Novelis saved roughly $2 million over the past two fiscal years.
Cisco increased their employees’ career satisfaction by 20%.
Booz Allen Hamilton reduced their attrition rate by over 17%.

The common thread between these business outcomes – internal hiring.

The traditional practice of hiring external candidates is slowly fading. It’s still a lucrative practice when it comes to hiring senior management. But companies are largely turning inwards to find better fitment. Going by the examples above, it works! A study by Prof. Matthew Bidwell, University of Wharton, examined nearly 5,300 employees, and found that not only did external hires earn 18% more, but were also 61% more likely to be laid off from that position.

Makes internal hiring all the more compelling, right?

There is one thing that might be preventing this practice from blossoming fully. Michael Watkins, co-founder of Genesis Advisers, calls it in-boarding – the process of bringing internal hires up-to-speed with their new roles. He believes that because the candidate is familiar with the organization, not much attention is given to their transition. This leaves the employee to sink or swim. Watkins surveyed 150 employees and concluded that “employees making internal moves rated the difficulty of their transitions at an average of 70% as hard as joining a new company. Fully 35% of them rated their recent moves to be as or more difficult than joining as new hires.

Here are some ideas that can soften the impact of these transitions.

  1. Assess transition risk. Some role jumps are smoother than the other. What makes it challenging, is the different kinds of transition an employee makes, as s/he takes on the new role. Are people moving to a higher designation, along with a new function? Is their office space changing geographically? Who are they reporting into? Taking into account all factors that are changing, help minimize the risk of a move.
  2. Focus on learning. Along with the newness, internal moves have a strong learning element. What kind of coaching will help the employee function at their best? What skills do they need to build immediately? What credibility do they have to establish? Are there cultural or ethnic nuances to be mastered? Creating a 3-month learning plan with clear goals will be of great help in ensuring that internal hires deliver value.
  3. Build organizational agility. Change management isn’t easy. There’s always starting trouble. To make it less jarring, an organization’s benefit lies in accelerating everyone. Encourage employees to build new skills every year or even contribute cross-functionally. Actively look for better role fitment for all your people. If you can help everyone get up to speed faster, the business will be nimble and responsive.

If you can invest in a robust in-boarding system, you can see a spike in employee morale and performance. That is something no leader can deny. What is your first step going to be?

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