Hiring 30+% through internal mobility & referrals is a great idea

Internal mobility and referrals often constitute a surprisingly small percentage of total hires. To me, this is puzzling. Especially given that internal talent is the most secure choice for any organization. Employees already know the organization and the work involved, and you have detailed information about their performance. Despite this, a culture of fear—"do not steal my people"—often prevails, hindering internal mobility.

The Challenge of Internal Mobility

The fear of losing valuable team members to other departments translates to "Don’t steal my people to retain them within the organization,but it is totally fine if they are approached by competitors." Since you cannot prevent external poaching at all, blocking internal mobility is counterproductive as it increases the likelihood of them leaving. This especially is true for your High-performing individuals as they expect growth and new opportunities as part of their career development. If you don’t give it to them they will go somewhere else.

The Power of Referrals

Organizations that do not prioritize internal mobility, growth, and development struggle to motivate employees to refer candidates from their networks. The number of referrals received is a strong indicator of how employees feel about working for your organization. If your referrals are low, this suggests a cultural issue, not a problem with the reward scheme. More on that in a moment.

Who Owns Internal Mobility?

HR should own internal mobility as an important tool of talent management. This encompasses identifying talent, L&D, compensation, performance management, promotion schemes, and succession planning. When executed properly internal mobility will play a central role in all of these.

The Role of Talent Acquisition

Talent Acquisition (TA) should manage the process, ensuring internal candidates are prioritized. Internal candidates should be able to apply before external candidates, always receive an interview, and have all job opportunities clearly communicated to all employees through a dedicated internal job portal. TA's role is to make internal mobility seamless, while it is HR's role is to normalize and expect internal mobility as part of talent development.

Effective Referral Management

In many organizations, only 0-5% of hires are made through referrals, often due to a perceived lack of a good referral bonus program. However, working with many organizations around the world it is clear that monetary rewards alone do not drive referrals. You need to understand the key factor for an employee to decide to refer someone or not. If I refer someone to my organization, I am putting my own personal reputation and relationship on the line with this person. So I am only inclined to put people forward if I know they are treated well in the process and the company culture is in line with my own values. And yes, I have seen multiple examples of organizations having bonuses up to 10k in place and still only hire 5% or less through referrals.?

So, if your referral rate is around 5% or lower, you likely have a cultural problem. Successful organizations are able to hire 30% or more of their employees through referrals, regardless of whether they offer monetary rewards or just a simple "thank you." Referrals indicate how proud employees are of working for the organization. I am a firm believer that you only need to put the right process in place, and the number of referrals is a side effect of genuinely being a great place to work.?

TA's Role in Referrals

TA should remove obstacles and ensure a smooth referral process. Every employee should be able to submit referrals easily for any role, with a low-effort and mobile-friendly process. Restricting access, for example, only allowing HQ employees to use the referral portal, sends a negative message to other workers and undermines their sense of pride in the company.

Key to Success: Communication

Maintaining up-to-date communication is crucial for successful internal mobility and referrals. Implement solutions that automatically update both the referee and the referred person on their status in the process. Modern Applicant Tracking Systems (ATS) like SmartRecruiters offer this feature. This is not an endorsement of SmartRecruiters; the critical point is to understand you need to ensure you respect and cherish your employees putting their personal reputation on the line. For internal mobility, work with your HR counterparts to figure out how you can foster a culture where moving within the organization is expected, rather than discouraged.