Are you overlooking the skilled talent in your workforce?
If the answer is yes, you are not alone. Only 28% of talent acquisition leaders today consider internal candidates when looking to fill vacancies.
Laura Randell, CEO of global recruitment strategy and HR technology consulting company PeopleMatters, explains, “In highly evolved organizations where succession planning and performance reviews happen regularly, and transparency of hiring practices is the norm, looking to internal candidates first is natural.” Yet, the vast majority of small to midsize companies do not have a process for succession planning. There is no way to know who might be the best person in the organization for the role, so companies look externally as a first step. “The assumption is that they don’t exist, or it’s easier to just look outside,” Randell continues.
Overlooking talent within your own organization is risky. Especially in today’s competitive environment. According to the Bureau of Labor Statistics, voluntary turnover levels are growing — a direct sign that employee loyalty is on the decline.
Yet, a Talent Trends study from LinkedIn shows that 25% of employees actually prefer to hang in there in hopes of a promotion. And the report also shows that 24% of employees will consider a move if overlooked for a promotion. In fact, career advancement is the most common reason employees jump ship. Census and Bureau of Labor Statistics data show that 95% of hiring is to fill existing positions — pointing to poor retention as the root cause.
Hiring is difficult and costly. Retention is on the decline. Why, then, aren’t hiring managers seeing beyond the end of their noses when sniffing out talent?
Research has pointed to three major causes:
- Perceived Internal Skills Gap: Some hiring managers assume existing employees lack the exact skill match they’re hoping to find. Or they are looking for newer skills that aren’t yet in evidence with their existing talent pool.
Skill needs evolve and emerge — especially in tech-focused roles. It is difficult for workers to perform their day to day duties, much less exercise and stay current on advancing skills.
- Poor Planning: Some hiring managers are planning for attrition rather than training for retention. Rather than investing in the existing workforce, companies fill the pipeline with poached talent. With the assumption that new talent will bring the skills they crave.
Hiring organizations tend to overestimate the “portability” of skills and experience. And that includes how effectively skills can be applied in new organizations. New hires often underperform, as past success is often due to the companies for which they worked. Internal hires bring organizational knowledge that helps them get up to speed in new roles faster. Internal hiring also builds a healthy referral pipeline from happy employees, since people naturally tend to refer others when their own career has grown in the company.
- Panic Over Flight Risk: Some hiring managers fear that workers will leave and take their valuable training with them. Or, some may fear that promoting from within will leave a difficult to fill gap in their own department.
Ask yourself the common sense question. How much of their future will an employee invest with a company when the company makes them feel like a commodity not worth the investment?
What message are you sending to your workforce? The wrong message comes at a high cost. According to the Center for American Progress, it costs about 20% of an employee’s salary to replace that individual. And, in the end, the cycle of replacing employees only winds up costing more than upskilling.
Apprenticeship programs are a proven way to uncover untapped talent in your workforce and reduce the financial burden and risks of external hiring. Consider not only what an internal candidate has done, but what he or she is capable of doing — with programs that identify crossover skills and structure training of new, advanced skills.
What about that entry-level gap left by a promoted worker? Why not backfill that role with an entry-level apprentice! Mentors, Success Coaches, training programs, and all the necessary paperwork will already be in place for both incumbent and new talent.
Viola! You now have a growing workforce of loyal employees. All right under your nose.
If you’d like to learn more about the differences between new hires and apprentices, check this out: A Candid Candidate Comparison: Who Would You Choose for Your Company?