Latest / The Diversity Career Podcast with Fexingo: Inclusion, Equity, and Underrepresented Professionals / How One Company Used Internal Mobility to Retain Underrepresented Talent
Transcript
- Lucas: Luna, I want to talk about a program that I think is quietly one of the most effective retention tools for underrepresented talent that I've seen in a while. It's an internal mobility program at a Fortune 500 retailer — let's call them 'National Retail Co.' — and they designed it specifically to address the fact that Black and Latino professionals were leaving at much higher rates than their white peers. Luna: So not just a generic 'we encourage internal moves' policy, but something with real structure behind it. Lucas: Exactly. A lot of companies claim to support internal mobility, but when you look under the hood, it's often just a job board and a vague mandate. National Retail Co. realized that wasn't enough. They had data showing that, among their salaried employees, Black and Latino talent had a 35% higher voluntary turnover rate than white employees over a three-year period. Luna: Ouch. And that's after they'd already invested in recruiting and onboarding. Lucas: Right. So they defined the problem: it wasn't that people were unhappy with pay or benefits—those were comparable. The exit interviews consistently pointed to a lack of career growth. People felt stuck. They'd hit a ceiling after two or three years and didn't see a path forward. Luna: And that's where internal mobility comes in as the solution. Lucas: Yes, but they didn't just throw up a portal. They built a talent marketplace that did three specific things. First, it proactively matched employees to open roles based on skills and interests they'd entered into their profile—not just their current job title. Second, it required hiring managers to at least interview any internal candidate who met 70% of the qualifications. And third—this is the part that I think is most interesting—they changed the incentive structure for managers whose employees moved to other teams. Luna: What do you mean, changed the incentive? Lucas: Historically, managers had zero incentive to let a good employee move. If you're a strong performer, your manager wants to keep you. So internal mobility was actually discouraged, even if the company said it was encouraged. National Retail Co. started crediting the releasing manager's department with a portion of the employee's salary for six months after the move—basically, a budget credit to hire a replacement or redistribute work. And they added a metric in the manager's annual review for how many people they'd helped move. Luna: Wow. So they made it a positive for the manager to be a talent exporter. That's a complete flip of the usual dynamic. Lucas: Exactly. And the results are pretty compelling. After two years, the retention rate among Black and Latino employees who had made an internal move was 92%, compared to 66% for those who hadn't moved. That's a 26 percentage point gap. And the promoted employees from underrepresented groups were 40% more likely to stay than similar external hires brought in at the same level. Luna: So the program not only kept people, but it also built a more senior pipeline from within. That's the dream, right? Lucas: It is. But I don't want to oversell it. There were challenges. One that came up a lot was that some managers, especially in high-pressure departments, still found ways to block moves by claiming the employee was 'too critical' to let go. The policy said you had to release them if they met the criteria, but in practice, some managers dragged their feet or made it uncomfortable. Luna: So how did they address that? Did they create an escalation path? Lucas: They did. They set up an internal mobility committee that employees could appeal to if they felt their manager was blocking them unreasonably. And they published the committee's decisions anonymously as case studies so everyone could see how the process worked. That transparency helped build trust. Luna: Let's talk about the financial side for a second. Did they actually save money compared to hiring externally? Lucas: Yes, and the numbers are pretty concrete. National Retail Co. calculated that the average cost of an external hire for a salaried position was about $15,000 when you factor in recruiting fees, onboarding, and lost productivity. An internal move cost roughly $3,000—mostly training and transition time. Over two years, they estimated they saved about $8 million across the roughly 700 internal moves that involved underrepresented employees. Luna: So it's not just a feel-good initiative; it actually pencils out. Lucas: Completely. And I think that's why this program survived budget reviews. The CFO could see the ROI. But I also want to highlight something else: they didn't just rely on the marketplace. They paired it with a mentorship program specifically for internal mobility. Employees from underrepresented groups were matched with mentors two levels above them who had successfully navigated internal moves themselves. Luna: Makes sense. If you've never seen anyone who looks like you move from store operations to corporate strategy, you might not even know it's possible. Lucas: Exactly. The mentors didn't just give advice; they helped mentees identify which skills to highlight in their profiles, how to network with hiring managers, and how to craft a narrative about their experience that didn't just rely on their current role title. And they tracked outcomes—mentored employees were 50% more likely to apply for an internal role within six months. Luna: That's a huge nudge. And a good example of how structural and interpersonal support work together. Lucas: Before we go deeper into the specifics of the mentorship pairing, I want to mention something that keeps this show going. If you've found these episodes useful for thinking about your own career or your company's policies, and you'd like to support us, you can do that at buy me a coffee dot com slash fexingo. That's buy me a coffee dot com slash fexingo. Every bit helps us stay ad-free and focused on the stories that matter. Luna: Yeah, even a small contribution makes a difference. And we really appreciate it. Lucas: Now, back to the mentorship program. The interesting design choice there was that they didn't just randomly assign mentors. They used a matching algorithm that considered the mentee's stated career interests, the mentor's network within the company, and the mentor's own mobility history. Luna: So a mentor who had moved from finance to supply chain would be paired with someone who wanted to do something similar. Lucas: Exactly. And they also matched for race and ethnicity when possible, because the data showed that mentees felt more comfortable being candid about their concerns with a mentor who shared a similar background. Not always—sometimes a cross-race mentor was the better fit based on career path—but they prioritized it. Luna: Did they measure whether that made a difference in outcomes? Lucas: They did. Same-race mentorship pairs had a slightly higher rate of internal applications within the first three months—about 10% higher—but no significant difference in actual promotion rates after a year. So the comfort factor helped with initial engagement, but the quality of the mentorship mattered more for the long-term result. Luna: That's nuanced. It suggests you don't have to worry too much about matching perfectly on demographics as long as the mentor is genuinely invested. Lucas: Right. And they trained mentors specifically on how to support mentees from underrepresented groups. The training covered things like understanding stereotype threat, how to give honest feedback without triggering imposter syndrome, and how to advocate for a mentee in rooms they weren't in. Luna: So it wasn't just 'be a good mentor' in the abstract. Lucas: No. It was very concrete. And I think that's the overall lesson from National Retail Co.'s approach. They didn't assume good intentions would carry the day. They built systems—the marketplace, the manager incentives, the escalation committee, the mentorship training—and they measured everything. Luna: What's one thing they would do differently if they started over? Lucas: According to the program leads, they would have started with a longer runway for manager communication. Some managers felt blindsided by the new metrics around releasing talent. They thought it meant they were being punished for retaining good people. It took a full year of town halls and one-on-ones to shift that perception. Luna: So the change management piece is almost as important as the policy design. Lucas: Exactly. You can have the best program in the world, but if managers don't understand why it benefits them, they'll resist. And in this case, the benefit was real: departments that released employees actually saw higher overall retention because the remaining team members saw that mobility was possible. It created a culture of growth. Luna: That's a great point. It becomes a virtuous cycle. Lucas: Yeah. And I think that's the takeaway for any company listening. If you want to retain underrepresented talent, you have to make the path visible and the barriers low. National Retail Co. showed that it's not magic—it's intentional design. Luna: And it pays for itself. I'd love to see more companies follow this model. Lucas: Agreed. We'll keep tracking it. Next episode, we're looking at a company that redesigned its performance review system to reduce bias. That should be interesting.