Why the lack of job mobility is a problem, and how we can fix it

In recent years, there’s been a lack of job mobility — in other words, fewer people are advancing within their companies. Instead, they’re moving on to another employer. Why is this, why is it a problem, and what can we do about it?

What’s causing the lack of job mobility?

The lack of job mobility is caused by several things. Some companies simply don’t offer clear paths for advancement, and that results in employees looking elsewhere for more senior roles.

At the same time, Millennials are significantly more mobile than Gen X and Baby Boomers. Many prefer to move on to different organizations after a few years because they want diverse experiences.

Last, but certainly not least, hiring managers usually look for skills — not for potential. That means existing employees are frequently overlooked, even if they have the ability to learn the required skills within a short period of time.

Why is the lack of job mobility a problem?

The lack of job mobility is a problem because research shows that internal hires perform significantly better in their jobs during the first two years than external hires. Yet external hires are paid around 18 percent more than internally promoted employees. That means companies are paying almost 20 percent more for talent who aren’t performing as well as internal candidates.

At the same time, not getting the opportunity to advance internally can be frustrating for employees. It prevents them from growing their skills and can cause them to jump ship.  And replacing employees costs on average a fifth of their annual salary — and then there are the costs of delayed projects and lost productivity.

What can we do about the lack of job mobility?

As a manager, you can promote job mobility by offering advancement opportunities within the company. Research what types of promotions you can offer, what the salary increases are, and how employees can qualify for those promotions.

Talk to your team members about their professional objectives so you can see if their goals are aligned with the company’s objectives. If they are, explain to your employees what they need to do to advance and start creating opportunities for them to grow.

Keeping talent in the company

It’s clearly important to keep your people in the company if you want high-performing talent who know the company inside and out. By offering well thought out career paths and interesting salary increases for promotions, you stand a good chance of retaining your talent and keeping all of that knowledge in-house.

If you like this article and want related content on managing, recruiting, and hiring employees, visit our business resource center. 

Sources

https://beamery.com/blog/internal-mobility

https://journals.sagepub.com/doi/10.1177/0001839211433562