3 days ago
Why Lateral Career Moves Still Feel Risky—And What Leaders Can Do
Career growth inside companies still follows a narrow script—progress often defined by vertical movement alone.
Lateral career moves—shifts across functions, divisions or geographies—rarely carry the same weight as upward ones, even when they build more range. That perception keeps many employees from considering them, even when the move might offer the most learning and the broadest exposure.
Gallup's Q4 2024 research reveals the gap: while nearly 70% of employees are looking for a new role within their organization, only 28% would consider a lateral one. Those who do make such moves report lower clarity, less alignment with their strengths and less frequent recognition. The long-term benefits are real, but the short-term experience is often discouraging.
To understand the deeper dynamics at play, I spoke with Michael Waldman, professor of management and economics at Cornell University, and Matthew Bidwell, professor of management at Wharton.
Both have studied internal labor markets, mobility and career progression for years. Their research underscores a simple but often missed truth: access isn't enough. Without clarity, support and cultural reinforcement, even the best-designed mobility programs stall.
Why Talent Marketplaces Alone Aren't Enough
Internal talent marketplaces promised a new era—matching employees to opportunities in real time, breaking down silos and reducing reliance on personal networks. But the reality is more complicated.
Waldman explained why: 'The manager doesn't want to lose their better worker because that hurts their bonus—and firms don't usually give bonuses for workers who are promoted out of your division and do well. If they did, it could change those incentives.'
He also pointed to the signaling challenge. 'Promotions signal ability. Giving someone more responsibility without a title change doesn't send a clear signal to others that they've developed.'
Bidwell added, 'Managers aren't rewarded for being net contributors to the broader company. They're rewarded for getting their team's work done, not for releasing talent into the system.'
And yet, Waldman's research shows a clear upside: workers who are laterally moved are more likely to be promoted and experience greater wage growth over time. The path exists, but too few are supported to take it.
'Most lateral moves still happen through informal networks,' Bidwell said. 'If that's the only route, a lot of people get missed.'
The Ladder Reflex
In most leadership conversations I've been part of, career development still starts with a vertical frame. Talent reviews focus on 'next steps,' usually defined as the next level up. Growth is still most often defined as moving upward.
I've watched org charts become templates for potential. Candidates plotted, 'ready now' or 'ready soon' labels attached, and the expectation set: wait your turn, move higher.
But the best organizations interrupt this pattern. They begin talent reviews by asking who moved across the business. They look for transitions that added capability across functions, not just within them.
Some lateral moves come with more responsibility but no support—what Dr. Laurence J. Peter called pseudo-promotions. They keep talent in the company but do little to help them grow. Waldman points out that without context, new teams often don't know what an internal hire brings, forcing them to prove themselves all over again.
And in a world where AI is reshaping roles, skills and teams, clinging to vertical models only narrows future options.
Consider Priya, a high-performing marketing lead who transitioned into product strategy. The move looked smart on paper. In practice, there was no onboarding, unclear expectations and no acknowledgment of her prior success. Six months in, she was gaining traction—but the rough start left her questioning whether her company truly supported internal mobility or just talked about it.
Priya's experience reflects a broader issue: lateral moves are often treated as individual experiments rather than shared commitments.
Now take David, a finance manager who moved into operations. His company had built a clear internal mobility system: a regularly updated skills inventory, a dedicated career advisor and a playbook for onboarding internal hires. His first month was structured around learning, with clear milestones reviewed by both his former and current managers. A year later, he'd led a cost-reduction initiative that drew on both his finance background and new operational insights. That move positioned him for an executive role the following year.
David's success wasn't just about his ability. It was shaped by the system around him.
What Great Companies Do
Making lateral moves work requires more than a platform. It takes visibility, structural support and shared accountability. As Waldman noted, 'There are lots of things firms can do to avoid talent hoarding, but those things are costly—so sometimes they don't happen.'
Bidwell emphasized that preparation matters just as much as the move itself: 'Often a lot of the process happens before the move—building skills, offering short‑term opportunities to prepare someone for the shift.'
He also pointed to what kind of lateral moves tend to matter most: 'People who seemed to be benefiting were the ones moving to a different function. Getting broader functional experience, learning more about how the business operates—that was more valuable than doing the same thing somewhere else.'
So what does it take? Here are six strategies to help lateral career movement become a growth engine, not a sideline.
Six Ways to Make Lateral Moves Work
Share stories of lateral moves in company updates—not as policy footnotes but as real growth journeys. Celebrate them with the same energy as promotions. They signal momentum.
Internal movers need a reintroduction. That means a thoughtful onboarding plan, context around their past wins and the same level of support you'd give an external hire.
Don't just show vertical paths. Highlight real examples of lateral steps that unlocked broader roles later. Show that sideways can lead forward.
Reward leaders who grow and release talent. During talent reviews, ask: who developed across the business this year? What enabled those moves?
Create roles or programs that help employees explore new functions, assess transferable skills and prepare for moves. Layer in learning pathways built specifically for internal transitions.
Make it part of the culture—not just the scorecard—to celebrate leaders known for developing and moving talent. And track who never does. Hoarding is a systems issue, not just a personal one.
Building A System Around The Lateral Move
When lateral career moves are overlooked or unsupported, companies don't just stall talent. They stall possibility. Innovation slows. Succession pipelines shrink. Employees grow disengaged when the only visible path doesn't match their skills.
Lateral movement shouldn't be a gamble or a test of perseverance. It should be one of the ways organizations build range, depth and future leadership.
As Bidwell put it, 'If talent mobility is invisible, it doesn't feel like a real option to the employee or the manager.'
Movement alone doesn't shape careers. It's what surrounds the move—support, visibility, and context—that defines its impact.
