A decade ago, “upward mobility” was the name of the game in career advancement. Employees who performed well and demonstrated potential strived for a promotion, climbing the corporate ladder to a more prestigious title and higher pay.

But, things have changed dramatically. Today’s employees now span multiple generations, cultures and geographies, all of whom have different needs and desires, to say nothing of the growing use of contingent workforces that have an entirely different set of needs. The shift has made career and talent management tougher than ever.

The challenge for employers is to find ways to keep employees from getting bored, reduce turnover and retain the best employees in a competitive talent market. According to Gallup’s recent poll on employee engagement, 32.6 percent of employees are engaged at work, while 50.9 percent of employees were “not engaged” and 16.4 percent were “actively disengaged.” Employee engagement averaged 32.9 percent from January to June of this year.

In order keep its best and brightest talent, companies must learn to foster a new form of career advancement that has nothing to do with climbing a ladder.

It’s absolutely true that not everyone is cut out for a management position, but that doesn’t mean they don’t have tremendous value to the organization or that organizations should find ways to retain its top performers.

What is internal mobility?

Rather than upward mobility, many employees desire “internal mobility,” which Bersin by Deloitte defines as a dynamic process for moving talent from role to role at every level, from leadership and professional ranks to operational staff. This new take on performance management is a key factor in successful talent acquisition and retention, and overall business success.

Employees want opportunities to develop, particularly millennials – the largest group in the workforce today. According to PwC’s report “Millennials at Work: Reshaping the Workplace,” millennials put a lot of stock into organizations that offer continuous learning opportunities. The report notes that 35 percent of respondents said they were attracted to employers who offer excellent training and development programs. The development opportunity that ranked highest, even more so than e-learning, is working with strong coaches and mentors.

Supporting internal mobility is crucial for boosting employee engagement, ensuring employees feel that they have a future within the organization. Making sure employees have an opportunity to progress in their careers, further expand or enhance their knowledge skills or experience, or develop deep subject matter expertise is critical for job satisfaction, performance, recruiting and retention. Exposing workers to stronger leaders and the opportunity to learn on-the-job should be a foundation of an organization’s talent development program.

Here are seven tips that can help organizations develop an internal talent mobility program:

  1. Encourage multi-directional career moves: The company organization chart is becoming much flatter with collaboration and work teams that focus on cross-function and interoperability. Enable your employees to apply their skills and talents where they make the most sense, rather than forcing them into a traditionally “upward” path. Instead, focus on creating a future path that meets both the employee’s and the company’s goals.
  2. Help managers identify high potentials, not just high performers: The Corporate Executive Board defines high potentials as having the ability, aspiration, values and commitment to rise and succeed in more critical positions. They must have all of these characteristics. But, not every high-performer is a high potential. High-performers don’t necessarily want to lead people. This is a big difference. By identifying who the high potentials and high performers are, leaders and HR can best identify which type of mobility will best suit their development needs, respectively. If an employee aspires to be a supervisor or leader, they can be connected with a leader who exhibits the core and job-specific competencies for their position. It’s the same for high performers, except they would be connection with other subject matter experts or specialists.
  3. Set clear goals: Identify one or two specific goals around your internal mobility program. After all, without goals and measurement, it will be difficult to evaluate success. Key goals might include improving employee engagement, retention of high potentials, lowering hiring costs, building leadership capacity, protecting intellectual property, avoiding productivity gaps due to attrition, and innovating faster.
  4. Be transparent: Make it clear that internal mobility is important to your company, and why, by translating your goals into a policy. It can be very detailed and extensive, or basic, but most importantly, be sure to address two very important points: When candidates can be sourced internally and who is eligible for an internal move. These criteria might include management approval, minimum time in a position or other factors. Also, outline the process. For example, when there is an open position, will it be posted internally for a certain number of days before external posting? Or posted simultaneously?
  5. Settle on metrics that track back to goals: Identify what data you will need to collect and analyze to measure success. Some important metrics include total turnover and turnover costs, employee engagement ratings, talent readiness or bench strength, voluntary turnover among high-potentials, internal versus external fills, the number of internal moves over time and quality of hire.
  6. Provide learning opportunities that make sense: In many cases, lateral or internal moves may require some additional training or skills building, and many employees are avid learners who want to gain a broader experience and perspective. However, attending a week-long off-site training may not be practical, so be sure that these opportunities are actually attainable. Provide on-demand, real-time access to training using online tools as much as possible to provide the flexibility and agility your employees need to take advantage of career path training.
  7. Make it part of your culture: For long-term success and sustainability, it’s important to build and continue to invest in career management, learning and coaching. According to research by Bersin by Deloitte and Glassdoor, employees value career growth at nearly twice the rate at which they value pay and benefits. Provide transition training tools, but also hold employees accountable for their own development. Institute a defined mentorship program with clear objectives and process and reward leaders who act as coaches.

Set a future career path with internal mobility

With workplace demographics and employee motivations and desires shifting so dramatically, companies must adapt their talent attraction and retention strategies to support ongoing engagement and performance, not just upward mobility.

By investing in high-potential talent and giving employees an opportunity to progress – not necessarily into management, but into the roles and career path that makes the most sense for them – companies can not only retain top-performers, but also gain maximum performance from them in an environment where they feel valued. It’s a brilliant win-win.