iLogos Study Shows Companies Link Internal Mobility Programs to Retention
Study finds those organizations that have a formal mobility policy report four percent less turnover
San Francisco, CA – August 20, 2003
iLogos Research (www.ilogos.com), the leading provider of staffing economics research and benchmarking, today released Internal Mobility, a groundbreaking study that examines and presents results of internal mobility practices and processes for more than 70 large and global corporations, representing more than 3.5 million employees.
According to the survey, 76 percent of companies implement internal mobility programs to increase retention, and 61 percent internally fill 40 percent or more open positions annually. Only 12 percent of respondents report a separate budget for internal mobility. The survey also finds that companies having a formal mobility policy show a four percent higher rate of retention. An executive summary of the study can be downloaded at www.ilogos.com/en/ilogosreports. iLogos Research is an independent division of Recruitsoft, Inc., the leading provider of enterprise staffing solutions for large organizations.
iLogos Founder and President Yves Lermusiaux stated, “When the corporate internal mobility process is optimized, organizations can leverage the existing employee base to produce powerful results that directly increase productivity, retention and bottom-line savings. An internal mobility initiative results in direct cost savings, through lower severance and sourcing costs as well as reductions in staffing department labor and onboarding costs.”
Positive correlation between formal internal mobility policies and retention. According to the survey, companies reporting internal fills of 80 percent or higher first turn to internal sourcing more than 75 percent of the time. Sixty-two percent of survey respondents report that their organization first turns to internal sources to fill an open job position at least three-quarters of the time. Additionally, 27 percent of respondents report they always turn to internal candidates first while only five percent never turn internally to source. Responding companies having a formal internal mobility policy report a turnover rate of 10.9 percent; the companies without a formal internal mobility policy report an average turnover rate of 14.9 percent.
Lermusiaux explained, “Some companies have focused on rates of retention in the past; however, never before have executives been able to calculate the impact of decreased turnover. In order to help organizations achieve this important objective, our report provides financial models and strategies articulated around five key dimensions including purpose clarity, policy guidelines, process design, platform capabilities and performance measures.”
He continued, “Our study’s financial model uses a conservative estimate that the loss of one person is equal to one year of salary. If, for example, a company with 100,000 employees at an average salary of $40,000 has a turnover rate of ten percent, the cost of that turnover equates to $400 million.”
Role of an employee skills database. Nearly two-thirds of survey respondents consider an employee skills database to be important to the success of an internal mobility initiative. With this type of database, corporations can formalize their programs to create a library of organizational skills, competency models and standardized job templates, and create profile questions that are unique to the internal audience.
Lermusiaux explained, “Having a skills inventory database allows an organization to allocate resources optimally, re-deploy or downsize as needed, and engage in strategic workforce planning. Self-service web-based staffing management solutions exist today to empower employees to create and update personal profiles and apply for career opportunities. Today, more companies are phasing in internal job notification by email and are implementing profile-based job agents to help them do this.”
About iLogos Research
iLogos Research is the leading provider of staffing-related financial metrics. iLogos serves major corporations throughout the world with business analytics that tie staffing technology and process improvements to reduced costs and improved financial results. iLogos and its analysts are highly regarded speakers and authors, and are quoted extensively in leading media worldwide including Investors Business Daily, Harvard Business Review, BusinessWeek, The Wall Street Journal, The Financial Times, and Human Resource Executive. Published reports and studies include: Value Creation Through Corporate Careers Websites, Economics of Candidate Relationship Databases, Where The Jobs Are; Trends in Fortune 500 Careers Web Site Recruiting, Best Practices for Careers Web Site Recruiting for the Fortune 500, European 500, Canadian 100, and CAC40 (France), Perception vs. Reality: Jobseeker Behavior Online; and Global 500 Web Site Recruiting Surveys. Founded in 1997 as iLogos Internet Intelligence, iLogos Research (www.ilogos.com) is the independent strategic staffing research and human capital metrics consulting division of Recruitsoft.
About Recruitsoft
Recruitsoft delivers a comprehensive suite of solutions to manage complete enterprise staffing: professional, hourly, agency, campus, centralized, decentralized and multinational. Recruitsoft solutions optimize the flow of talent throughout large organizations such as Honeywell, Hewlett-Packard, Dow Chemical, Blockbuster, Fortis Inc., Washington Mutual, Agilent Technologies, Deloitte Touche Tohmatsu, Pitney Bowes Inc., PepsiAmericas, P & G, Thomson, Group Suez, Serono, Toyota, The Gillette Company, Bombardier, Anthem Blue Cross and Blue Shield and UnitedHealth Group, among many others. Recruitsoft has received a number of accolades, recently including the industry’s leading staffing solution according to the HR.com and Talent Market Group’s 2003 Buyers Guide.
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