if internal applications are all processed alongside external ones. Internal marketplaces can facilitate employees’ search for a new role or for projects. By tapping into existing employee profiles, companies can also notify them of new career opportunities that fit their skills and interests. Key to effective internal mobility is alerting talent to work that is appealing to them.

Placing internal talent into new roles is just part of a good retain-and-promote strategy. Organizations should also provide a targeted learning and development program paired with work-life coaching support and an effective rewards program. These incentivize talent to grow and develop not only professionally but also personally since they help individuals acquire more skills and clarity around their goals.

Conclusion

Companies are increasingly connecting the dots between embracing a career-long approach to talent management and organizational performance. By nurturing people’s desire to learn, to take on new challenges and responsibilities, and to succeed, employers build loyalty and satisfaction. Focusing on retention and internal mobility is just part of a potent human capital strategy, but during this period of uncertainty, it’s increasingly salient to achieving a more agile and cost-effective workforce. 

References

1. bit.ly/mpo230521
2. bit.ly/mpo230522
3. bit.ly/mpo230523
4. bit.ly/mpo230524
5. bit.ly/mpo230525

---

Tania de Decker is the managing director of global strategic accounts for Randstad Enterprise Group. She works with Fortune 500 companies to develop and implement processes that improve and drive recruitment and retention solutions. de Decker has more than 28 years of recruitment experience and has worked over 18 years with life sciences companies. The emphasis has always been improving the quality of her clients’ talent acquisition.