Finding and Investing in Employee Talent Internally
Author Name: TrainingABC
Posted: 11-09-2022 05:16 AM
Synopsis: Developing internal talent can have positive effects on teamwork, company culture, and leadership while saving significant sums of money on hiring and recruiting.
No matter the industry, job role, or even region, hiring is one of the biggest challenges organizations face today. Attracting, recruiting, and retaining top talent is a priority for leadership teams across the board, but many organizations are going about it with the wrong mindset. Though internal hires are 6x more effective than other hiring sources, only 36% of businesses rely on internal hiring to fill open roles within their organizations. Focusing efforts on the talent that already exists in an organization can pay dividends financially, but it can also positively impact things like company culture, collaboration, and succession planning.
To make the most out of the talent your organization has already secured, you have to prioritize internal hiring whenever possible. There’s so much more to hiring than a simple recruitment process; up-leveling your training and development opportunities, leadership workshops, and pay scales are all great ways to put internal recruitment at the center of your organization. To dive into the benefits of investing in talent internally, and actually figure out what you’ll need to do it successfully, keep reading.
The Power of Internal Talent
Organizations pour massive sums of money into improving recruitment efforts, sourcing new candidates, and hiring externally, but it is often left un-discussed what would happen if those same resources were offered to internal talent pools. While it’s easy to claim that there’s no one “suitable” for a role internally, let’s challenge that. Is your organization training your employees effectively? Are current teams given the chance to see and explore new areas of the company that they might be more interested in or passionate about?
Prioritizing talent internally is rich with benefits. Not only do internal hires keep legacy information and company knowledge with them as they move around, but their cross-functional capabilities will make them more effective at solving business problems and serving customers. With less time needed to get them onboarded in a new role, internal hires and transfers can start adding value much sooner than external hires can.
Research conducted by Matthew Bidwell, a University of Pennsylvania Wharton School professor, found that in investment banking, external hires were offered 18%-20% more pay than internal hires that were promoted to similar roles. Despite the pay gaps, the external hires received worse performance evaluations for 2 years after their hire date than their internal counterparts. This phenomenon isn’t just a problem in investment banking; companies of all kinds are investing more in external hires and not seeing the necessary payoff.
Identifying Up-and-Coming Talent
There’s a common misconception that when an external hire is chosen for a role instead of an internal hire, it’s because the talent internally isn’t good enough for that role. But, it’s just that – a misconception. No matter what role you have opening up, you probably have an internal employee who is up to the challenge and could gracefully step into the role, but they might not be getting the proper resources or support to make it happen. To identify talented individuals who could serve as an internal talent pool, consider the following:
Regular Cross-Training Opportunities
Letting your teams work in silos is a negative for many reasons, but one of the biggest is that this approach limits opportunities to learn new skills and showcase hidden talents. You might have a programmer who is great technically, so that’s all they are used for. However, if you give that programmer a chance to pitch to a client, you could see that their communication skills are being underutilized, opening up the channels for more career advancement possibilities for that individual. Cross-training gives your employees built-in training and development opportunities, but it also allows them to understand new roles and get an idea of things they might be interested in beyond their current scope.
ASK Your Employees
So much is lost when managers and leaders don’t open up communication channels with their teams. If you simply ask an individual what they’re interested in or how they’d like to be challenged, you might gain an entirely new perspective of how their talents can be employed at your organization. Employees should be driving their own careers and feel supported to do so, but if they aren’t ever asked the direction they’d like to try, they’ll never get further than where you assume they should go.
Continuous Feedback Culture
Feedback culture should exist much more broadly than just managers and their employees; peers should give feedback, leaders should give feedback, and entry-level employees should feel comfortable giving professional feedback to someone they report to, too. These conversations can be rich with “lightbulb” moments that have the power to shape someone’s career.
Understanding the Relationship Between Retention and Talent
81% of hiring experts see internal recruiting as an effective tool to enhance employee retention rates. Retention numbers will never be high enough but keeping internal employees moving up through your organization will give those stats a significant boost. When career progression is apparent and people feel challenged and valued regularly, they are much more likely to continue working within an organization. If your employee retention numbers leave something to be desired, the first place of focus should be on internal promotions and career advancement opportunities.
Importance of Training and Development
Once you’ve hired a talented individual, continuing to invest in their development will help them find satisfaction while simultaneously preparing them to take on new roles within your organization. You can train technical skills like using a certain software or tool, or you can focus on soft skills such as leadership abilities, presenting, or even written communication. Training someone internally will be much faster and more affordable than onboarding a new person from a different organization.
Be sure to tailor training and development to each person’s career goals. This is another reason career progression discussions are so vital; they serve as the foundation for making individual training and development plans that benefit both the individual and your organization. Do you need a new project manager who also understands your software? Think about taking a developer that’s interested in being more customer-facing and investing in the training they need to take on project management.
While You Scour Job Boards, You’re Missing What’s Right in Front of You
Hiring professionals are so focused on-campus visits, job fairs, and resume reviews that these same experts fail to see the talent that’s all around them. Internal talent offers an optimized way to achieve the results your organization is aiming for; you just have to be willing to put the same amount of time and money into people you’ve already hired as you do recruiting external candidates.