Build an Internal Talent Marketplace to Empower Workers, Reduce Turnover

By focusing on developing knowledge and promoting from within their ranks, companies can create a culture of investment in their people. But the benefits aren’t just limited to higher job satisfaction and retention rates. An internal talent marketplace (ITM) can boost an organization’s brand as well. By breaking down larger training programs into more manageable segments, companies can take advantage of shorter, more responsive forecasts to get the most out of their workforce’s potential.

Traditional approaches can leave workers wasting their talent on jobs that are a poor fit, that require extra training or that they simply don’t like. ITMs turn those models upside down.

“It’s a complete rewrite of HR,” says Jean Pelletier, Schneider Electric’s vice president of digital talent transformation. “You need to think differently about speed and how to go deep and broad in an organization using an internal talent marketplace, especially when it’s fueled by AI.”

Ultimately, ITMs strengthen the open talent capability of networked organizations, leveraging the power of your internal employees to get work done, whether it’s on their own or in teams that can include external workers on platforms.

Many companies have attempted to use ITMs to their advantage. SAP Blue was an internal platform that started in India to connect idea generators with developers at SAP. It could usually find a match within 5 minutes. Elsewhere, French multinational advertising company Havas took still another approach to building an internal marketplace. Instead of creating something from scratch, it acquired another company to drive its open talent efforts. But the internal platform failed because it lacked buy-in from the relevant managers.

As with so many other things, the greatest drivers of innovative technologies are users, who know their own needs best of all. When buying or developing software for an ITM, you need to think about not only what you will need from it now, but also where you are in the adoption process.

6 Objectives of a Successful ITM

Building an ITM can be a large undertaking. It helps to start with specific goals that your organization’s center of excellence (COE) will aim toward, such as:

1. Unlock agility in your internal talent. While many organizations understand the importance of agility, especially in the context of digital transformation, they haven’t yet applied it to talent. Leaders have been held hostage to traditional HR mindsets and culture. ITMs allow you to pivot at a moment’s notice and redeploy your talent to where it’s most needed.

For example, you can shift your employees and their duties according to the organization’s immediate requirements. Instead of laying off workers because of changing market needs, you may find that those employees already have developed some of the skills the company needs to pivot in the marketplace.

This type of change happens frequently at startups and consulting companies. It also occurred at Commonwealth Bank of Australia during the pandemic, when its branch employees shifted to help the call center field questions.

2. Capture cognitive surplus. Barry Matthews, CEO of Open Assembly, estimates that in most technology organizations, 20 percent of the staff are working on side projects. “There are two ways to approach it,” he says. “Either you can try to kill people’s side gigs or celebrate them. When you celebrate them, you can also ask people to use their creativity and passion to help your own organization out in different areas.” The key is to focus on finding the problems that people will be interested in and getting the word out internally.

3. Encourage high traffic in your ITM. The problem with most internal platforms is that only a fraction of the community uses them. That’s because it’s a new way of working. Your chief metric of success will be how many people use your platform and how often. Increase internal traffic by sharing the stories of success widely throughout the organization.

4. Break down silos. Traditional organizations have rigid talent hierarchies in which employees’ skills are hoarded. This structure prevents the overall workforce from achieving its full potential. ITMs break down silos and allow for cross-fertilization.

5. Improve engagement and retention. If people in your workforce don’t see a future with your organization, they’re going to find somewhere else to build one. ITMs empower employees to move laterally and vertically, learn new skills, and seek out new opportunities that align with their passions, skills and ambitions. Empowering your employees in this way helps your organization meet its goals.

6. Encourage experiential learning. Traditional development efforts fall short because they fail to include experiential learning, such as offering ways to learn by doing, rather than just by reading or listening to someone else. These efforts also ignore the employee’s acquired knowledge and ability to apply new skills in a real-time setting.

ITMs create a unified workforce system that can act as a single source for skills management. Such a system is an important tool for organizations seeking to optimize their human resources and increase efficiency. By providing a consistent understanding of the internal roles, responsibilities and relationships, organizations can ensure that processes are streamlined and everyone is working toward the same goals. In turn, HR departments will better understand how employees fit into the organizational structure and how they can work in areas that maximize their potential.

Overcome Talent Hoarding and Other Barriers to ITMs

Once you have established the main goals of your ITM and the platform (or platforms) you’ll enlist to help you, it’s time to begin developing a robust internal marketplace.

As a first step, your center of excellence should do an in-depth assessment of the organization. Do employees take charge of their own career development by seeking out opportunities in other areas of the organization? How well do people in the company collaborate now, within and across departments? Do various parts of the company share talent, or do they hoard it?

Hoarding talent is one of the biggest barriers to internal mobility that we have seen in our research. It is only natural that managers want to keep talent to themselves. When a manager has created a great team and things are firing on all cylinders, it makes sense that they would want to keep the team together.

Another barrier we see is fear, which also makes sense. As frustrated as some team members may be with their lack of mobility, others may reject opportunities to move. If a pilot project goes south, or it turns out a person is not a good fit for a new role, they may not be able to get their old job back.

But some of those psychological and practical barriers are falling, as the rise of remote work has made it necessary for companies to develop internal platforms and has given a huge impetus to work cultures that are much more flexible.

After doing an organizational assessment to ferret out talent hoarding and other problems, make sure your ITM efforts have the backing of high-level executives, whose sponsorship will be key to success. Ideally, these people (or this person) will be deeply familiar with your organization’s HR functions. That said, the sponsor must see beyond traditional talent development methods, such as talent allocation, and instead envision talent as personal career development.

Along with getting a sponsor, you’ll need to involve key department heads from the beginning and get them to align on strategy. That’s because an ITM is not just an incremental tweak to your HR structures. When done right, it fundamentally changes your organization’s approach to talent.

So, your COE should start by holding a workshop with C-suite leaders, HR practitioners and anyone else from domains where the changes that come with building an ITM will be felt most keenly. Be specific about what the internal marketplace will deliver and how. In doing so, you enable your team to set measurable objectives for activity against which success can be measured.

Excerpted from Open Talent: Leveraging the Global Workforce to Solve Your Biggest Challenges by John Winsor and Jin H. Paik (Harvard Business Review Press, 2024). Reprinted with permission.