Have Your Cake and Eat It, Too: Retain Talented Employees by Offering New Opportunities in House
October 12, 2015 | Business and Careers
One of the ongoing human resource challenges organizations face is managing the balance between retaining talented, experienced employees and recruiting new generations of workers to bring fresh perspectives to the business.
In my view, successful businesses need to have a mix of both. Longer-tenured employees add value because they've gained institutional knowledge that helps them to be more insightful and productive. New employees add value because they come to the table unencumbered by how things have always been done, and companies need their original ideas and creative thinking. Yet, it can sometimes feel risky to pursue external talent—especially those early in their careers. In 2014, 25- to 32-year-olds stayed on the job an average of just three years, according to the U.S. Bureau of Labor Statistics. A manager may ask, “Why take a chance on them when history tells us they'll be looking for a new job in a couple of years?”
I believe the answer is to invest in hiring the best, regardless of their age, and when they're ready for a new job, encourage them to stay long-term by giving them the opportunity to make career moves within the organization. That's something I think my company does very well. Here, when people perform and show interest, they can start in one department and, over time, take on different roles across the company that are often unrelated to their original training and background. This happens because they have demonstrated skills and performance that can be transferred to different areas. One of our senior leaders, for example, moved internally three times—each time to an entirely new department—and today leads a team of more than 100 people.
By encouraging talented people to stretch, the possibilities are endless and everybody benefits. Employees are re-energized when they know they'll be trying their hand at something new. They have an opportunity to grow and learn and be continuously challenged. And by making a career move internally, they get to develop new skills without leaving behind valuable relationships and knowledge they’ve built along the way—not to mention the benefits they get to keep, such as vesting in the company's 401(k) or pension.
Employers benefit in many ways, too. When existing employees take on new positions within the company, they bring a fresh, external perspective—much like that of a new hire—yet their ideas are rooted in a clear understanding of the business and its mission. Internal recruiting also minimizes turnover costs. According to a Society for Human Resource Management report, the cost to replace an employee with an external hire is estimated to be 60 percent of the position's annual salary.
For some, successfully recruiting from within may require a shift in thinking about the concept of long-term employment. Because talented individuals won't necessarily stay in the same role or progress along a predetermined path for all of their working lives, companies need to allow for flexibility. But by creating a culture that encourages smart people to experiment and grow, organizations can benefit from both their innovative thinking and their institutional knowledge.