Former BlackRock HR Head Jeff Smith on Why Internal Mobility Is the Future of Retention

Internal applications climbed 8% year-over-year heading into 2026, according to iCIMS, while internal hires actually edged down 1% over the same period. The data points to a workforce signaling ambition that their employers are failing to catch, and the gap between what workers want and what organizations deliver has rarely been wider.

Gartner projects that roughly one-third of recruiting capacity will shift to internal talent in 2026, driven by rising hiring costs, AI disruption, and persistent skills shortages. Yet most companies still treat internal mobility as an HR side project rather than a retention strategy worth resourcing properly.

Former BlackRock HR head Jeff Smith, who spent more than a decade leading human resources at the global asset manager after senior roles at Time Warner and AOL, has been pressing this point for years. His prescription is structural rather than procedural. "The evolving theme here is the phasing out of traditional linear career paths, static job descriptions, and inflexible structures," he says, "toward more flexible and iterative career journeys that allow people to use their skills and build."

The Bottleneck Between Ambition and Opportunity

iCIMS data shows internal interest is outpacing internal action across most sectors, fueling what analysts have started calling the "job hugging" trend, where employees stay put with current employers while quietly searching for new internal roles. Industry research finds that 65% of organizations post internal positions for all employees to see, yet only a third of job seekers turn to their own organization first when looking for a new role.

The disconnect is structural rather than motivational. Companies have built sophisticated infrastructure to source external candidates while leaving internal candidates to navigate fragmented application processes, manager gatekeeping, and unclear progression criteria. While a worker can apply to a competitor in three clicks, applying for a role two desks away often takes weeks of permission-seeking and informal politics.

Why Linear Career Ladders No Longer Work

The traditional career model assumed a stable map. Employees entered at junior levels, moved up predictable rungs, and reached senior roles through tenure and steady execution, an arrangement that worked when business models held shape for decades.

The stability that ladder thinking depended on has eroded. Skill half-lives have compressed to roughly five years, roles that existed in 2020 have either transformed beyond recognition or disappeared, and new positions emerge faster than promotion criteria can be written for them.

Jeff Smith has pushed organizations to abandon ladder thinking entirely. "This is very hard and takes a lot of experimentation," he acknowledges. The discomfort is part of the point, since companies clinging to linear paths are not preserving order so much as forfeiting talent to organizations willing to redesign progression around skills and interests rather than predetermined sequences.

A 2025 Gartner survey of 919 employees aged 22 to 27 found that Gen Z workers value job mobility more than job security, with implications for retention that are direct and unambiguous. Workforce expectations have shifted, and companies designing careers for an earlier generation are losing the current one.

The Retention Math

The retention numbers favor mobility by wide margins. Research from LinkedIn shows companies with strong internal mobility retain employees nearly twice as long as those without it, with median tenure of 5.4 years compared to 2.9 years, while Deloitte places the gap even wider at 7.4 years versus 4.1.

Workers who move internally are 3.5 times more likely to be engaged than those who stay in the same role, and 73% of employees who made an internal move are still with their company three years later compared to 56% of those who didn't. MIT Sloan research found that lateral career opportunities are more than twice as effective as compensation in predicting whether an employee stays.

Ninety-four percent of employees say they would stay longer at companies investing in their development. The retention case is not theoretical but quantified, repeatable, and increasingly visible to executives reviewing turnover costs.

BlackRock and Time Warner Alum Jeff Smith on Building Iterative Career Journeys

The phrase Smith returns to most often is "iterative." Rather than a fixed track or a published ladder, he describes a series of moves that compound over time, with employees building portfolios of skills, projects, and exposures rather than collecting titles in a predetermined sequence.

His logic ties directly to retention. "Having exceptional leaders and managers is huge for the day-to-day experience and people staying in a company," he notes. Managers who treat their teams as career destinations create stagnation, while those who treat their teams as launchpads create loyalty that compounds across years and roles.

Smith also warns against assuming that hiring well solves the underlying problem on its own. "There needs to be training and cultural support to make sure you don't just hire talent into a static and non-evolving organization," he says, pointing out that even excellent recruitment fails when the organization beneath it cannot move people once they're in the door.

Designing Pathways That Actually Work

Companies serious about internal mobility share several practices that distinguish them from organizations that talk about mobility without producing it:

• Visible opportunity: Every internal role and project is searchable by every employee, with no requirement to seek manager permission before exploring.
• Current skills data: Organizations maintain accurate inventories of what employees actually know how to do, not just what their job descriptions claim.
• Manager incentives: Leaders are rewarded for developing people who move across the organization rather than penalized for losing headcount to other teams.
• Stretch assignments: Short-term projects let employees demonstrate capability in adjacent domains before committing to a full role change.

Phenom research highlights that 62% of organizations plan to expand AI-enabled training, while 90% report leadership capability gaps, signaling both the urgency and the shortfall. Tools alone will not close the gap. Former BlackRock and Time Warner exec Jeff Smith counsels patience with fundamentals: "I think getting the basics right and executing them is far more important before you are innovating."

The advice runs counter to the temptation to purchase talent marketplace software and declare the problem solved. Without clear performance expectations, fair compensation, and managers who treat development as part of the job, marketplace platforms become digital lost-and-founds where postings sit unread, and applications stall in approval queues.

The Stakes for 2026 and Beyond

Organizations that solve internal mobility gain advantages that compound over time. They reduce the cost of external recruitment, keep institutional knowledge inside the company, and build adaptable workforces that can be redeployed as priorities shift rather than rebuilt from outside every quarter.

Companies that don't solve it face the opposite outcomes. Their best people leave for organizations offering clearer paths, leadership pipelines dry up, and their culture quietly signals that growth requires resignation rather than reinvention.

Jeff Smith returns to culture as the connecting tissue. "Culture is everything. It is what you stand for, how you do work, what you are held accountable for and how it feels to be somewhere." A culture that promises growth and delivers static roles communicates dishonesty more loudly than any value statement ever could.

The 2026 talent market rewards organizations willing to redesign careers around how work actually moves rather than how org charts used to draw it. Companies that promote from within, treat lateral moves as legitimate progression, and build infrastructure matching their rhetoric will hold onto the talent their competitors are about to lose.