How Well Are You Monitoring Your Talent Movement?
by Lois MelbournePart 1
Talent movement can tell you more than you think about your organization, yet many businesses don’t plumb its full depth. Talent movement statistics have more to offer than just the basics of whether your employees are leaving on their terms or yours. With some deeper analysis, you can actually improve business performance. I recently sat down with Dr. Kevin Carlson, Associate Professor of Management at Virginia Tech, to discuss the topic of monitoring talent movement and why it’s a key factor in effective workforce planning and management. He shared his insight into how businesses can analyze employee movement to maximize business performance in specific areas of their organization.
Q: How do you see most businesses managing their talent needs – are they bringing fresh talent in from outside or are they working to challenge and train their current employees to fill positions?
A: Firms tend to prefer to hire from within if they can. They see a lot of benefit in internal hiring, from decreased training times to maintaining company culture and standard practices. It’s essentially adding additional skills to these folks and promoting them up within the organization. BUT, while we may reduce risk by hiring from within, we need to balance that with finding the best person for the position, whether that’s internally or externally. We have a tendency in many cases to say, “I have an internal candidate that’s good enough,” so we never look outside. And in some cases, we miss opportunities to find an external candidate who’s substantially better than the best internal candidate. I think in many cases we’ll still hire internally. But I believe there’s a very real benefit to expanding the search and not limiting ourselves either internally or externally.
Q: So what would you say are key metrics we should monitor to assess the pros and cons of filling a vacancy internally versus externally?
A: We need to monitor turnover rates, which also leads to us looking at how people come into organizations and positions and the associated costs. An employee departure causes a certain amount of turbulence, from the length of time a position is vacant to the learning period where a new person is learning the position, establishing relationships and becoming effective within the organization. An outside hire causes a certain amount of turbulence.
But, in most cases, a high-level employee’s departure or promotion within the organization causes a vacancy that is filled internally. That triggers a whole series of internal promotions and transfers as multiple employees move up or transfer to fill each newly vacated position initiated from that first internal promotion. I think we don’t do a good job of recognizing the associated turbulence that goes with internal transfers.
Keep in mind that we typically have far more internal transfers than departures. If you ignore all the associated turbulence, hiring from within seems preferable. But if one internal move creates five or six other sets of moves, you’ve got a different cost equation associated with an internal promotion rather than an external hire. That doesn’t mean that we should prefer one to the other, but we need to think about the entire cost structure, including that turbulence caused by internal transfers.
Well, that is but a drop in the bucket of Dr. Carlson’s insight. Look for more of my talk with him coming soon. How many of you are filling your positions internally vs. externally? What benefits have you seen of one over the other? Something to think about.
Cheers,
Lois
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