The Employment Edge #006 Blocking internal transfers: The High Cost of Saying No

Imagine this: Your star employee, groomed as your successor, expresses a desire to move to another team for new challenges, seeking professional growth. This exceptional team member, consistently delivering outstanding results, is irreplaceable. Reluctantly, you say no, emphasizing their value and your strategic plans. Weeks later, they resign. What went wrong?

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The High Cost of Saying No: When a star employee seeks new challenges, it's a testament to their ambition and drive. However, when their request is met with a refusal, citing their indispensability, the consequences can be significant.

I recently spoke with a bright and motivated project manager who was looking to move to another team. They had plateaued in their current role and felt they had a great relationship with their manager. So they weren't terribly concerned about being blocked for a move to a new team.

I caught them on a day where they were reeling from being denied the internal transfer by none other than their own manager. Despite the individual's readiness and eagerness to tackle new challenges, they were told they were too valuable in their current role to make the move. Their manager cited timing concerns, expressing an unpreparedness to lose such a valuable team member.

Frankly, it was recruiter gold. They experienced the corporate hurt that made them primed to make a move. It's a poignant reminder that impeding the progress of enthusiastic and driven individuals can lead to severe consequences. External recruiters find it almost too easy to recognize and capitalize on the untapped potential within these individuals. They know what they want, they've expressed it, yet they find themselves blocked from the growth opportunities they're looking for.

The Paradox of Irreplaceability: While star employees undoubtedly contribute significantly to an organization's success, it's important to recognize the paradoxical nature of deeming them irreplaceable. The danger lies in overemphasizing their value, leading to unintended consequences. Stifled growth, hindered team dynamics, and a culture that inadvertently pushes employees towards external opportunities are among the risks associated with this perception.

Harvard Business Review Insights: "Why Rejected Internal Candidates End Up Quitting" (July 2021): Drawing insights from the July 2021 HBR article by JR Keller and Kathryn Dlugos, titled "Research: Why Rejected Internal Candidates End Up Quitting," sheds light on the challenges and consequences organizations face when rejecting internal candidates for job positions.

Link to the HRB article here

Understanding Turnover After Rejection: The HBR study, analyzing over 9,000 rejection experiences at a Fortune 100 company, reveals a crucial finding – rejected internal candidates are almost twice as likely to leave the organization compared to those who were hired internally or did not apply for a new job. The key takeaway is that while rejection may be inevitable, turnover is not. Employees are more likely to stay if they believe in future career advancement opportunities within the organization.

Critical Aspects Influencing Employee Reactions: The article highlights two critical aspects of the hiring process that significantly impact employees' reactions to rejection:

1. Interviewing with the Hiring Manager: Internal candidates rejected after interviewing with the hiring manager are half as likely to leave compared to those rejected earlier in the process. The interview signals to candidates that they possess the necessary characteristics for the job and provides valuable feedback for future roles.
2. Rejection in Favor of Internal vs. External Candidates: The likelihood of a rejected candidate leaving is reduced by half if they were passed over in favor of an internal candidate rather than an external one. Positive social comparison and the belief that organizational choices predict future decisions play a pivotal role in this scenario.

Practical Steps for Retention: To address retention challenges, the authors suggest practical steps such as strategic considerations for candidate interviews, ensuring applicant tracking systems prioritize applicants the organization wants to retain, and redirecting rejected candidates to other internal roles for which they might be better qualified.

The information about rejected internal candidates being almost twice as likely to leave the organization is highly relevant to situations where employees are being prevented from internal transfers. Here's how:

1. Risk of Losing Talent: When managers block employees from internal transfers, it increases the likelihood of these employees feeling frustrated, undervalued, or stagnant in their current roles. The study suggests that such rejection can be a significant factor contributing to voluntary turnover. This means organizations risk losing valuable talent by not allowing internal mobility.
2. Employee Frustration and Disengagement: Being denied the opportunity to explore new challenges and roles internally can lead to frustration and disengagement among employees. They might feel their career aspirations are not being considered, and this can impact their morale and commitment to the organization.
3. Impact on Team Dynamics: If employees are actively seeking internal transfers for growth opportunities and are consistently denied, it can create a negative impact on team dynamics. Other team members may witness this and perceive limited opportunities for career development within the organization, potentially affecting overall team morale.
4. Attracting External Talent: The rejection of internal candidates also has implications for attracting external talent. The organization may gain a reputation as one that does not prioritize internal talent development, making it less attractive for prospective employees who value opportunities for career progression.
5. Knowledge and Skill Drain: Blocking internal transfers might result in the loss of valuable knowledge and skills that the employee could have brought to a new role within the organization. This can hinder the overall growth and adaptability of the company.

What can both leaders and their employees do to bridge the gap between wanting to learn and grow and taking that energy away from their current team to another one?

Recommendations:

For Leaders:

• Open Communication: Engage in open and transparent communication with employees about their career aspirations and the reasons behind any rejection.
• Talent Development Plans: Develop talent development plans that align with both individual career goals and organizational needs, ensuring a balance between retention and professional growth.

For Employees:

• Open Dialogue: Communicate openly with your leader about career aspirations and the desire for internal mobility.
• Skill Development: Continuously enhance skills and competencies to make a stronger case for internal transfers.
• Networking: Build internal networks and seek mentorship to increase visibility and support for career moves.

In summary, the information underscores the importance of fostering a culture of internal mobility and providing avenues for employees to explore new opportunities within the organization. Proactively addressing the factors leading to rejection and promoting a supportive environment for professional growth can significantly contribute to talent retention and overall organizational success.

There's a critical need for organizations to strategically navigate the delicate balance between retaining star employees and fostering their professional growth. By implementing thoughtful talent management strategies, organizations can mitigate turnover risks and ensure the continuous development and success of their internal talent pool. The untapped potential within your organization is a valuable resource – handle it with care to prevent knowledge loss and turnover.

**Discover how Integria Consulting can enhance your talent acquisition efforts. Contact us to receive support in establishing a Center of Excellence dedicated to delivering exceptional candidate experiences. We excel in streamlining recruitment processes, eliminating bottlenecks, and alleviating frustrations for both your recruitment team and hiring managers, ultimately attracting the top talent you seek. Reach out to us for tailored coaching services today.

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