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Speeding Up Rotations and Internal Movement for Development, Retention, and Profit (Part I)

by May 12, 2009, 7:00 am ET

There is little argument that job rotations, stretch assignments, and other forms of internal movement are some of the most effective development and retention tools available. While world-class organizations aggressively manage deployment for development purposes regardless of the economic state, such programs become universally popular when economies turn sour.

When corporate revenues are down or stagnant, talent managers typically shift their focus away from volume hiring to developing and improving existing employees. Executives are always challenged to make the correct “buy or build” decision, but when hiring is frozen (the buy option), obviously the only remaining tool available to drive change in organizational capability and capacity is to “build” your current employees.

Such efforts increase the emphasis organizations must place on project deployment for skill building, mentoring, leadership development, and succession planning to ensure that the organization’s capability and capacity evolve — not deteriorate — during the downturn.

The Goals of Internal Movement Programs

The broad goals of “building” your employees through internal movement generally fit into four categories:

  1. Increasing employee impact. A primary goal of internal movement is proactively shifting current employees into areas where they can have a higher impact on corporate results. Generally, business results improve because you move a larger number of your highly skilled individuals into growth areas. This is often called “right job” movement because it emphasizes either temporarily or permanently putting the right people with the right skills into high-impact jobs that more directly impact the things that matter the most during slow business periods.
  2. Motivation and retention. Periodically moving employees into new rotations or project assignments can increase their motivation and excitement levels. This in turn can lead to higher retention rates.
  3. Leadership development. Identifying and developing high-potential individuals is a major goal for organizations that want to ensure talent is available for manager and leader roles when the need arises. A significant portion of leadership development can be done “on the job” through stretch assignments. Moving potential leaders into different jobs also serves as an assessment mechanism.
  4. Skill improvement. Internal movement and stretch assignments among current employees can improve their skill levels or add new technical skill sets.

How Do “First Generation” and “Second Generation” Internal Movement Systems Differ?

Internal movement systems to drive employee development are not new. Most programs in existence today are variants of programs developed decades ago. They operate on tradition, have no direct alignment with business strategy, and are rarely called upon to demonstrate an impact on organizational performance.

These traditional “first generation” internal movement programs either rotate newly hired employees through a static group of rotations, push potential leaders through a series of available assignments, or rely upon self-nomination via internal job boards. Their goal is generally quite narrow: to provide employees a mechanism to move throughout the organization when a manager is not driving movement. They usually focus on “whole job” movement, in that most of the offered jobs are for promotions or lateral moves into other full-time permanent assignments.

Many of these legacy programs were designed to give existing employees a preference over external talent by providing a one- or two-week head-start for internal employees to apply, before external applicants are considered.

First-generation programs are merely operational and provide no strategic benefit. During the last few years, a new or “second generation” of internal movement programs has emerged at firms like Booz Allen and Microsoft. Unlike their predecessors, the second-generation internal movement (intra-placement programs) is proactive. Many rely upon teams of recruiters to identify internal employees who should be moving to new assignments and charge them with finding roles where the talent would be of greater value to the organization. They focus on business alignment, accelerated deployment, and retention of top talent. They consider what’s best for the employee and the needs of the organization to ensure that the placement will create the highest business impact. These new systems rely heavily on technology and metrics to ensure that they improve ROI and business impact.

The Key Elements of Second-Generation Systems

Some key elements that differentiate the newer “second-generation” internal movement systems:

  • Proactive. Rather than making the decision to move to an assignment on their own, individuals are approached in order to increase both the volume and the frequency of internal transfers.
  • Targeted movements. All movement is directed in order to increase its impact. Employees are not encouraged to make placement decisions based on a whim. Instead, individuals are provided with education and guidance related to what is the best placement based on their career aspirations as well as where they might have the most impact. The decision criteria for selecting individuals makes sure that the placement fits objective criteria including learning, retention, development, productivity, and business need.
  • Part-time rotations. The process includes the capability of part-time placements. This allows the employee to stay in their current job while working in another on a part-time basis in order to develop or learn (i.e., one-day-a-week).
  • Project opportunities. Internal movement may include assignment to specific short-term projects to fit a business need. Project placements can be full-time or part-time, but in either case, the primary goal is to meet a business need. Project opportunities can be “bid on,” filled by volunteers, or assigned.
  • Overload assignments. The process also offers short-term placements for short-term business “overload” needs (seasonal needs, advertising promotions, etc.).
  • Global. The system includes development and business impact assignments around the world.
  • Remote. The rotations or movements can include virtual, work-from-anywhere assignments.
  • “Outside the organization” placements. The process provides opportunities to place employees in joint ventures, at strategic partners, or even within a large customer’s organization.
  • Non-obvious placements. The process is designed to increase the movement of individuals into “non-obvious” positions (generally outside their current organizational chart, functional area, or business unit).
  • Technology. The entire process is electronic and paperless.
  • Rewards. The process recognizes and rewards (both in the form of bonuses and promotions) managers for finding, developing, and “releasing” talent to other parts of the business.
  • Metric-driven. The process continually improves its results based on metrics and data.

Reasons Why Effective Internal Movement Does Not Occur Naturally

If you believe in free trade and open markets, then you certainly understand the value of open competition. It’s hard to argue against the benefits of “right job” internal movement. Most understand the benefit of having the most skilled and best-performing player in each key position.

For example, you certainly wouldn’t want a great basketball player like Michael Jordan playing baseball when his highest skill and impact area is basketball. In the same light, you wouldn’t want a highly innovative individual working in a commodity business when their impact could be much greater if they worked in a fast-growth business unit.

Unfortunately, most internal movement systems are neither open nor competitive. Managers and HR policies almost universally restrict actively recruiting current employees away from their current assignments. In addition, many corporations allow managers to have veto power over losing an employee to an internal transfer or may require an individual to stay in a new position for at least two years before they can move to another.

It’s important to realize specifically why traditional “job-posting” and internal movement systems don’t work, so that you can design new systems that minimize the traditional weak points or flaws.

Pain Points in First-Generation Internal Movement Systems

  • Talent “ownership” and hoarding. Most managers operate under the mindset that once they get top talent, they own it. It doesn’t seem to matter whether the talent was hired or developed by them; once they have talent on their teams, they are reluctant to let it go. As part of this “hoarding” behavior, they often discourage team members from even applying for internal positions and some even punish those who try to leave for being disloyal. Breaking this selfish and narrow perspective is critical if you are to get managers to adopt the superior mindset, which is that managers need to be talent developers and “releasers” because it’s best for the corporation to have the agility to rapidly move people to areas of immediate need without having to “fight” silos and political battles. The ultimate goal of any internal movement system is to get individual managers to adopt the role of being “talent launching pads” that find, develop, and then disperse talent to other teams or business units. Essentially, every manager accepts the role as a “farm team” that quickly disperses talent whenever it is ready.
  • “Passive” job seekers. Individuals who design internal movement systems seem to lose track of the fact that when you are hiring external candidates, there are two basic types: those who are actively looking for jobs and those who are not (the so-called passive job seeker). It only makes sense that once these “passive” or non-active job seekers become employees, that they would retain the same traits that result in frequent movement. If most of your employees are not “active” job seekers, it is unlikely that they will take advantage of any internal job posting or internal movement system without some prodding or encouragement.
  • Frustration with the process. Most internal job posting and movement systems are not particularly user-friendly. Unless you’re an insider, it’s hard to find out much about a job opening beyond the position description. Rejected employees seldom receive any guidance as to what they did right or wrong. Many of the jobs are “wired,” meaning that even though they’re posted, the person who will actually get the job has already been determined. Some internal movement systems make the mistake of limiting future movement (you must stay in the job 24 months before you can apply for another internally), and this hurts the corporation when an urgent need opens up sooner. Other systems even require your current manager’s approval before you can apply or accept another internal job, which certainly discourages free movement. The slowness and frustration associated with many internal movement processes often results in the very best employees leaving the company, because external recruiters are more proactive, faster, and do a much better job of praising and encouraging an individual to switch jobs.
  • Targeted movement. Most internal movement systems leave the decision of “who should move to where and when” up to the individual employee or manager, neither of which have enough visibility into the organization’s grand needs to drive effective movement. Most employees have no information or even access to a way of identifying which jobs or business units are both the best for their career advancement and for the growth of the corporation. As a result of this lack of information, individual employees are forced to be self-centered, because corporations give little guidance to employees about skill shortages, growth rates, job security risks, etc. This forces employees to make their own choices about when and where to move. A superior process educates them about key corporate needs and areas that best fit employees’ individual career goals.
  • No short-term overflow capability. In a rapidly changing business environment, it’s important to be able to make short-term temporary relocations, as well as long-term permanent ones. Unfortunately, most systems aren’t equipped to handle short-term redeployments. For example, if you have a business situation where you have a short-term sudden influx of customer calls, it’s important to have the “overflow” capability of handling the sudden increase in calls. Most systems just don’t have this capability.
  • Weak management of the process. Most internal movement systems are poorly managed or in some cases literally unmanaged. They are often operated by individuals with a “clerical mentality.” Some of the first-generation systems provide no candidate screening, so managers must review every internal applicant. Others arbitrarily and prematurely screen out individuals who could have made an outstanding contribution. Most processes use only rudimentary technology, have no customer satisfaction assessment, and have no strategic metrics that directly assess the business impact of ineffective or “too slow” internal movement.
  • Focus solely on employees. The majority of internal movement programs focus on the segment of the labor force that is very quickly becoming the minority. Organizations are becoming much more adept at leveraging contingent labor (temporary workers, contract workers, consultants, outsourced labor, labor on loan from strategic partners, etc.). Unfortunately, none of the talent management systems are being retooled to ensure management beyond the basics of procurement for the growing labor segment. Internal movement is perhaps one of the most critical activities governing this segment, as contingent labor is often leveraged to add immediate capability or capacity related to strategic objectives.

Chances are, you may have experienced many of the frustrations and gaps in logic related to internal movement programs identified in part one of this series. Next week, part two will dive into the benefits of improving internal movement systems.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.