Your Internal Diamond Mine

The employees you already have are a prime source for the positions you have to fill. As the shortage of experienced, skilled talent becomes even greater, organizations that have developed solid internal recruiting practices and policies will be better off than those that haven’t. Your current workforce is a “diamond mind” of skills, corporate culture, and loyalty. By tapping into them as a source for open positions, organizations achieve greater loyalty, lower turnover, improved productivity and profits. Yet, very few organizations that I work with have effective, modern internal transfer and promotion policies. There are many reasons for this. One of the major reasons is that they have little information about the current workforce. Even though ERP and HRIS systems can usually accommodate storing and allowing a search for employees’ education, experience, and skills, very few organizations have input this data. Therefore, employees have to raise their hands if they are interested, and recruiters or hiring managers have no way to search for passive internal candidates.

The other major hurdle is that HR policies that were written in a time when labor and skills were abundant, and turnover low. These policies are often restrictive and discourage employees from moving. In fact, I was at a company a few days ago where employees are not allowed to apply for jobs that are posted on the Internet unless they have an okay from their manager and have been in their current position for at least six months! Surprisingly, most of the HR staff saw no problem with this practice and were even supportive of it, despite the fact that there are no similar constraints on an employee looking outside the organization for a position. What they have done, in effect, is create a disadvantage for themselves for no discernable reason other than a belief that “this is what should be.”

Unfortunately, we live in a real world where the market rules. HR has to be responsive to that market or lose good employees who most likely would have stayed if they could have made a move. Today, more than ever, employees are investors in our organizations and they can choose whether or not they share their expertise and skills with us. Each employee has a built-in return on investment meter that is constantly sampling the atmosphere and deciding if she is gaining or losing from a continuing association with their organization. As long as the employee feels that they are gaining skills and are being stimulated, they don’t look for different jobs and they contribute to the best of their ability within the system. But whenever the balance shifts even slightly, employees become vulnerable to any offer that may present itself. That is why having managers who have a history of good employee loyalty and low turnover are so valuable. Internal Recruiting I define several types of internal recruiting:

Active: When an employee chooses to look for a new position

Passive: When recruiters can search a skills portfolio of current employees and then tap a current employee on the shoulder for a possible job
Manager-driven: When an employee’s manager sees the potential someone has or senses a lack of energy and suggests a move
Program-driven: When an organizations creates development opportunities for internal people and recruits current employees for development and eventual placement in new positions.

I will focus the rest of this article on the active internal candidate, but all recruiters and HR representatives should also consider the other types of recruiting and make sure they have policies to support each. Employees become active because they are looking for a new challenge, aren’t happy with their current assignment or boss, or feel that the new position will offer more of a return on their investment. To deny them the opportunity and place HR policy in their way is not only a sure way to lose them to someone else, it is also just plain dumb. Happy employees who are being treated as investors will be unlikely to leave. Recruiters should be working closely with HR and hiring managers to identify good employees and help them find ways to continue contributing to the organization. Sometimes this means backfilling positions or moving less experienced employees into jobs that an outside person might be able to do. Here are five things every organization and HR group be doing or should have in place today:

Abolish all policies that limit or control how or when employees apply for positions within an organization. Policies should encourage managers to let employees leave for new opportunities and should encourage them to provide development opportunities. Organizations such as Hewlett-Packard, IBM, and General Electric have faithfully followed this strategy for decades and believe that it has directly contributed to their financial success. The basic philosophy should be that every employee has the same or better employment opportunities inside the company as exist in the open marketplace.
Earmark certain jobs as entry-level, and fill these jobs with internal employees who want to become cross-functionally trained and learn a new set of skills. I have seen an organization take an associate buyer position and hire employees into that who have had experience selling the products, but are not trained as buyers. A mentor helps guide them, as do incumbents in those jobs. This often happens with sales positions, some manufacturing jobs, and within HR. Many other functions can offer similar opportunities to employees. In the end, this practice is as cheap as recruiting in new people who do not know the products, the culture, and who do not have a network of fellow employees to help them. In most cases, existing employees reach the required productivity levels sooner than the “experienced” external hire because of these other skills.
Develop a communication and education program for managers that explains the business case for internal employee transfer. It is not very hard to prove the cost of turnover and to show that it is often much higher than the cost to train a current employee. It is not hard to show the high cost of recruiting and the subsequent cost of training and assimilating a new employee who may not turn out to be as good as thought. It is not hard to show how great companies like IBM, Procter and Gamble, Johnson & Johnson, General Electric, and hundreds of others have encouraged and supported internal transfer with forward-thinking polices, good education and development, and with a reward to managers who hire internally and who allow their people to move on. Making a business case and educating managers is a necessary and critical part of any program that is successful.
Create policies that allow employees to try out new jobs for a short time to see if they like it and can do it well. Let employees share their job with some one else, so they can sample more than one kind of work or more than one project. Foster a spirit of sharing expertise and skills, not of owning the mind and body of someone.
Develop training programs aimed at providing people for specific and perhaps hard-to-fill positions. Cisco did this a few years ago by training people to be HTML programmers in an intensive several-week long program. IBM has had numerous programs which take in a cross-section of employees and train them to be programmers, salespeople, and so forth. It is often more cost effective to develop the talent you need than to recruit it. A recruiter’s job should be partly one of providing advice on the availability of talent and on whether it would be better to develop it or recruit it.

Developing a cross-functionally trained, broadly-skilled workforce is a strategic advantage. It gives your organization flexibility in dealing with market changes and allows a rapid response to new directions. Practices and policies that ignore or restrict or limit employee transfers and change within an organization are leftovers of organizations that are hierarchical, paternalistic, and slowly fading away. A 21st-century organization removes barriers and builds networks that power creativity and growth.