Making the Invisible Hand Visible: Managers and The Allocation of Workers to Jobs | Quarterly Journal of Economics

Talent Management
Tags:

You can also read this along with other resources in issue 360 of my Talent Edge Weekly newsletter. 

I am looking forward to attending the 2026 HR Tech Conference in October, where I will get a firsthand look at where HR technology, including internal mobility (IM) platforms, is headed next. But as I have shared many times, while technology is a critical enabler of IM, many non-technological factors also determine its impact. One example is organizational practices and guidelines that can unintentionally get in the way of talent movement, which I cover in my one-page diagnostic. Another underleveraged factor is the manager. A recent Quarterly Journal of Economics study of 200,000+ white-collar workers and 30,000 managers over 11 years reinforces this point. Seven years after gaining a high-flyer manager (defined as reaching the first management level by age 30), employees’ lateral moves were 40% higher, including moves into different types of work and functions. Pay was also 13% higher, with 64% of the higher salary explained by lateral job changes. The organizational benefit went beyond mobility: these managers also increased employee sales productivity. What is most interesting is what these managers actually did to support IM: they spent more time in one-on-ones, provided structured feedback, created opportunities aligned with employees’ skills and aspirations, and encouraged employees to explore new roles, teams, and projects. As your organization invests in IM technology, is it making the same investment in the manager behaviors that enable mobility to actually happen?