Latest / Hiring & Firing with Fexingo: Recruitment, Performance, and Workforce Decisions / How Quiet Hiring Is Reshaping Workforce Strategy
Transcript
- Lucas: There is a hiring strategy taking hold right now that doesn't look like traditional hiring at all. It's called 'quiet hiring,' and it's basically the opposite of posting a job opening. Luna: Okay, so instead of bringing someone in from outside, you're moving people around internally? That sounds like internal mobility with a new label. Lucas: It is internal mobility, but there is a specific trigger. Quiet hiring happens when a company has a critical skill gap — say, data engineering or product management — and instead of posting a role, they identify an existing employee who has adjacent skills or strong potential and redeploy them into that gap. Sometimes they backfill the old role, sometimes they don't. Luna: So it's less about 'we need a data engineer' and more about 'who on our team could become a data engineer in four weeks?'. Lucas: Exactly. And it's happening more often because the external hiring market is still expensive and slow. In a recent study by a major consulting firm, companies that used internal redeployment filled roles about 40 percent faster than those that went external. Plus, the retention rate for internally hired employees after two years is about 85 percent, compared to around 65 percent for external hires. Luna: That retention number is striking. But the skeptic in me wonders — are you just asking people to do a job they might not be qualified for? Is there a risk of putting square pegs in round holes? Lucas: That is the big risk, and it's why quiet hiring only works if you have a structured process. It's not just 'Hey, you seem smart, try this.' Companies like Microsoft and Adobe have built internal talent marketplaces where employees can flag their interests and skills, and managers can search for candidates within the company. Microsoft calls theirs 'Career Coach.' It's an AI tool that matches employees to internal opportunities based on their current work and learning history. Luna: Right, so there's a system — not just a manager tapping someone on the shoulder. That makes a difference. Lucas: It does. Let me give you a concrete example from a mid-size tech firm I spoke with last month. They had a sudden need for three cloud infrastructure engineers. The external market was brutal — offers were taking eight to ten weeks to close, and candidates were getting multiple counteroffers. Instead of spending months recruiting, they looked internally and found four people in adjacent roles — two in IT support, one in security, one in development — who had cloud certifications or had done cloud projects on the side. They offered each a three-month rotation, full training, and a ten percent salary bump. Luna: And all four took the rotation? Lucas: All four. Three of them successfully transitioned into permanent cloud engineer roles. The company saved an estimated three million dollars in recruiting fees and lost productivity compared to hiring externally. And they didn't lose the fourth person — she went back to her old role with new skills and became a cross-functional resource. Luna: Three million dollars is real money. But I want to zoom out — this seems like it could become a way for companies to avoid giving raises or promotions. 'We'll just redeploy you without a title change.' Is that a legitimate concern? Lucas: It is, and it's why quiet hiring can backfire if it's done cheaply. The key is that the employee has to see a clear benefit — a title change, a raise, or a skill they genuinely want. If it's just 'do more work for the same pay,' you're going to get resentment, not engagement. In the example I gave, the salary bump and the rotation structure made it a career move, not a burden. Luna: So the optics matter. It has to feel like an opportunity, not a workaround. Lucas: Yes. And that's where the manager's role is crucial. If you're a manager and you see a team member with potential, you have to be willing to let them go to a different team. That's hard — you lose a good person, even if the company gains. But companies that are good at quiet hiring have a culture where managers are rewarded for developing talent for the whole organization, not just hoarding it. Luna: And if these conversations have moved your work forward in some small way, listener support is what keeps this show ad-free. If that resonates, you can find us at buy me a coffee dot com slash fexingo. Lucas: Absolutely. Every bit helps us keep digging into these workforce trends without any sponsor pressure. So back to quiet hiring — one of the hidden challenges is identifying latent skills. Most employees have skills their managers don't know about. A customer support rep might have a degree in statistics. A salesperson might have coded in a past life. The companies that do this well have a way to surface those skills. Luna: What does that look like in practice? Do you just ask everyone to fill out a skills inventory? Lucas: That's part of it. But more effective are project-based assessments. At Adobe, they use something called the 'Adobe Talent Exchange' where employees can volunteer for short-term projects outside their normal role. It's like a gig platform inside the company. A marketer might do a two-week data analysis project. If they excel, that data gets flagged for future data roles. It's discovery through doing, not self-reporting. Luna: That also solves the 'I don't know what I don't know' problem. You might think you're good at Excel, but a project reveals you're great at SQL. Lucas: Right. And the data from those projects is incredibly valuable. Companies that use internal talent marketplaces see about 20 percent higher internal mobility rates. That means fewer people leaving, because they see a path to grow without changing companies. Luna: So for a smaller company that can't build a marketplace tool, what's the first step? Lucas: Start with a talent review that goes beyond performance. Ask: What skills does each person have that they're not using? What do they want to learn? Then create one or two cross-functional projects that let people stretch. It doesn't have to be a full rotation. Even a week-long sprint can reveal hidden capability. Luna: And if someone steps up and does well, you have a clear case for a move. If they don't, no harm done. Lucas: Exactly. The low-risk trial is the mechanism. That's what makes quiet hiring different from just promoting someone on a hunch. It's data-driven, even if the data is from a two-week project. Luna: I can see this becoming the norm, especially in a market where external hiring is still expensive. But I do wonder about the employee's career arc. If quiet hiring becomes too common, does it mean fewer promotions into management? Are we just shuffling people laterally? Lucas: That's a fair concern. But in practice, quiet hiring often leads to promotions because the new role is more senior or specialized. And it can also create paths to management that didn't exist. For example, a senior individual contributor who moves into a new function might end up leading a team there. It's not just lateral; it's often a step up, just within a different branch of the company. Luna: So the key is to make sure the career path is clear. If someone moves into a new role, they need to know what advancement looks like there. Lucas: Right. And that's where the company has to invest in career development. Quiet hiring without development is just shuffling deck chairs. But with development, it's a powerful retention tool. One stat I like: employees who move internally are about 3.5 times more likely to be engaged than those who stay in the same role for more than two years. That's from a Gallup study. Luna: Engagement is huge. So quiet hiring might actually address the 'quiet quitting' trend we talked about a few episodes ago. Lucas: It directly addresses it. Quiet quitting often happens when people feel stagnant. If you give them a chance to learn and grow without leaving the company, you re-engage them. That's the whole point. Luna: I want to circle back to that mid-size tech firm. Did they have any issues with the employees who didn't get picked for the rotation? Did anyone feel passed over? Lucas: That's a great question. They did have one person who applied for the rotation and didn't get it. The manager sat down with them, explained why others were chosen — specific technical certifications — and created a development plan to get that certification. That person got it three months later and is now on a shortlist for the next rotation. Transparency is key. Luna: So it's not just about filling the gap; it's about managing the expectations of everyone in the pipeline. Lucas: Exactly. And that's hard to do at scale. But the companies that get it right see it as a continuous process, not a one-off event. They're always looking for who's ready for the next challenge, and they communicate that openly. Luna: I think the key takeaway for me is that quiet hiring requires a mindset shift. Instead of 'we need to hire someone,' it's 'who on our team can grow into this role?' Lucas: That's it exactly. And that shift saves money, improves retention, and builds a more adaptable workforce. It's not a silver bullet — you still need external hiring for truly new skills — but it's a tool that too many companies ignore. Luna: It sounds like the future of hiring might be less about recruiting and more about development. Lucas: I think so. And it's a future we'll see more of as the labor market evolves. For now, the companies that start building their internal talent muscle will have a real advantage.