What happens to an organization when employees transfer between jobs internally? Does it matter whether a single worker transfers or if a team of employees is “lifted and shifted” together?

Caitlin Ray, assistant professor in the ILR School’s Human Resource Studies Department, has researched whether, when and why internal mobility is good or bad for a unit or organization.

“There hasn’t been a lot of examinations of internal mobility at the collective level … this thing that we think is not complicated is actually very complicated and has all sorts of implications – not just to individuals, but to the organization as a whole,” said Ray, first author of “On the Move: The Impact of Internal Mobility and Internal Comobility on Unit- and Organization-Level Outcomes,” published Aug. 4 by Academy of Management Journal.

Co-authors are Mark Maltarich, associate professor at the University of South Carolina, and Greg Reilly, professor of management at the University of Connecticut. 

“HR professionals are constantly faced with these decisions,” Ray said. “They may be wondering if these people come as a group that’s already proven they can work together, should they lift and shift them?”

Ray examined data over a three-year period from a Fortune 500 firm with more than 1,200 retail stores. About three-quarters of the stores were already established; the others opened during that time. The data came from sales associates, assistant managers, and general managers.

The research framework was based on human capital resources theory, which posits that “human capital” – knowledge, skills and abilities – accumulate within a worker, as does “firm-specific human capital,” which is valuable only within a specific company. The researchers considered the flow of human capital created by an internal transfer: One unit loses human capital and another unit gains it. To quantify the effect of a transfer, the researchers examined unit size and unit sales in a multi-month period following the transfer.

Transfers of one worker to one team turned out to benefit the firm overall, as did transfers of multiple employees from multiple units to one team. The losses in productivity experienced by the previous teams were outweighed by the gains in the receiving teams.

However, when multiple employees transferred from the same unit together, called a “comobile transfer,” there was no net benefit: The “unit-specific capital” that helped them work well together made it more difficult for them to learn workplace norms in their new unit. Also, they brought less unit-based diversity than if they had come from separate units.

Ray said managers should keep in mind that it’s valuable to source internal transfers of workers from as many other teams or units as possible, adding that with comobile transfers, managers should intentionally provide onboarding activities to help them build relationships within the new team.

As for individuals transferring internally, Ray said they should be aware of the importance of relationship-building in the new position, in order to adjust to changes in the workplace culture.

“We all know the emotional meaning of being promoted or demoted, but we don’t always know what to make of lateral moves,” Ray said. “Any demystification of internal mobility helps us build a better understanding of why it happens to us as workers, as well as the implications for the organizations that we work for.”

Tonya Engst is a writer for the ILR School.