Why leaders hold on to talent the organization needs to move

Ingrid Haegele’s research offers a less moralizing way into the problem.

Using personnel records and surveys from a large company, she identifies incentives for managers to retain people when they are accountable for their own team’s performance. Ingrid Haegele, Talent Hoarding in Organizations, American Economic Review (opens in a new tab).

The study concerns one organization. It does not show that every blockage has the same source. Its value lies in demonstrating a verifiable mechanism: developing and releasing talent can hurt the local outcome on which the leader is evaluated.

That cost does not appear only in the team’s workload. It can also affect commitments, continuity, and the leader’s own assessment. When the organization rewards local results without recognizing capability released elsewhere, asking for mobility means requesting behavior that the system discourages.

The article reports that a large share of managers recognize the conflict and links retention with fewer internal applications. The figure should not be extrapolated to every company. It does require organizations to examine incentives before reducing the problem to an individual attitude.

The exchange is unbalanced

A key employee receives an invitation to join a cross-functional project. The corporate priority gains expertise. The person’s original area loses availability from day one, reorganizes its deliverables, and assumes the risk of a future vacancy.

The benefit appears later and on a different dashboard. The cost arrives now and affects the person who must authorize the move.

The organization also loses information. If every move depends on a private negotiation, it never observes the real demand for available capabilities. The internal marketplace displays opportunities, but the blockages change who applies and which paths seem viable.

The effect begins even before a veto. People learn which leaders allow movement and which ones block it. Some stop expressing interest; others seek opportunities outside the formal system. A lack of applications may look like a lack of aspiration when it actually reflects expectations built through earlier experiences.

Indispensability increases resistance

The strongest performers receive the most critical tasks. That concentration increases their value to other teams and makes them harder to release.

The cycle reinforces itself. The person who always resolves the problem has less room to transfer knowledge. The leader has fewer alternatives and finds new reasons to block any departure.

The employee receives a contradictory signal. They are told to grow and collaborate, yet strong performance reduces their opportunities for exposure. Over time, they may conceal their interest or look outside the organization for the mobility they cannot find within it.

Here, mobility connects with When a critical capability depends too heavily on one person. Resolving the dependency does not mean diminishing individual merit. It requires distributing practice, authority, and backup.

A veto can be legitimate and still need a date

The difference lies in the condition. A legitimate veto explains the risk, defines what must change, and sets a time for review. Defensive retention turns urgency into a permanent state.

“They cannot move until there is a replacement” is only a condition if someone has the responsibility, time, and resources to build that replacement. Without that agreement, it functions as a prohibition with no deadline.

Changing incentives changes the conversation

Recognizing leaders who develop transferable talent changes part of the exchange. Measuring coverage, documenting cross-functional contributions, and sharing transition costs also help.

The destination area can fund temporary support or release equivalent capacity. A shared forum can decide when priorities compete. The source area should participate in the plan without retaining an unlimited right to block it.

These measures do not eliminate the tension. They make it manageable and visible.

The agreement needs a minimum set of data. Record the expected duration, the capacity leaving, the operational risk, the available backup, and the expected benefit. Then review which part of the cost was temporary and which part exposed a structural dependency.

The review must consider both sides. The destination must be accountable for the actual use of the capability it receives. The source must show which risk materialized and which coverage it built. Without that reciprocity, cost-sharing becomes an administrative transfer without learning.

A short mobility experience does not require the same treatment as a permanent transfer. The former can share capability and produce learning. The latter requires a transition of responsibilities, decisions, and knowledge. Conflating them creates promises that neither unit can keep.

Internal mobility fails when it depends on the altruism of a leader who will be penalized for allowing it. Sharing transition costs and recognizing the capability created changes the exchange. What remains is to verify whether the new agreement releases talent without transferring an equivalent fragility to the original team.

To extend this reading, see What evidence an internal transition needs to stop being a gamble and A career is not a ladder: how to represent real mobility paths, which develop complementary dimensions of the problem.