HR leaders must shift from managing headcount to proactively safeguarding talent investments by strategically deploying internal mobility, leveraging AI to create meaningful work, and timing growth opportunities based on employee tenure.
Maria Valero
Editorial Strategist, HR
Workday
Voluntary attrition is consistently low, but one exception is keeping talent leaders up at night: 75% of industries are seeing an uptick in turnover among high-potential employees. That’s according to recent Workday research.
The great resignation has become a luxury that only high-potential employees can afford.
While many workers feel stuck amid economic uncertainty and layoffs, high-potential employees—the cohort that are most capable of moving—are in fact doing so. This is signaling a profound risk to organizations, where the most capable workers are making growth moves as hiring freezes thaw.
When high performing talent walks out the door, their organizational knowledge and any investments made in their development, training, and skills walk out with them. Data shows that companies consistently fail to replenish this capital internally, with the number of internal hires stagnating over the past year. This leads to a two-fold threat when it comes to HR’s impact: declining retention and the increasing cost to replace talent with new high-potential employees.
To combat this threat, HR must shift its focus from merely managing headcount to proactively safeguarding the investment in existing top talent before the cost of replacement is incurred.
75% of industries are seeing an uptick in turnover among high-potential employees.
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To protect talent investments from sinking and affecting performance metrics, HR teams must first understand how employee needs change over time. The fundamental requirements for engagement remain fair compensation, growth opportunities, and clearly defined goals. However, the urgency of these drivers shifts with tenure.
For new hires, compensation is not even among the top five drivers of loyalty in the first three to six months of employment. Instead, early loyalty hinges on organizational fit and clear strategy. Compensation, alongside growth and strategy, becomes increasingly important the longer an employee stays. This granular understanding allows HR to time its investments precisely, avoiding overspending in the initial phase of employment when laying the cultural groundwork that fosters long-term commitment is paramount.
The ultimate retention driver, however, is a deeper emotional investment in meaningful work. Workers who find their work meaningful feel 37% more accomplished than those who don't.
This sense of accomplishment makes people more resilient in the face of challenging workloads. Even when employees describe their workloads as unmanageable, those who found their work meaningful scored 7 out of 10 on accomplishment—far higher than the 5 out of 10 reported by those with manageable but less meaningful work.
In other words, as meaning increases, employees' ability to withstand challenges also increases.
Meaningful work used to be anecdotal, but now we can view it as a protection layer for ROI—and a measurable strategy. We can offload tasks that used to take up brain power and distract us from fulfilling aspects of our jobs to agentic AI tools.
This creates a huge opportunity for HR to position AI agents as a copilot to their workforces. With agents, employees have more control and capacity. They’re able to shape their experience at work, taking ownership over how much of their day brings them joy.
As meaning increases, employees' ability to withstand challenges also increases.
While some organizations look at AI as a tool to trim headcount, forward-thinking organizations are finding ways to elevate their existing workforce and multiply their impact. Some organizations may question how AI-ready their workforce is, and they seem to be primed—but with a caveat. 75% of respondents are comfortable working alongside AI agents, but only 30% are comfortable being managed by one.
While exciting, it’s critical to ensure your organization is setting clear expectations on the roles and responsibilities of an agent. AI agents are co-pilots, not captains.
If high-potential employees are the engine for innovation, then internal mobility is certainly the fuel. Internal candidates who transition into new roles are 80% more likely to be rated a "top performer" compared to external hires.
All of the organizational knowledge, system set-up, and relationships needed to perform? Retained. The investment in that employee's learning and development? Now it’s being used to benefit two different roles, multiplying impact and boosting employee experiences.
Internal mobility leads directly to increased employee engagement and retention (cited by 35% of respondents) and contributes to higher productivity (34%) and significant cost savings (29%).
This quantifiable performance boost demonstrates the direct value protected by prioritizing internal movement. Despite these measurable benefits, most industries are seeing the percentage of internal hires down from the same period last year. This stagnation, coupled with increasing employee tenure overall, suggests that companies may soon regret not prioritizing their internal mobility efforts.
If high-potential employees are the engine for innovation, then internal mobility is certainly the fuel.
The slight loosening of the labor market hands employers a competitive advantage in hiring, but it simultaneously forces them to compete harder for their own retention of high potential workers. This proves a valuable lesson: When you retain employees, you retain your investments in talent.
To rewrite the employer-worker contract and safeguard from talent leaks, HR leaders must execute a synchronized investment strategy:
Use data-driven intervention: Use people analytics to identify the 2-to-4-year tenure window and proactively offer growth opportunities (internal moves, stretch assignments) to high-potentials during this high-impact period.
Incorporate a meaning audit and automation: Implement collaborative job audits to identify and eliminate or automate low-value, repetitive tasks using AI, thereby raising the proportion of meaningful work for every employee.
Automate flexibility for compliance: Leverage the human resources information system (HRIS) to automate the complexities of hybrid models, ensuring compliance while guaranteeing that flexibility translates to improved well-being and productivity.
Elevate internal mobility with AI: Ensure the internal mobility process is transparent, easy to navigate and supported by AI tools for career pathing, reducing manual friction and increasing the velocity of internal hiring.
When you retain employees, you retain your investments in talent.
After a period of corrections and overcorrections, the market is collectively searching for a stable center where businesses can achieve productivity and workers can excel, even under heavy workloads.
By focusing on internal mobility to grow your existing workforce and timing retention programs to meet employee needs by tenure, organizations can mitigate the painful loss of high-potential employees.
The key for HR is to strategically deploy AI agents to handle routine tasks, effectively turning technology into a shield that protects human capital and amplifies human ingenuity. The challenge is no longer the mass exit of the great resignation, but the quiet—and costly—departure of the high performers. The failure to invest in their growth and meaning is the greatest strategic risk.
Organizations that embrace this reality, turning internal talent development and protection into a strategic advantage, will not just stabilize their workforces but will cultivate a more resilient and adaptable team.
Internal hiring is down 8% year over year, with 10 of 11 industries reporting a decline in internal promotions. Learn why high performers are walking out the door, with insights from 1,700 respondents.
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