Advance ’Em to Attract ’Em: How Promotions Influence Applications in Internal Talent Markets

Abstract

Organizations increasingly turn to internal talent markets to facilitate employees’ movement to new jobs within the firm. A key assumption in academic and practitioner accounts of these markets is that they are effective largely because employees are free to apply and be hired into open internal jobs. We draw on the career sponsorship and talent hoarding literatures to question this assumption, highlighting how individual managers facilitate (and hinder) mobility within these markets. We integrate signaling theory to extend this work, positing that signals of managers’ willingness to support subordinates’ advancement shapes which opportunities employees throughout the firm choose to pursue. Specifically, we argue that open jobs reporting to managers who have secured more promotions for their subordinates will be seen as particularly attractive, generating more internal applications. Our analysis of 96,712 internal applications submitted to 9,896 jobs over a five-year period within a large organization reveals that managers whose subordinates are more frequently promoted subsequently attract more, better, and more functionally diverse internal applicants for their open jobs. We complement these results with qualitative evidence from 30 interviews with managers across four organizations. We conclude by discussing the implications of our findings for the broader functioning of internal talent markets.

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