By Jonathan H. Westover, PhD
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Abstract: This article examines the complex issue of encouraging top employees to consider external job opportunities and provides a strategic perspective on retaining high-performing talent. Drawing from academic research and professional experience, it explores why high-caliber employees represent strategic assets deserving proactive retention efforts. The brief discusses the full costs of turnover, importance of loyal commitment, and balancing internal versus external mobility. It emphasizes crafting fulfilling career paths through development opportunities, mobility channels, and individualized career discussions. Additionally, the article advocates balancing traditional retention tactics with flexible, motivation-harnessing approaches to engage today's workforce. Overall, it argues the savviest talent management thoughtfully weighs open career coaching against organizational needs through attentive, long-term relationships with each employee.
As a management consultant who frequently focuses on talent and retention strategies, and as an academic researcher who has studied employee engagement and turnover extensively, I've come to adopt a cautious approach when advising high-potential employees about external career opportunities. While outward mobility can be an important part of an employee's long-term career development, encouraging one's top performers to seek opportunities elsewhere risks undermining an organization's deepest source of competitive advantage - its talent.
Today we will explain why it is important to be careful about openly encouraging your best employees to consider outside job offers, and offer suggestions for cultivating internal mobility instead.
Valuing Internal Talent as Strategic Assets
From an organizational perspective, high-performing employees represent far more than the salaries they command on the balance sheet. Talented individuals, especially those with rare and valuable skills, differentiated experiences and well-developed networks, make significant contributions that are extremely difficult to replace (Bersin, 2018; Cappelli, 2008). They drive innovation, inspire colleagues, retain institutional knowledge and help accelerate business outcomes. Select employees may even become spokespersons and advocates who strengthen an employer's brand appeal to prospective candidates. In knowledge-intensive industries especially, human capital drives competitive differentiation; cultivating and retaining key talent sustains market position (Hitt et al., 2001; Kor & Leblebici, 2005; Sirmon et al., 2007). While recruiting replacements is possible, "growing your own timber" retains firm-specific expertise and relationships that competitors cannot easily poach (Moore, 2019; Sheridan, 1992). High-potential employees should be viewed as strategic assets whose retention merits proactive talent management.
Recognizing Turnover's Hidden Costs
Voluntary turnover disrupts workflow and productivity as work is redistributed and new hires are onboarded, costing an average of one-fifth of a departing employee's annual salary in the U.S. (Boushey & Glynn, 2012). However, this commonly cited "replacement cost" metric fails to account for less tangible losses like momentum on major projects and initiatives, erosion of organizational memory and damage to employer brand (Hancock et al., 2013; Hancock, 2018). Dismissing turnover's full price tag risks tolerating unnecessary staff losses that meaningfully impair competitive and financial performance over the long-run (Gardner, 2005; Ton & Huckman, 2008). Key resignations may also demoralize existing employees and prompt further attrition through reduced engagement and trust in leadership (Glebbeek & Bax, 2004; Shaw et al., 2005). Routine turnover is inevitable, but senior leaders would be remiss not to consider broader replacement costs - both tangible and intangible - when entertaining exit opportunities for their top contributors (Holtom et al., 2008; Park & Shaw, 2013). Preserving high-caliber talent strengthens overall organizational resilience.
Loyalty, Commitment and Their Rewards
Of course, loyalty is a two-way street. Employees remain committed when they feel fairly treated, developed to their full potential and invested in by their employers (Allen et al., 2003; Meyer & Allen, 1997). High-performing individuals expect to progress in stature and responsibility in exchange for their dedication. Research correlates promotions with a decline in employee turnover, suggesting internal mobility plays a key retention role when coupled with competitive compensation and meaningful work (DeVaro & Morita, 2013; Sutton & Griffin, 2004). Some portion of external interest can stem from unfulfilled career aspirations within, while strategic employers effectively promote from within to signal future opportunity (Campbell et al., 2013; Huselid et al., 2005). Encouraging top talent to consider only external prospects risks weakening feelings of commitment by dismissing the organization's capacity to reward service and satisfaction of their ambitions (Ng et al., 2005; Nyberg, 2010). Proactively cultivating mobility channels sends the opposite message of long-term investment in prized staff.
Balancing Internal vs. External Mobility
Given turnover's high costs and loyalty's reciprocal nature, leaders are wise to thoughtfully manage both internal and external career paths for valued employees. Some degree of employee marketplace participation keeps skills sharp and market value current, while routine promotions maintain engagement by fulfilling career trajectories within (Amidei, 2020; Devaro & Morita, 2013). Exclusively restricting external options risks employee perceptions of limited opportunity and innovation; meanwhile, endorsing every outside inquiry risks the opposite and erodes retention efforts (Campbell, 2013; Trevor, 2001). The optimum balance calibrates internal growth to match, and ideally exceed, external trajectories available elsewhere when possible. Proactively mapping career progressions for each high-potential individual - as opposed to passively hoping retention occurs - strategically fulfills goals, retains critical skills and also fortifies talent pipelines benefiting future leadership succession (Cappelli & Keller, 2013; Lepak & Snell, 1999). Achieving this balance demands nuanced talent discussions and management thoughtfulness about each employee's unique situations and aspirations.
Building upon Internal Mobility's Foundation
Proactive internal mobility cultivates engaged talent that competitors cannot poach as effectively. Organizations must thoughtfully architect leadership and specialist tracks that challenge and reward top contributors. Rotational assignments introduce prized employees to new organizational domains while enriching their institutional understanding. High-impact project roles allow star players to directly influence strategic initiatives. Meanwhile, deliberate succession planning readies internal backups to seamlessly transition into pivotal management roles. Job crafting permits refining responsibilities to sustain long-term motivation and involvement (Wrzesniewski & Dutton, 2001). Internal skills academies upskill critical capabilities in areas like analytics, new technologies and management practices. Professional development support through coaching, mentoring circles and executive education assures competitiveness of human capital assets now and into the future. When paired with recognition and opportunities to shape the strategic direction, internal mobility anchors top talent and thwarts outside recruiting efforts (Baker & Walsh, 2018; Gardner, 2005).
Individual Career Conversations Matter Most
While broad retention efforts set the stage, success ultimately depends upon personalized employee relationships and ongoing career discussions between leaders and reports. These conversations determine whether employees' career hopes are better fulfilled internally or externally given their unique desires, duties and developmental readiness (Amidei, 2020; Gardner et al., 2011). As a consultant, I have found the most productive approach balances unconditional organizational commitment with candid career coaching. Leaders affirm the value and future prospects the individual provides, while also assessing their aspirations, market strengths and limitations preventing the ideal internal transfer or promotion in a given timeframe. In some instances, it may be in both parties' interests to explore select external options, especially if no viable internal path exists in the current role or location. Likewise, there may be opportunities to creatively restructure roles, expand responsibilities or define new objectives aligning someone's interests with mutual benefit. The art lies in combining advocacy, realism and care for each person's unique needs to maximize loyalty through openness and trust, not empty assurances (Gardner, 2018). These types of fulfilling career conversations play the largest retention role when properly handled on an individual basis.
Looking Beyond Traditional Retention Tactics
While staples like compensation, benefits, advancement opportunities and workplace culture strongly impact retention, today's changing workforces call for creative, engaging strategies beyond basics (Almer & Kaplan, 2002; Shaw et al., 2005). For knowledge employees especially, development, autonomy and impact become equally meaningful motivators (Dweck, 2016; Macey & Schneider, 2008). Strategies like outcome-based incentive plans that reward results, not face time, facilitate flexibility for working parents or to pursue external passions (Amabile & Kramer, 2011; Ertas, 2015). Sabbaticals allow renewal and skills renewal through travel, study or community service. Skill-stretching rotations into collaborators' teams expose staff to new problem domains and industry collaborations. Platforms like LinkedIn Learning provide any-time, customizable development untethered from traditional roles. Exposure to strategic leadership through task forces and pilot initiatives cultivates the varied skills driving future roles (Pfeffer, 1998; Campbell et al., 2012). Unconventional approaches better harness intrinsic motivation and challenge high achievers to sustain engagement and exceptional performance over the long-haul (Cameron & Spreitzer, 2011; Pink, 2009).
Conclusion
In today's labor market, retaining top talent requires nuanced leadership attentive to individuals, their career outlooks and the organizational context. While encouraging outside job consideration for high-performers may benefit some employees and their future prospects, an excessively open stance risks undervaluing prized human assets and neglects loyalty bred from internal development, mobility and relationship quality. Proactively architecting clear career paths, opportunities to influence organizational direction and personalized career discussions helps fulfill expectations of high-potential staff. Pairing traditional motivation strategies with creative, flexible approaches best motivates today's workforce by harnessing their intrinsic engagement and sustained high performance. With careful talent management, organizations can curb unnecessary turnover costs while cultivating the next generation of leadership from within. Overall, the savviest retention strategy balances openness and realism in service of fulfilling employees' and the enterprise's mutual ambitions through trustful partnerships over the long-term.
References
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Sheridan, J. E. (1992). Organizational culture and employee retention. Academy of Management Journal, 35(5), 1036–1056. https://doi.org/10.5465/256539
Boushey, H., & Glynn, S. J. (2012, November 16). There are significant business costs to replacing employees. Center for American Progress. https://www.americanprogress.org/article/there-are-significant-business-costs-to-replacing-employees/
Hancock, J. I., Allen, D. G., Bosco, F. A., McDaniel, K. R., & Pierce, C. A. (2013). Meta-analytic review of employee turnover as a predictor of firm performance. Journal of Management, 39(3), 573–603. https://doi.org/10.1177/0149206311424943
Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Chair/Professor, Organizational Leadership (UVU); OD Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.
Suggested Citation: Westover, J. H. (2024). Why I'm Careful About Encouraging My Best Employees to Consider Outside Job Offers. Human Capital Leadership Review, 13(3). doi.org/10.70175/hclreview.2020.13.3.14