Amy is a university graduate about to begin her first full-time job. Above all else, she values loyalty and stability and would like to spend her career at the company, patiently climbing the corporate ladder.
If this sounds unrealistic, that is because it is. The median number of years that US workers spend on a job is 4.1. For many employees, the search for better opportunities involves changing jobs. Millennials and representatives of Gen Z are particularly comfortable with job hopping.
What does this mean for companies? For starters, millions in recruitment costs. For US employers, the average cost of a new hire is USD $4,700 and can go up to three to four times the employee’s salary for some jobs and industries.
Encouraging internal mobility is one way to deal with high recruitment costs (and a host of other issues). Internal mobility was already a trend back in 2020. Two years down the line, there is also solid data to confirm why it is so important for employers. According to Global Talent Trends, a LinkedIn study of 15 industries, internal mobility increased retention by 22 percent for employees at the three-year mark.
Some pioneering companies are rolling out internal talent marketplaces in a bid to promote internal mobility. These AI-powered technology platforms can also help employers with another major challenge: the urgent need to upskill and re-skill large numbers of workers. With the potential to democratize careers and facilitate experiential learning, internal talent marketplaces are a real win-win for both employees and employers. This article explains why.
What is an internal talent marketplace?
A talent marketplace expands the possibilities for internal mobility by connecting employees with opportunities like vacancies, project work and mentoring programs.
Surely, promoting from within is not a new concept. HR teams are well aware of the advantages of internal hires: knowledge of the company and its culture, ability to adjust quickly to the new role. Hiring from within is also great for morale and is more cost-effective compared to bringing in new people.
The problem is not that managers lack interest in internal hiring, but that they think they should look outside the organization because they are not fully aware of the potential of existing staff. When people are viewed just in terms of their job titles, many suitable candidates may be overlooked.
Driven by machine learning, internal talent marketplaces focus on skills and provide a more detailed picture of what existing employees are truly capable of. Managers are provided with a larger pool of candidates, including people with alternative skills or adjacent skills who may need just a little bit of additional training to fit all criteria.
What if an employee who is interested in a new vacancy lacks many of the skills needed for a good fit? No problem, they can take responsibility for their own development and search for suitable gig work, rotation programs, stretch assignments and mentorship programs. These experiences will help them build up their skills and knowledge, making them a desirable candidate in the future.
How internal talent marketplaces benefit employees
When capable and ambitious employees don’t see exciting career prospects with their current employer, they will look elsewhere. This has become so widely accepted that in some cases, people are judged negatively for staying on a job for too long.
Depending on the industry, years and years spent in the same position may suggest that someone is complacent and rigid. However, staying on with the same company but in different roles is another matter altogether. Talent marketplaces facilitate internal mobility very successfully.
For example, an employee may be interested in moving from accounting to finance. They could find an opportunity to help out in the finance department on a project basis, dividing their time between their core duties and the new assignment. They could also search for training and mentorship opportunities. Over time, the employee will accumulate the skills and experience necessary to be a good fit in the desired department.
Such lateral moves are much more easily available, compared to opportunities to progress vertically. They are also considered attractive by many employees and present new challenges and plenty of opportunities for growth.
By democratizing careers in this manner, talent marketplaces help employees expand their horizons and pursue their passions, giving them a sense of purpose. When applied on a company scale, this approach can increase employee motivation, morale, productivity and many other corporate metrics.
Benefits of internal talent marketplaces
Implementing an internal talent marketplace requires support from executives and managers, as well as the buy-in of a critical mass of the workforce. It places an emphasis on collaboration and calls on companies to re-examine aspects like the role of management and the divisions between departments. Such questioning will challenge established norms of a company’s culture. Still, these are steps worth taking. When implemented successfully, internal talent marketplaces bring in a number of benefits:
More engaged workforce: It is easy to become complacent after many years doing the same job. In contrast, employees who can choose from plenty of new job vacancies and interesting learning opportunities are more motivated and engaged at work. As mentioned already, high levels of employee engagement translate into tangible benefits for employers: higher productivity, improved customer service, increased retention and reduced hiring and onboarding costs.
Culture of lifelong learning: According to the influential Future of Jobs Report, 50% of all workers will need reskilling in the period from 2020 to 2025. This trend is unlikely to stop. Learning on the job will become even more important in the future, and the companies that embrace personalized and flexible L&D will get ahead in the game. An internal talent marketplace promotes opportunities for growth and development transparently and makes employees more responsible for their development. Companies with a culture of lifelong learning are able to reskill and upskill workers in a faster and more effective manner.
More innovation: By promoting cross-functional collaboration, talent marketplaces help break down silos. The value of getting employees from different parts of the organization to engage and work together is well-discussed. When people are encouraged to exchange ideas and consider differing viewpoints, innovative solutions are born.
Greater diversity and inclusion: An internal talent marketplace can support DEI initiatives in two ways. Firstly, by increasing transparency and reducing bias. Secondly, by allowing full visibility into the skills of people from underrepresented groups. On the basis of this, existing skill sets could be matched to new job opportunities or managers could create specific learning and training opportunities for minority representatives.
Agility: A company which is able to quickly upskill and reskill its workforce can quickly redeploy employees in response to changes in market dynamics. Agile companies are more competitive and future-proof.
In conclusion, employers that harness the power of internal talent marketplaces will support employees on their quest for purpose and meaning. In turn, the companies themselves will be more fit to deal with present and future challenges.
To learn how Mentessa can help you unlock the potential of internal talent marketplaces: