Now You See Me, Now I’m Gone

Technology-enabled remote work and changing work norms are making it easier for people to change roles or employers without uprooting themselves.1 But technology may play another role in employee mobility by making their contributions more visible. Our research shows how increased performance visibility can impact turnover.

Now that organizations are using digital collaboration tools like Slack, Microsoft Teams, Zoom, HubSpot, and Salesforce extensively, individual-level contributions and talents are gaining visibility. These tools don’t just facilitate the work itself; they also capture who does what and how it’s done, giving managers a clearer view of how teams work.2 They also make it easier for remote workers to connect with mentors and others in their organization who can help them grow and advance.

Those recent developments intersect with another trend that’s been around a bit longer: Through online conferences, courses, publications, and online platforms such as LinkedIn and Substack, people can widely share and promote their expertise in many formats — articles, podcasts, videos, newsletters, tutorials, live coaching sessions, virtual presentations, and so on. The content they generate serves as marketing for their employers, but it also builds their professional reputations. And that, too, enhances visibility and mobility — not just for superstars, but for a much larger cohort of workers.

At the time of this writing, quit rates are on the rise.3 This is a critical moment — employers are bleeding talent, yet they don’t know how to address it. They’re keen to understand why people are leaving and to better meet their needs, and that’s wise. However, doing all that requires deeper insight into mobility itself — what constrains it, how visibility unlocks it, and the questions it raises for employers battling attrition. That’s what we’ll discuss here.

Information Asymmetry Constrains Mobility

When organizations lack credible information about individuals’ performance and quality, they struggle to identify good hires. Historically, this hampered candidates’ mobility.4 After all, incumbent employers had the advantage of observing their workers over time, in many different situations. They knew what investments they had made in their workers’ development and whether those paid off. They better understood what outcomes could be directly traced to an employee’s efforts and which successes were driven more by team efforts. And they could mount counteroffer defenses when raiders came knocking.

That clear information advantage meant incumbents could retain strong performers at a lower cost. Strong performers were visible to current employers, but potential employers on the outside couldn’t evaluate those employees’ performance. This reduced the competitive pressure of poachers. Without a way to highlight their own contributions, solid performers might have to settle for lower rewards from their current employer compared with what other companies might offer if they knew that employee’s true value.

As knowledge workers gain access to digital platforms and tools, allowing them to publicly showcase their knowledge, skills, and accomplishments, the information gap between incumbent employers and outsiders could narrow considerably. This could have a particular impact on strong yet previously less visible contributors — the unsung heroes and strong team players who may not be receiving significant recognition internally. The front-runners are often easiest to pick out, since superstars always find a way to readily distinguish themselves. But beyond the front-runners, differentiating quality is more difficult, since individual work quality becomes harder to observe. The work output itself might be difficult to quantify, or it might arise out of a combined team effort. Other circumstances might also affect outcomes, making it even more challenging to evaluate the contributions and performance of individuals. This is particularly true for knowledge workers, where much of the work goes on unobserved within the employees’ heads.

We wondered, what would happen if credible data on worker quality and performance were available for workers other than front-runners, and prospective and incumbent employers had equal access to it?

In theory, this increased visibility would unleash a wave of mobility. It would lower the barriers for less-visible yet valuable performers, who could then advocate for better assignments, roles, learning opportunities, and compensation or move to other workplaces willing to nurture their growth and reward their value. Employers, meanwhile, could use the same performance data to recruit front-runners from the outside, retain their best people, and even shed low performers.

Visibility Unlocks Mobility

We decided to test these predictions, realizing it would be challenging to isolate causes. Strong performers, by definition, generate more impressive results than average, and they are more likely to seek growth through new jobs. Their accomplishments generate attention, and employers focus their recruiting efforts where they’re likeliest to pay off: on those candidates with the most obvious potential and drive. On the other hand, incumbent employers don’t just sit idle, waiting for their best employees to be lured away; they seek to create environments where these high performers can do their best work. Given the attention on star employees, we knew we would need to examine whether increased visibility creates more mobility opportunities for solid performers on the whole or just for the superstars whose value is already widely known.

In order to isolate this visibility effect independent of talent, we needed to go back in time to find a natural experiment that abruptly created visibility for a population of previously invisible performers. Starting in October 1972, Institutional Investor (II) published rankings of the best equity research analysts across sectors. Historically, the rankings were based on an annual poll of more than 3,000 investment officers and money managers from over 500 institutions, who were asked to identify the best analysts in their sector. The top few analysts and runners-up were reported for each sector. Less than 5% of analysts made that cut each year. Another 30% to 40% of all analysts were named by at least one rater.5

While the top analysts and runners-up were published, information about that larger pool of named analysts was initially hidden from view. In 1995, II began selling that data to firms. These rankings gave analysts a way to visibly differentiate themselves in the labor market. As Fred Fraenkel, a former managing director at Lehman Brothers, explained long ago, “Before … you didn’t know who the best analysts were. Analysts were all getting paid an average amount. II had an unbelievable effect. It started knighting people as the experts.”6

What made the II performance data so powerful was that it included qualitative information as well as rankings. After raters entered their evaluations, II asked them to comment on each analyst’s skills in six areas: stock picking, written reports, earnings estimates, industry knowledge, accessibility and responsiveness, and useful and timely calls. II reporters then spent weeks following up with raters to learn more about their selections and opinions; these conversations were summarized and written up to complement the rankings. Results were detailed in over 100 pages of in-depth performance information on analysts. The rankings were closely followed by industry recruiters because they captured many of the skills that were believed to drive performance.

How Performance Ratings Moved a Job Market

We began analyzing analysts’ job moves before and after the disclosures, starting with moves made after 1995, when the data became available for the 40% of analysts who were named by at least one rater. We looked for patterns both overall and within sectors. Over the years, some sectors were added, some were dropped, and others were combined or split. These events allowed us to study what happens when there is a sudden infusion or withdrawal of information in a given sector.

To gauge the impact of increased analyst visibility across sectors, we compared turnover rates for each year, controlling for analyst characteristics that might also affect moves, like years of experience, number of previous moves, and the companies where people worked. As we anticipated, average within-industry turnover rates increased from 10.0% to 22.7% in the years after more performance information became widely available. Industry exit rates also went up, albeit more modestly, from 14.8% to 16.1%, suggesting that increased visibility may have triggered bigger career changes as well.

Results lined up with predictions when sectors underwent structural changes, too. When II started to report on new sectors, it introduced more information on who was a strong performer in that area. Analysts could cover numerous sectors; for every additional sector that had such increases in available performance information, the likelihood of within-industry turnover increased by 2.4 percentage points in the following year. Turnover increased for both the ranked and unranked analysts, indicating that visibility creates new job opportunities for stronger analysts and allows firms to shed weaker performers. When II combined sectors, the reverse occurred, since there were fewer top ranking spots overall. There was no detectible impact on turnover as measured in the year immediately following the combination; this makes sense, since previous ratings were still relatively current. But for analysts covering these sectors, within-industry turnover rates in the years following fell 4.9 percentage points for each additional sector covered. With the passage of time, the old II ratings held less meaning.

Although injections of information about analysts immediately increased turnover, labor markets adjusted quickly to reallocate talent and returned to baseline turnover rates after the first year. When information was withdrawn, turnover declined more gradually.

Digital Presence and New Credentials Increase Visibility

Today, resourceful potential employers have access to richer sources of information beyond a resume and references. Searching the digital presence of potential candidates, employers can find troves of data, including articles written, interviews, podcasts, videos, conference appearances, and social media activity.

Additionally, high-performing candidates can make such markers of their qualifications easier to find by deftly managing their online profiles to increase the likelihood of attracting the attention of potential employers.

In the end, those with differentiating skills increasingly have multiple ways to be discovered, and potential employers are able to search more effectively for what used to be hard-to-find talent. Of course, employers investing in ways to identify talent are poised to capitalize on this.

Additionally, sites that rate performance may also provide differentiating quality signals for customer-facing professionals. For instance, over the past decade, online ratings for physicians have been increasingly influential for people selecting doctors.7 Such rating sites are still primarily focused on patient satisfaction and not yet on comprehensive measures of performance. However, even these reviews can affect selection. Consider law, another professional service: Two-thirds of consumers are more likely to hire lawyers who have online reviews, with millennials even more likely to do so, at over 80%.

Adding to the information available about individuals’ expertise are sources of credentials. For decades, bona fides emerged only from formal educational degree programs and schools or employers with reputable names. Today, providers of targeted training offer searchable badges and certificates attesting to a wide variety of skills and competencies. Employers, eager to gain more access to talent, have recently been stepping away from degree requirements in favor of skills-based hiring, particularly in middle-skill jobs.8 Google launched Career Certificates, a program in IT support, on Coursera in 2018. These courses were designed by practitioners to build and certify real-world skills. Because the certificates are based on passing rigorous tests, not just enrolling in the course, employers can use them as a visible sign of quality. Such quality signals can create new mobility opportunities, especially for the more than half of enrollees who do not have four-year degrees.9 The value of these credentials is not confined to Google employees. The company has built a consortium of over 150 employers using Google career certificates to qualify or upskill their workforces. The certificate program has expanded beyond IT skills to currently include data analytics, project management, user experience design, and digital marketing.10

Opportunity and Threat for Employers

Labor market theory has long conjectured that performance transparency is linked to worker mobility.11 Our findings show that this additional visibility matters. And because our analysis links an increased amount of visible information to higher turnover — in a workforce that doesn’t consist only of superstars — the correlation isn’t merely a side effect of performers at the very top already having more opportunities to move.

Whether we’re talking about the sudden availability of performance ratings or some other quick infusion of credible data on worker quality, such information shocks probably won’t matter as much for A+ workers, whose market value is already widely known. But for undervalued A- and B+ players, they can open new doors. As a result, companies may lose a lot of good people or see a dramatic increase in internal competition for key roles and assignments. And as avenues for showcasing individuals’ talent online continue to proliferate — searchable badges and certificates highlighting their skills and credentials, for instance, and online ratings and reviews touting their capabilities and customer service — we can expect more and more workers to seek out ways to enhance their own visibility.

On the one hand, all of this puts pressure on companies to treat people well, invest in their growth, and reward them fairly. On the other, it lowers the barriers and costs of finding strong performers. So increased worker visibility presents both threats and opportunities for employers. The threats are especially keen for businesses that build their competitive advantage on having the very best people in their field. Those that have managed to attract and develop top talent will find themselves increasingly under siege by poachers. Even if companies hire people for their potential and develop their skills, keeping them will be challenging if their skills are visible and deployable elsewhere. Retaining the best will demand creative strategies that go beyond just compensation.

This means that hiring and grooming strong performers is merely table stakes.

The Ties That Bind

To be a real contender in the labor market, it’s critical to amplify workers’ talents in ways that other companies can’t replicate and connect those talents to the firm. For example, employers can configure teams so that individual performance is entwined with more company-specific characteristics. In his book Chasing Stars: The Myth of Talent and the Portability of Performance, Boris Groysberg describes three types of nonportability: soft, hard, and product-based. Companies that use soft nonportability strategies focus on unique elements of company culture and personnel practices, like recruitment, training, evaluation, motivation, and collaboration norms. When workers adapt to culture-specific behaviors, their performance becomes intertwined with the organization in a way that might not be replicable in different settings.

Cincinnati Children’s Hospital’s culture is deeply rooted in “the science of improvement,” focusing on small-impact problems to achieve sustained gains in a variety of patient outcome measures. The belief is that when small problems are ignored, resourceful employees develop workarounds, thus concealing problems and hard-coding them into common practice. This makes systems fragile and problems harder to detect and fix.

Paying attention to small problems is supported by Cincinnati Children’s culture and beliefs.12 Employees there develop an orientation toward caring about the details and contributing to lasting system improvements that wouldn’t be valued by organizations that prioritize big problems and discourage employees from going too deep into the weeds. In this way, Cincinnati Children’s culture and practices not only make employees more productive but also create a soft barrier for retaining the talent that drives its performance.

Hard nonportability techniques are practices that augment talent through proprietary information systems and platforms. While a superior data system can be a coveted asset in its own right, the additional feature of tying the productivity of strong talent to company-specific assets conveys an added benefit of helping retain employees. Merrill Lynch invested in proprietary information systems for its analysts. These systems were faster, more versatile, and easier to use than the generic systems implemented by competitors. Analysts could customize the system based on specific requirements of their financial models. Later, Merrill enabled the shareability of such models among its analysts across regions and industries. Eventually, these led to custom reports that were available to clients. Analysts invested in learning increasingly nuanced features of the system. Those who left the company quickly discovered that it was harder to perform in other organizations without such systems. Those who stayed at Merrill continued co-specializing with the improving technology, enhancing their productivity.13

Product-based nonportability occurs when employees invest in capabilities that enhance their contributions to a product-specific team but are less applicable when working on other things. In such scenarios, distinct product offerings convey advantages that extend beyond product market leadership; these unique offerings may force employees to commit their knowledge and expertise to the company’s products, making them less attractive to competitors. The more differentiated the product, the deeper the specialization. From cars to mobile phones, complex manufactured goods are generally a combination of proprietary, product-specific technologies and supporting, general-use components. Among carmakers, employees who source and select braking systems from the standard suppliers can take those skills to any automaker. However, engineers who have invested their skills and knowledge in product-specific designs would be less valuable working for a different manufacturer, since their existing platform knowledge is less transferrable.

Notwithstanding these techniques designed to bind talent to companies, strong performers have ways of finding options to realize their potential. Consequently, companies need to prioritize being an employer of choice.

Of course, compensation needs to be competitive. If it is not, it communicates that employees are not valued, leading to intentions to leave. Employers can be creative with rewards, exploring not only salary but other elements, such as signing bonuses, performance-based pay, and benefits such as subsidized child care and stipends for home offices. In addition to providing tangible benefits to employees, such actions demonstrate the intentionality of employers to understand and meet the needs of their workers.

Employers can also take measures to make work more compatible with competing life demands. In a large sample survey of departing U.S.-based workers, providing flexible remote work arrangements was 1.5 times more predictive of retention than compensation; similarly, offering reliable work schedules was 1.2 times more important than pay.14 As companies struggle to strike the right balance between remote and in-person work, involving employees in work design decisions ensures a fuller consideration of their concerns and gives a strong signal that they are valued as individuals.

For employees, the workplace is not just where they go to expend their human capital; it’s also where they build and grow it through their experiences. Company leaders can do more to create a development-focused environment. First, having forward-looking career conversations, not just current-role performance discussions, demonstrates that employers care about growth. Talking about strengths and how to enhance them, and highlighting different roles in the organization where they can be applied, is not easy; it requires leaders to know their teams and to be aware of opportunities across the enterprise.

Second, companies can take steps to make potential internal job moves easier. Employers can allow for experimentation, encouraging employees to try temporary roles and experiences. When workers are encouraged and supported in exploring internal opportunities outside their direct roles, it normalizes the behavior, alleviating the perceived risk of a negative performance review.15 In the same large sample survey discussed above, the existence of lateral career opportunities was 2.5 times more predictive of retention than pay.

Of course, how people are treated matters a great deal. Toxic culture is the lead predictor of attrition, with survey respondents claiming that it is 10.4 times more likely to contribute to a decision to leave compared with compensation.16 Beyond providing adequate pay, valuing employees means listening to their ideas, enabling their development, and communicating appreciation for individual contributions. Making individuals feel special requires that leaders be attentive and genuine in taking notice.17 It has never been easier for strong talent to become visible to competing employers. Rather than counting on secrecy to retain performers, companies need to raise their game in both embracing new sources of information and in how they approach retaining the best and brightest.