The benefits of hiring internally

More businesses are looking inside, not out, for talent as hiring slows. Post-Covid, many Australians switched employers during the ‘jobs boom’, when unemployment dropped to its lowest rate since 1974 (3.4% in May 2022). Since then, unemployment has risen (4% in May 2024) and job ads have declined, particularly in the major cities. 

This slowdown of external hiring has led both employers and employees to focus on internal mobility. With less scope to bring in new people, employers may be wondering how they can nurture and grow existing talent within their organisation. 

Meanwhile, many candidates are uncertain about moving to a new workplace while facing pressures from the higher cost of living; SEEK data shows 39% of candidates are staying in their current role because they’re confident it’s stable and 27% aren’t sure what the economic landscape would mean for a new role.

Suzie Custerson, APAC Director, Strategic Workforce Planning & Talent Acquisition, SEEK unpacks how organisations can better enable internal mobility alongside external hiring.

To start, what is internal mobility? Movement in and around an organisation, says Custerson. “It’s quite multifaceted. It could mean movement within the same team, business unit, market, or even across markets, depending on the footprint of the organisation.”

This doesn’t always mean career advancement, though. Internal mobility also includes lateral moves and opportunities to learn outside an employee’s day-to-day role, such as secondments, rotations or temporary job assignments. 

Internal mobility benefits both sides. For individuals, it offers career growth and experience, and in some cases a pay rise, says Custerson. “It also gives people renewed vigour and energy, because they’re feeling challenged in a good way.” Plus, it means employees grow in an organisation they already know is a cultural fit; SEEK data shows 18% of Australians are concerned the culture in a new workplace would be worse than the one at their current job.

For an employer, internal mobility helps the cross-pollination of information and diversity of thought among teams, along with cost and productivity benefits. “Moving people around an organisation is much more economical, improves retention and has a faster time to productivity, so you’re reducing the need to outlay cost in the future,” says Custerson. 

Sometimes, however, employers might prioritise external hiring, depending on their growth cycle. They may want to grow headcount to bring new people, skills and capabilities into the business, she says. This doesn’t mean that looking inward isn’t important – it’s just not always a top priority.

This is because there needs to be movement in an organisation. “It’s difficult to create internal mobility if everybody stays in the same place,” says Custerson. “There needs to be some level of attrition to generate opportunities to hire or move people around.”

So, what usually holds internal mobility back? There are a number of factors that can get in the way. In some cases, an employer simply might not have the right systems in place to capture the movement already happening.

Some common challenges around internal mobility include:

Culture. Every organisation has slightly different DNA. To enable internal mobility, it’s essential to build a culture that's focused on retaining and developing people as a path to growth. 

Strategy and objectives. You could have internal mobility as a goal but no concrete path to get there. In some organisations, different functions (such as retail and corporate) or markets might have their own approach, yet nothing cohesive business-wide.

Policies. Without policies that favour internal mobility, it can be difficult for people to be approved for internal moves like secondments, temporary projects or even relocating to another team or location. On the flip side, the right policies help push organisations to seek and prioritise internal candidates for roles.

Systems and tools. Too often, employees don’t even know internal opportunities are available. Systems and tools should make it easy for people to access mobility in an organisation. Employers should also share information on opportunities and career paths available.

Internal mobility should be considered alongside talent and people management more broadly. It starts with examining what capabilities the business wants to develop internally, says Custerson. 

“This is where all your HR processes come together – your talent reviews, succession planning, understanding the strategic drivers for the organisation and the critical skills to maintain – so you make the right decisions around how to hire,” she says. 

“People get frustrated when you just automatically go to the external market and completely overlook existing talent pools,” says Custerson.

While internal mobility is different for each organisation, there are a few key areas that help, says Custerson:

1. 1.

   Leadership. Change needs buy-in from the top. People look to the executive leadership team to support and nurture talent. This means that internal mobility should be reflected in decisions made by the leadership team.

2. 2.

   Technology. At the end of the day, technology is only helpful if people use it. This means that, as well as investing in tools like internal talent marketplaces and skills clouds, you need to show people how to use, monitor and maintain the tool. In some scenarios, more technology isn’t always the best approach – something as simple as putting up a poster in a breakroom might work well to advertise internal roles too. It’s about finding what balance of technology works for each organisation and its teams.

3. 3.

   Collaboration. Networking naturally happens when people come together, which opens up those important opportunities for internal movement. Structured events, like careers days and mentoring programs connect different teams that don’t always get to speak and learn from each other.

Sources:

1. ABS Labour Force.

2. Independent research conducted by Nature on behalf of SEEK. Interviewing 4,800 Australians annually.