In the lexicon of global economics, a trade deficit occurs when a country imports more goods and services than it exports.

We've observed a similar phenomenon among our client companies. It occurs when an organization imports more talent from outside the company than it exports from one part of the company to another part. We call this condition a “talent trade deficit.”

Why is it a cause for concern? Because it restricts the potential contributions of current employees and seriously diminishes the company’s return on its initial investment in them.

Very simply, if your company has a significant talent trade deficit, you’re not getting the best bang for the bucks you’ve already invested. At the risk of birthing yet another acronym, you have a negative R.O.I.T. – Return On Investment in Talent.

We’re all familiar with the arguments in favor of internal over external hiring. Among them, cost savings associated with advertising, database searches, background checks, etc., reduced time-to-productivity and enhanced employee engagement and retention.

But we believe a company’s talent trade deficit is a critical metric largely overlooked in these discussions because, as is true of most investments, talent that isn't allowed to grow and diversify doesn't provide an appreciable return. And such investments are further compromised if the talent is not also wisely apportioned across the company.

So, why don’t more companies work harder to reduce their talent trade deficits? Why is global talent mobility one of the most touted but flouted practices in corporations today?

Bloom Where You're Planted

“Bloom where you’re planted” is an old directive that has long encouraged people to take advantage of where they are and be grateful for their present situation. But when the Bishop of Geneva came up with this pithy idiom in the 16th century, he was talking to people whose primary method and hope of expanding their horizons depended on how far they could walk in a day.

Needless to say, we have moved beyond that. Or have we?

As long ago as 2010, PricewaterhouseCoopers’ Managing Tomorrow’s People series reported that “The growing importance of emerging markets will create a significant shift in mobility patterns, as skilled employees … increasingly operate across their home continent and beyond…”

As recently as 2019, Forbes Magazine reported, “… to succeed organizations must also leverage and mobilize existing talent into new roles, departments or offices. This mobility enables organizations to quickly meet changing business and market needs, increase efficiencies, unlock talent potential, and future-proof their workforce.”

But despite predictions and warnings like these, too many organizations are still limiting the scope and hope of talent mobility to single geographic locations, departments, functions or teams.

Historical talent mobility assumptions and practices have limited employees’ horizons to how far they can drive in a single day or how visible they are to the powers that be.

So, perhaps it’s time to ask some tough questions: How many of the talent gaps we identify can only be filled by imports? Could we fill them with existing talent investments that are trapped inside resumes-on-file, sealed silos and minimized mindsets?

We believe that talent mobility is too often relegated to the “Too Hard to Do” file not because leaders don’t recognize the need or benefit. Not because employees don’t demand it.

More often, talent mobility is futile because its leaders lack a free-trade mindset, a shared definition and a clear commitment.

Mindset: Tailormade Free Trade

Free trade typically refers to a situation where a government doesn't attempt to influence through tariffs or other prohibitions what its citizens can buy from or sell to another country.

Many if not most economists believe this results in lower prices for consumers, good economies of scale and a broader choice of products.

We believe it can also be tailored to provide a relevant model for a global talent mobility mindset.

In this context, free trade might be defined as “the belief that freely trading talent across departments, functions and geographies without ‘tariffs’ or other prohibitions drives both individual and organizational growth.” So, how do leaders cultivate a free trade mindset?

• Visualize the company’s talent assets residing in a global talent portfolio visible to and accessible by all, instead of in sealed silos that inhibit movement in or out. Then motivate and reward managers who not only reveal the assets in their individual portfolios but share them with the rest of the company.
  
  
• Differentiate between “top talent” and “swap talent.” Leaders with a global talent portfolio mindset place a high value on “swap talent” – employees who are the best choice to fill an urgent need for a high-demand skill set in another business unit or geography – whether or not they meet the typical criteria for “top talent.”
  
  
• Enforce a “Hone vs. Own” management responsibility for refining and improving talent, even if it may result in that talent moving on to a different location. And then provide visible rewards to managers who do so.
  
  
• Advocate both shifting as well as lifting talent. Then motivate and reward managers who not only lift employees up through their silos but, where possible, shift them over, across and through the company.
  
  
• Foster the perspective that “climbing a ladder” is not the only way to grow.

Definition: The Ins and Outs of Mobility

The visualizing, swapping, honing and shifting described above are key elements of a talent-free-trade mindset. They are also critical to managing a company’s talent trade deficit. But they are powerless without a clear and shared definition of “talent mobility.”

Talent mobility has been variously defined as “moving people within an organization,” “shifting employees in and out of an organization,” “the extent to which old employees leave and new employees enter into an organization” and “the ability or tendency to move from one position into another ideally better one.”

It’s not surprising, then, that when it comes to internal talent mobility, many managers don’t know whether they’re coming or going!

This is why we believe the best way to begin reducing a company’s talent trade deficit is to clearly define the meaning and implications of “talent mobility” within each organization. How tall, wide and deep will it be? Specifically:

• WHY are we doing it?
• WHAT is our strategy? The relative roles and responsibilities? The rules governing it?
• WHO will be the stakeholders and champions of the effort?
• WHERE will it be implemented?
• HOW will we measure it?

While cultivating a free-trade mindset and clarifying the five vital questions are important, they aren't sufficient to guarantee a better “return on investment in talent.”

Why? Because the touted benefits of sweeping organizational change are never enough to inspire employees who don't believe their leaders are truly committed to the effort.

Commitment: It Does Not Go Without Saying

Often, when we talk to clients about the importance of leadership commitment to a specific behavior, their first response is, “Well, that goes without saying.” We don’t think so.

While reducing talent trade deficits is critical to successful global talent mobility, the most powerful barrier to global talent mobility is not managers who don’t like to hone, shift or swap talent. It's those who don’t believe their leaders are committed to the challenge.

And we all know what really goes without saying when it comes to assessing leadership commitment - “If you want to know a company’s values, observe what it rewards.”

In summary, the challenge of talent mobility is no longer met by moving employees within their own soil and silos. Its rationale is no longer limited to employee satisfaction or retention. It is no longer simply about meeting the career demands of local at-risk employees.

Today, talent mobility is a global business imperative. It’s about the opportunities global mobility offers and the risks leaders take in ignoring them.

This article was written with Connie Bentley and Linda Rogers. It originally appeared on LinkedIn here.