Rise of the Internal Talent Marketplace
Rise of the Internal Talent Marketplace
Jeff, CEO of an ancillary manufacturing company, just met a prospective candidate for the COO position who has extensive experience in expanding businesses and operations. He is well known, has substantial experience and probably will do a great job. There is also an existing employee in the organization who is equally capable and has grown in the company from the past 17 years. He has a strong internal network and is instrumental in expanding many of the existing projects.
He nudges the CHRO of the company, Mary to look at employee data and check for high performers who are disengaged and looking for new opportunities. He wants to meet them all. After all, it is her responsibility to keep the costs in check for new hires in terms of their onboarding, training and benefits.
They jointly discover that employee turnover is high, and the per employee expenses is negatively impacting the organization’s morale, performance and productivity maintenance. They struggle to understand if these disengaged employees actually look at the open positions on the organization dashboard, before they move to a lucrative profile elsewhere.
The situation is real and leaves many CHROs like Mary wondering – is there a way via which they could let demand for talent, meet the supply of internal talent who is willing to continuously re-invent and move across different roles. Is this Internal Talent Marketplace a dream, or something that would take their business to levels that they could not imagine?
A strong motivation for change, especially among younger employees, is an ongoing desire for new experiences and challenges that support their learning and development. The bigger challenge is that it is easier for an employee to find a job outside the company than inside the company. Approvals from current managers, knowing about what a possible job really is, convincing another person about how one is the right fit, is not easy.
HR processes behind it, facilitating the move are also tough. Continuous hiring from outside also happens in parallel, where HR is unaware of the talent brewing inside. A perfect case of supply meeting demand, and a marketplace of sorts is born. An internal TALENT marketplace, of course.
How does an Internal Talent Marketplace find its relevance?
ITM is like a parallel talent economy running inside the organization which when tapped and utilized can be valuable but if left unattended can cripple the organization. The relevance of Internal Marketplace is emphasized by data published by SHRM which predicts that every time a business replaces an employee, it costs 6 to 9 months’ salary on average.
But costs are not the sole driving force for companies to look inwards when it comes to hiring. Retention of a positive and motivated employee is very important for the organization’s success as well.
Some of the advantages of an internal talent marketplace are:
- Background check is not required as all the details are there with the company.
- No time is lost on onboarding and the training/ work related to the new role can immediately start.
- There is faster scalability at a new role as the hire already has strong contextual knowledge of how things are done and can network well to get the work done.
How can an internal talent marketplace be implemented?
To make Internal Talent Marketplace a success, change must happen at different levels in the organization. Technology is a big enabler to implement these changes. Leveraging internal talent needs a cohesive ecosystem of skills repository, Learning Management Systems (LMS) and Performance Management System (PMS). These systems should be automated to get the feed from one another and give recommendations about the available opportunities and the talent interested to take up these. For instance:
Performance Management Systems must move away from traditional way of capturing performance information. Studies on attrition show that career development tops the list (22%). When an employee sees a progressive path and knows what it takes to get to the next level, there is more chance of employee retention than a capable employee looking outward for career growth.
Goal setting is a big part of performance measurement. When individual goals are linked to business objectives employees will be more effective as they can see how their goals fit into the big picture. With continuous performance management the aspirational goals of the employee, inclination to move to other functions or just do more can be recorded.
Linking aspirational goals to a central Learning Management System, and further recommending relevant training to accomplish those goals is crucial. Once done, make sure the skill inventory is updated and that completes the talent finding loop.
Also, Application Tracking Systems (ATS) are innovating in a big way to attract talent. Organizations should thus leverage the ATS and use it to explore the Internal Talent Marketplace. These systems help perform multiple functions such as – helping recruiters automate recruiting processes, recommend employees tools and training required to reach their career goals; capture information for mobility requests from an employee; connect the platform to the skills repository to get recommendations and automate mailers and enable the talent acquisition team to reach out to the recommended employees; help managers identify and create flexible, targeted short-term opportunities based on skills, grade, location, etc.
How do we know whether an Internal Marketplace is right for us?
The Internal Talent Marketplace has many advantages and comes with its share of own difficulties. The deciding factor for an organization is when it is faced with different disruptions taking place in markets, and needs to decide whether an external candidate would help in innovating and take the company to levels that no one internally has experienced internally.
Also, a company should look outward when a specific skill is needed immediately that is not readily available within the organization and this skill may incur significant training/ upskilling costs.
In highly evolved organizations where succession planning and performance reviews happen regularly, and transparency of hiring practices is the norm, looking to internal candidates first is natural. Cultivating an internal talent pool builds employee loyalty and increases engagement. Also, if you find that maintaining recruiting buffer capacity too expensive for your business, then an internal talent marketplace could help ease the strain.
Organizations need to strike balance between these tough but important decisions and make the choice.
What do you think – will an internal talent marketplace work for you? Do let us know in your comments below or drop us a line at email@example.com