Even as businesses achieve efficiencies by automating much of the entry-level work historically done by recent graduates, many are finding it harder to secure experienced workers to do the jobs AI cannot, leaving top candidates with plenty of leverage to say no to offers. Organizations are wasting untold levels of time, money, and effort to bring much-needed skills into their business. Such a challenge requires a new way of thinking. 

One company with an alternative is Spotify. Although the Swedish streaming giant hit headlines in 2023 for laying off 17% of its staff, it has since recovered much of that lost ground. Performance is strong: Its most recent results, from Q1 2026, show the number of monthly active users climbed 12% year on year to 761 million, and quarterly revenue has increased by 14% to €4.5 billion. One can also read a lot into Spotify’s attrition rate, which hovers between 4% and 6%, compared with the estimated global average of 20%. 

The key to this success, says CHRO Anna Lundström, is helping talent grow within the business. “For years we were in hypergrowth—and we’re still hiring quite a bit,” she says. “But we have also shifted to be really, really good at internal mobility.” 

This is not mere lip service; Spotify has moved from filling 20% of open jobs with internal talent to over 40% in 2025, with plans to increase this even more in the future. 

For Lundström, not only is this an opportunity to cut the cost and time it takes to hire externally, it is also a critical retention tool for top performers. “When employees leave the company, one of the main reasons they give is, ‘I wasn’t able to grow and develop,’ ” she says. This new strategy aims to tackle that. 

Although Spotify had a raft of internal training options for staff, it was clear that these alone were not enough. So the organization launched an internal talent marketplace—Lundström describes it as Spotify’s own version of LinkedIn—called Echo. 

Here, employees can upload profiles describing their experience and skills and be matched with internal opportunities. To further incentivize the use of Echo, Lundström’s team introduced a policy that hiring managers must advertise open roles internally for several weeks before turning their gaze outward.

Such a reframing requires system design change, not mere platitudes, and “the numbers show that it’s really working,” says Lundström. For large organizations, the lesson is clear: Internal mobility does not scale through policy alone—it requires infrastructure, visibility, and incentives. 

Of course, there will be instances where the very specific skills for a particular role cannot be found in the current talent base. But here, too, Spotify is embracing a new approach: what Lundström terms “precision hiring.” 

Many may have heard the expression “Culture eats strategy for breakfast,” but some HR leaders are moving away from the notion of “culture fit,” as evidence shows it can entrench systemic bias and homogenize the workplace. 

Instead, Lundström and her team interview particularly for “culture-add”—candidates who will bring their own points of view and personalities to Spotify while still embracing what matters to the brand. 

“We do an interview which is tied to our core values to ensure that you are going to be a great asset to us as a ‘culture carrier,’ ” says Lundström. “It’s harder to ask these questions than to just check whether someone can code or not,” she acknowledges. “But our talent acquisition team is extremely well trained in this.” 

For this reason, Spotify also relies almost entirely on its own internal teams to acquire new talent. “Who is better to assess whether someone would be a good fit for Spotify than our own people?” she says. “That’s a big part of our secret sauce that other companies may miss out on if they work with external vendors.” 

Another ingredient of Spotify’s secret sauce is flat hierarchy, which Lundström describes as “a very Swedish leadership style.” There are fewer layers of management than might be common in a similar-size organization, which helps bring leaders closer to the wider workforce, creating a culture of trust. As a result, says Lundström, “we are really good at managing polarities.” 

What she means by that, she explains, is that Spotify’s leaders are skilled at maintaining multiple competing priorities at once. The most important example currently revolves around the need to upskill workers on AI. “We’re asking them to learn even faster, to embrace AI and move quickly, and we can do that because we are also really homing in on their well-being.” 

Spotify’s work-from-anywhere program has been widely covered, and Lundström says it has been successful in improving retention and building strong levels of trust. The organization has also run an annual Wellness Week for the past five years, where the entire company shuts down for a week to allow employees to recharge and focus on their mental health. 

For Lundström, this balance is imperative: “If you over-index on tools without strong, supportive leadership, you’re going to lose trust. But if you try to keep protecting culture without evolving AI, you’re going to lose relevance. You have to do both.” 

In spite of the demonstrated success Spotify is having with its new talent and leadership strategies, Lundström is keen to stress one thing: It would be an error to simply copy what the brand is doing. 

“The mistake many companies make is looking at other organizations and trying to mirror something that is not them,” she says. “You need to have a story that you stay true to. The best employer brand is when you and your employees are saying the same thing.” 

Accordingly, her advice for overhauling your talent strategy is to create a set of foundations to build on authentically, borrowing what is useful from companies you admire and discarding the rest. 

Spotify’s approach is not a blueprint to be copied, but it points to a broader shift in the talent landscape. As external hiring becomes less reliable, the ability to move and develop people internally will become essential. The fundamental question, therefore, is, “How easily can talent move around my organization today?” For many, the answer remains: “Not easily enough.” 

This article appears in the June/July 2026: Europe issue of Fortune with the headline “Spotify’s secret to winning the hiring war? Keep talent moving and growing.”