How organisations can upskill internal talent to fill critical gaps

According to recent research by The Adecco Group on the Australian workplace,¹ talent scarcity is the most significant concern faced by Australian employers.²

It’s not surprising – Australia is experiencing a very tight labour market, with national unemployment at a low 4.0% as at December 2024.³ The Australian labour shortage is particularly acute in some skillsets, sectors and geographies.

Given the pressure shows no sign of easing, organisations need to seriously consider upskilling employees to fill the most critical gaps. Many Australian workers (54%) already invest their own time outside of work in upskilling (figure 1).

In fact, of the 17% of workers planning to leave their current employer in the next 12 months (figure 2), 29% are doing so because of a lack of career progression with their current employer. Lack of career development (21%) and the desire for better opportunities (18%) also propel job leaving. 

So, despite employer concerns about talent shortage and the desire of workers to step up into new roles, it’s remarkable that Australian employers are actually reducing their investment in career development. Our research revealed a decline of 11% year on year. Fewer employers – 51% versus 67% last year – are undertaking career development planning with their employees. What’s more, skills assessment has declined 10% year on year (figure 3).

When organisations don’t upskill internal talent, they can become increasingly reliant on external hires to fill talent gaps. Yet, this flawed thinking can expose the organisation to these two risks:

• Harm to morale and culture. Internal employees may feel undervalued and become demotivated if they see external candidates being hired for roles they aspired to. Indeed, 77% of Australian workers strongly agree that companies should train, upskill and develop existing employees for different roles across the organisation before hiring externally. Promoting from within can foster loyalty, motivation, and employee retention.
• Risk of overpaying for new talent. Paying more for new hires accelerates pay inequities with existing staff. Since the desire for a better salary is the motivation driving 47% of job leavers (figure 1), if your organisation hires workers whose primary motivation is higher pay, you may see higher turnover as these workers keep searching for higher paying roles. In a tight labour market, this can create a salaries ‘arms race’ where organisations compete for a limited supply of workers.

The alternative: invest in internal talent mobility

Internal talent mobility is a workforce development strategy where organisations draw on existing employees to fill new or emerging roles. This often involves reskilling, upskilling and other learning and development strategies. Organisations that invest in internal hiring and career mobility programs realise stronger financial performance⁴.

What holds organisations back from career mobility? Here are common obstacles – and how to remove them:

• Talent hoarding. For many managers, when a team member moves internally, the effect on them personally is the same as if the team member had exited the organisation. Consequently, many managers discourage their team members from seeking new internal roles. Instead, internal movement should be seen as a success metric and be incentivised by the organisation. To retain employees, managers should be rewarded for having meaningful career development discussions with their team members – becoming active partners in internal mobility. Consider setting specific targets and rewards for developing and exporting talent internally.
• Systemic barriers. Slow and complex approval processes for hiring replacements make it difficult for managers to support internal transfers out of their teams. Instead, if an employee transfers to another role, replacement head count should be auto approved.
• Hard for employees to find and apply for new roles. Many companies do not have a transparent internal job marketplace, making it difficult for employees to apply for new internal roles. Organisations should require hiring managers to use internal job markets and properly assess redeployees before going outside to fill job openings. Consider setting a minimum time requirement before external hiring can be approved.
• No skills-based learning journeys. To bridge the skills gap between an employee’s current capabilities and the requirements of high priority roles, learning journeys need to be defined.
• Extensive interview processes. Often the interview process for internal candidates is as extensive as for external candidates, despite the skills of internal candidates being more readily verifiable. Streamlining the process for internal candidates improves talent mobility and workforce planning.
• Time-in-role and disclosure requirements. When a worker needs to be in a role for a minimum time before considering a transfer, they become more likely to seek a new role outside the organisation. By removing onerous time-in-role requirements, workers have more opportunities to stay in an organisation. Similarly, if workers are required to tell their manager when they want to apply for a new internal role, they will preference external over internal roles. Delaying this requirement to interview stage makes it safer for workers to apply for new internal roles.
• No tracking. Measure your organisation’s internal job movement rate and strive to improve it year on year. Because what gets measured and rewarded is more likely to get done.

To fully embrace and support career mobility, organisations must invest in a degree of strategic workforce planning and map connection points between current skills, priority roles and pathways into them. That way they’ll identify high concentrations of potential source talent and grow that talent into the organisation’s priority roles.

Benefits of career mobility

These are the dividends that can come from a strategic focus on career mobility:

• Cost savings. ELMO’s 2024 HR Industry Benchmark Report stated that “… the cost of hiring is now at an average of $20,000 per hire and around one in seven new recruits leave within their probation period.” ⁵ This presents a compelling argument for upskilling employees so they’re ready to move into vacant roles. ELMO’s report also calls out how crucial internal mobility is.
• Employee engagement and retention. Career mobility programs such as LHH Career Studio help workers make informed decisions, stay motivated, upskill and match their passions and skills with suitable roles. Employees feel valued and supported – and are retained – through professional growth and skills development opportunities.
• Skills development and organisational growth. Investing in career mobility programs allows employees to develop new skills and improve current ones, crucial in a competitive labour market. Organisations can also more effectively align their workforce with their strategic objectives – enhancing performance and driving growth.
• Burnout prevention. Career mobility initiatives can help mitigate worker burnout by offering opportunities for employees to move into positions that better align with their skills and interests. Otherwise workers may struggle through a mismatch with external roles the only other option. Ongoing learning can also help with developing resilience and agility.

Get access to our ‘Career Mobility in Australia: Navigating Talent Scarcity and Skills Shortage' infographic here.

¹ All data in this article is sourced from this report unless otherwise referenced

² As perceived by the employees who work for them

³ ABS, Labour Force, Australia, December 2024, accessed 22 January 2025

⁴ Harvard Business Review, Make Sure Your Company’s Reskilling Efforts Pay Off, 31 July 2021, accessed 12 March 2025

⁵ ELMO Software, 2024 HR Industry Benchmark Report, accessed 23 January 2025

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