26 September 2023

A call to action: Provide employees with room to grow

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Research shows that turnover is significantly less likely when employees have internal mobility. Emily Field, Bryan Hancock, Stephanie Smallets and Jason Williamson discuss three levers can enhance internal retention.

The battle for talent will continue in 2022. We previously shared that hiring for skills and recruiting from unlikely sources are two ways to bring in the right people while the talent pool remains competitive.

However, the work does not stop there.

These new employees may leave without the opportunity to grow.

Our Great Attrition research shows that a primary driver of quitting is that employees do not have opportunities to learn new things or find their work interesting or challenging.

Similarly, research shows that turnover is significantly less likely when employees have internal mobility.

Thus, a call to action for organisations: Make it easier for employees to find new internal opportunities than external ones to fend off attrition.

This requires a critical mindset shift.

In some instances, organisations count employees’ internal movement across roles in their attrition metrics.

Instead, organisations should track internal retention (i.e., movement from one role in the organisation to another) as a success metric.

We suggest three levers to enhance internal retention:

Clear career paths and development plans.

Each role within the organisation should have clear paths toward future roles, defined by the skills required to be qualified.

Employees should be able to identify their next opportunities early in their tenure and cocreate development plans with their leaders.

A transparent internal job marketplace.

Democratize internal mobility and empower your people to find their next role through an easy-to-use internal job marketplace that provides recommended future roles and learning journeys based on current skills.

Skills-based learning journeys.

With paths forward in mind, employees need opportunities to fill their skills gaps to make their next internal move.

This is not limited only to workshops and virtual offerings; on-the-job apprenticeship and temporary assignments serve as powerful ways to help employees grow.

Bearing these levers in mind, organisations should take the following next steps:

Systematically capture skills.

As technology progresses, organisations across industries are launching efforts to formally log their employees’ skills to help guide talent management.

Examples include surveys asking individuals to self-report their skills with 360 validation from managers, peers, and direct reports, and artificial intelligence used to infer skills based on resumes and previous internal projects.

One large technology company leverages skills tracking to help managers more easily see who on their team is ready for internal transfers or promotions through a strong fact base.

Build learning and development (L&D) around transferrable skills.

Strong L&D programs are defined by a future orientation toward building the skills needed to support employee and organisational success for years to come.

For example, a large North American bank built an L&D program focused on skills that support its cultural aspirations and leadership—rather than trendy skills that could quickly become obsolete—effectively setting up every employee to have a future as a bank leader.

Start where there is an immediate need.

It is essential to take a test-and-learn approach through smart pilot efforts.

A multi-national insurance company started where the need was greatest; they focused their skills-based redeployment effort on one declining role to transition employees to those that were increasing in demand.

Invest in a tech solution to enable your internal job marketplace.

An organisation’s internal job site should be at least as good as its external site.

A global pharmaceutical company built an internal job market that managers could use to search for employee-uploaded job profiles defined by skills and that allowed internal candidates to receive transparent, step-by-step updates on the application process.

A tech-enabled internal job market has the added benefit of enhancing equity in talent decisions by democratizing internal movement, making it is possible for all employees, not just some, to find the future they want within their organisation.

Incentivize leaders to keep talent internal.

Retention is not solely HR’s responsibility.

Rather, it is an objective shared by everyone in the organisation.

Add metrics on internal retention to leadership scorecards, and reward and recognise leaders who do this exceptionally well.

Rightfully, standards for a great work environment and career are rising, which is having a profound impact on the battle for talent.

Organisations must rise to the occasion to effectively retain their people by providing all employees the opportunity to achieve professional and personal growth.

*Emily Field shapes organisational strategies to establish talent management as a distinctive advantage. Bryan Hancock supports private, public, and social sector clients through expertise in talent management, organisational design, and workforce development. Stephanie Smallets helps organisations develop and implement culture and talent initiatives. Jason Williamson is a contributor at McKinsey.

This article first appeared at mckinsey.com.

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