Implementing a Talent Marketplace: a Comprehensive Guide

21 min read

Talent Marketplace: a Comprehensive Guide

What is a talent marketplace?

Talent marketplace definition

A talent marketplace is a tech-based platform that enables modern organizations to match current members of their workforce with the available internal opportunities, ranging from short-term projects to full-time permanent (new) roles.

This type of talent platform relies on advanced AI and machine learning algorithms to accurately analyze different sets of data — employee skill profiles, personal interests and preferences, the descriptions and requirements of internal opportunities posted by managers — to make automatic suggestions to workers who have a high matching score with various project opportunities.

In essence, a talent marketplace facilitates (and encourages) internal talent mobility and professional growth. As a direct result, organizations end up with increased workforce agility and a dynamic talent ecosystem in which non-linear career paths and cross-departmental collaboration act as pillars for maximizing and exploring the full potential of employees.

Difference between internal talent marketplace vs talent marketplace

Sometimes, talent marketplace can be used to refer to an external talent pool (of potential candidates).

However, most leading voices in the industry — including Mercer, Gartner, McKinsey, and the Harvard Business Review — use internal talent marketplace, digital talent marketplace, and talent marketplace as synonyms that describe the same HR solution used by companies to connect their people with all the growth and development opportunities provided internally.

Note: some organizations and resources choose to abbreviate internal talent marketplace(s) as ITM(s).

Type of opportunities available in a talent marketplace

The type of opportunities listed in a talent marketplace will obviously vary based on the size, resources, and (the development and business) needs of each company. However, the list can include any and all types of initiatives, from the most traditional and formal ones to the most innovative and experiential approaches:

Depending on the other platforms or learning systems used by your organization, an internal talent marketplace can also allow the inclusion of opportunities from external learning providers, such as Coursera or Udemy, among many others.

When selecting the types of opportunities to be included in their talent marketplace, organizations shouldn’t overlook the importance of informal or in-the-flow-of-work learning — which, according to the 70-20-10 development model, accounts for most of the growth and development in the workplace.

Why is an internal talent marketplace important?

Embracing an internal talent marketplace comes with many benefits that cannot be dismissed. But perhaps the critical importance of doing so is best expressed by Josh Bersin, top HR voice and thought leader, who argues that:

 
Internal mobility and talent marketplaces and identifying adjacent skills for employees — allowing people to do gig work — those are life-or-death survival strategies in an economy like we’re in today.
 

With that in mind, let’s take a closer look at the main advantages of having a talent marketplace:

Drives skill development and ongoing learning

Thanks to a talent marketplace, employees can see, compare, and choose (growth) opportunities that would otherwise not be available to them due to various reasons — like having a silo mentality or a tight hierarchical structure.

By having access to a more diverse range of projects and tasks that align with their expertise and interests, people are naturally encouraged to expand their skill utilization and take on challenges that are beyond the comfort level of their existing roles.

As a direct result, they will collaborate on projects that enable them to learn from each other’s experiences and best practices — better known as on-the-job learning and peer-to-peer knowledge sharing — which is one of the fundamental elements of a culture of continuous learning that drives the sustainable skill-building of in-demand capabilities.

 
The simple premise is the talent marketplace lets people put their hand up for work outside their core role — it opens up the capacity of the workforce. But it is so much more than that — for employees, it helps them really see what their skills are and how they can develop those skills.
Anne Le Blanc, Senior Principal at Mercer Workforce Solutions
 

Democratizes career development

Through this platform, learning and development opportunities are available to everyone within the company, regardless of their role or department.

Thanks to this transparency, candidates and growth opportunities are matched based on factors that can be measured objectively — e.g., skills, proficiency levels — thus eliminating (managerial) bias or preferences based on personal networking.

The whole process empowers employees to take ownership of their professional growth and apply for projects that can help them develop further and become the ideal candidate for a future job role within the organization.

Boosts talent retention, job satisfaction, and lowers replacement costs

For modern organizations that are struggling with talent and skill shortages, retaining people for longer has become a critical need with a direct impact on overall performance and business outcomes.

And when we know that people leave companies when they aren’t given enough growth opportunities or they can’t see a path forward toward their professional aspirations, a talent marketplace becomes a must-have and a true game-changer.

In addition to showcasing not only how many upskilling opportunities are available but also how diverse they are, this platform also goes beyond traditional top-down career progression paths, enabling people to make lateral and cross-departmental moves or transfers, which are increasingly popular.

The diversity of opportunities combined with a dynamic approach to career progression will keep your employees much more engaged and stimulate their natural curiosity — by regularly presenting new short- or long-term opportunities readily available and easily accessible in one place. All these extrinsic and intrinsic stimuli will result in higher retention rates and longer tenures within the company.

Nurtures workforce agility and cross-departmental collaboration

By providing a centralized platform where workers can see how their skills and interests match with emerging projects or roles, organizations can respond faster and more effectively to evolving (business) demands.

This agility and dynamic movement of talent is further enhanced by the platform’s ability to promote and encourage cross-functional collaboration and knowledge sharing, allowing teams to leverage a more diverse range of expertise from people with different cultures, backgrounds, and functions.

After a talent marketplace is adopted and everyone becomes familiar with it over time, it will also change the entire mindset across the organization, with growth and ongoing learning becoming integral values and with people actively seeking and being ready to jump into projects or teams.

Supports workforce planning

Another important benefit is that data from the talent marketplace can be combined with insights on workforce trends within the company to help decision-makers predict future talent needs — an essential aspect of strategic workforce planning.

 
One of the nice things about data derived from AI is the transparency. It allows us to see patterns. We can see skills on the rise and on the wane. The search still has a human interface, but by being able to look across many more roles, skills, and people, you start getting a sense of what skills are trending.
Bill Schaninger, Senior Partner at Modern Executive Solutions
 

For example, HR can determine whether they are (or risk being) under- or over-staffed in certain areas based on the number of internal candidates interested in specific roles. Or they can see the difference between employees’ aspirations and organizational needs. For example, will workers be more interested in the business-critical (short-term) projects or in the career growth and L&D opportunities from the marketplace?

In the case of succession planning, this will help prevent situations in which too many candidates end up in the pipeline of qualified future leaders without the possibility of actually making that move (to a high-level role), which can lead to unexpected departures and unhealthy internal competition.

These predictive analytics and talent marketplace data are also crucial for proactive reskilling programs and anticipating talent redeployment needs — something that could become increasingly necessary as AI tools and automation become widely adopted.

How does an internal talent marketplace work?

Let’s break down how this innovative platform manages to successfully connect your workforce with opportunities:

Setting up and updating employee profiles

An internal talent marketplace cannot function without insights from employee profiles, which is where people will showcase their skills, qualifications, experience, and (growth) interests.

All these (regularly updated) rich sources of data will enable the automated matching algorithms to make personalized suggestions and inform each worker about their matching scores with temporary projects or new roles.

The talent marketplace provided by Nestor is perfectly integrated with our skills-based employee profiles and the other talent management modules on our platform. However, designing your own marketplace or working with other providers might require you to set up entirely new employee profiles or find workarounds for sharing or importing data insights.

Learn more about employee skills profiles.

Creating and sharing internal opportunities

This stage is all about HR, decision-makers, and managers posting projects and openings that reveal teams or areas where extra muscle is needed on a temporary or permanent basis.

As mentioned earlier, these opportunities can include anything from short-term gigs and mentorship opportunities to full-time positions. And since we’re talking about mentorship, that’s the beauty of a talent marketplace acting like a two-way street:

Any highly experienced or senior professional can create a listing in which they make themselves available for coaching or mentorship — for example, one hour per week, on Fridays, from 5 PM. This means anyone who’s interested in picking their brains or learning from the best can express their interest officially and, if selected, take one of the first steps toward a business-critical leadership or higher-level role.

For each opportunity or listing, managers will also detail the desired skills, proficiency levels, and overall expertise required to take part in that particular project. And the opportunity itself can also be linked to larger operational goals or team objectives.

Automatic matching and compatibility insights

In modern talent marketplace platforms, optimized matching harnesses the power of advanced AI algorithms to connect skills with opportunities and pair the right employee with the right projects.

In an overly simplified way, at its core, the process starts with analyzing individual profiles and understanding the nuanced competencies and strengths possessed by each worker. At the same time, data is aggregated on the requirements, objectives, and specifications of the opportunities or listings available internally — this can include but isn’t limited to project scope, required skill sets, deadlines, or even team dynamics.

The people-matching algorithms then identify synergies and strong alignments between employee profiles and available opportunities. Thanks to the vast and rich datasets and real-time insights, the skills-matching algorithms can easily identify patterns, and correlations, and even show levels of compatibility based on predictive indicators.

The use of AI-powered matching also comes with another important benefit: eliminating personal biases that can influence decision-making, even at the top level. By relying solely on objective data and skills-based recommendations, the talent marketplace ensures that the matchings in your organization are made on individual suitability, thus promoting a culture based on fairness and meritocracy.

Selecting the best-fit candidates from all the applicants

Once they have a list with enough candidates, your managers can select one (or more) suitable contributors based on their requirements — without being limited by the options or submissions from their own team or departments.

It’s also worth highlighting that employees can apply even without having a (nearly) perfect compatibility score, of let’s say 90-95%. It’s okay if they are only a near match. This is true for all projects and especially for full-time open roles, where it’s common for additional training, onboarding, or even upskilling to be necessary before actually being offered that position.

Once employees start contributing and taking advantage of these internal opportunities, a history of their activity and achievements will also be included in their individual profiles, further enriching it with relevant data and improving matching algorithms in the process.

How to know if your organization needs an internal talent marketplace

You need to look at many aspects when evaluating whether a talent marketplace is the right solution for you. Below, we’re exploring some of the factors and challenges that — when one or more are present — might indicate the need for this type of talent solution:

Unable to identify skilled people or the right skills for internal projects

This one is straightforward. Plenty of organizations know they have top talent and high performers within their ranks but are still unable to identify the best-suited candidates for projects or (business) emergencies that arise internally.

An internal talent marketplace solves this challenge by revealing the top-matching candidates for each opportunity and then allowing them to choose whether they want to apply for any given project (or not) — which ensures people who express an interest in tackling those internal tasks are already self-motivated and involved for all the right reasons.

High number of employees reporting underutilized skills

Another situation where your organization should consider an internal talent marketplace is when a significant percentage of your workforce either reports that their skills aren’t applied to the full extent or they feel they could contribute more to other projects or even in different roles.

These insights can emerge from both self-assessments — although, due to their subjectivity, they shouldn’t be used as a single source of truth — and from 360 feedback, where colleagues or supervisors are able to list competencies or skills that someone has but aren’t maximized in their current job.

Attrition rates are beyond expected or desired levels

Here, it’s important to exclude factors like the Great Resignation or the pandemic, which made many people reconsider their priorities and long-term (life) decisions.

We’re talking about low retention that goes beyond what your internal predictive analysis estimates. You can make use of exit interviews and see if they reveal a lack of (growth) opportunities or career mobility as one of the main reasons for leaving.

If it is so, a talent marketplace will help because, in addition to making these opportunities available, it will also give your (hiring) managers access to a larger pool of candidates, including people who might otherwise be overlooked — and who will, eventually, decide to look for the next career move elsewhere.

Low long-term ROI on gig workers and contractors

For some companies, the numbers simply don’t add up. While there are obvious benefits to hiring freelancers and temporary workers, those usually lack company loyalty (at least, compared to regular employees) and can choose to stop becoming available for projects or additional work at any point.

While training and development costs aren’t normally associated with employing these types of people, the entire approach still involves expenses that only pay dividends in the short term and don’t contribute to nurturing a strong and knowledgeable workforce that you can rely on for years — or, in the case of leaders, decades — to come.

Worker-replacement costs are high in your industry

Replacing workers is rarely affordable or fast. So, the cost isn’t only financial but also in lost productivity and resources being diverted from other priorities to this one. But in some industries (e.g., highly specialized ones) these costs are much higher than in others.

If you operate in one of these industries, you might want to look at a talent marketplace platform, since it plays a key role in making growth and learning opportunities easily accessible to anyone — which is perfectly aligned with what many modern workers want in order to be (professionally) fulfilled and extend their current tenure.

Rapid change perfectly describes your industry

And while we’re talking about industries, if change defines your area of business, then your workforce, productivity, and organization would greatly benefit from internal transfers — which are a true gold mine in terms of spreading and sharing valuable knowledge.

And what’s one of the best ways to facilitate, democratize, and encourage these internal transfers? Through an internal talent marketplace.

Employ a high number of generalists

One of the advantages of having larger numbers of generalists is that they can quickly shift from one task or project to another thanks to their highly interchangeable skills.

However, this is only possible in a culture that promotes this type of flexibility and embraces the idea of people (temporarily) changing teams or departments. If you find yourself in this type of situation, a talent marketplace will have a powerful positive impact, both for you and for your generalists.

Struggle to attract or keep Gen Z employees

Gen Zers are most likely to leave an organization when the internal opportunities you provide don’t match their desire for (rapid) growth. Or when these opportunities simply aren’t available — or visible.

An internal talent marketplace solution doesn’t guarantee that you will retain them but it significantly increases your chances and stimulates growth across the entire organization. And that’s something that will change how people see the organization itself and even their career progression or tenure at your company.

What is the minimum number of employees necessary for a talent marketplace?

A talent marketplace works best for companies whose number of workers is high enough. Why? Because the larger the marketplace, the larger the number of opportunities and the higher the chance of matching employees with various projects or roles.

How high should that number be? 500 or lower, according to the Harvard Business Review. But Mercer suggests that 2,000 is the minimum required for this type of marketplace to make sense.

The truth? If you face at least some of the situations above and are serious about growing people internally and retaining them for longer then a marketplace solution can definitely work — as long as it is implemented accordingly and you select a vendor (and a platform) that matches your specific needs.

How to support employees during and after adopting an internal talent marketplace

Firstly, it’s worth emphasizing that adopting a talent marketplace solution involves a cultural shift across your entire organization. In essence, it means understanding and integrating new ways of thinking about talent and job roles, which will also manifest in a cultural change.

Here are other aspects you should consider in the process of supporting your workforce during and after adopting an internal talent marketplace:

Provide clear communication and incentivize people to embrace the platform and begin using it

It all starts with clearly explaining how the talent marketplace will create value and what the main use cases will be within your organization (or the business areas where it will be deployed). People need to know why this change is being made and that it is for their own benefit.

Another aspect is ensuring that HR, L&D, and people managers or direct supervisors know how the new platform works, as well as how it integrates with existing hiring, learning, or performance management systems — this will take time. Questions that could arise here:

While your managers will need to be encouraged to change how they look at talent and how they identify candidates for new tasks and projects, employees will need support in shifting the way they look at their professional progression — adopting a more dynamic approach or vision and considering lateral moves and non-linear career paths.

Making participation optional could also be a good idea, otherwise, you risk creating a situation in which people take on new tasks (or projects) without actually seeking growth or new experiences but rather just to ‘check’ another item on their to-do list — which isn’t productive or worthwhile for anyone.

Address common questions and concerns

Different people will be worried about different things. For example, some managers could perceive hiring someone from another team, even temporarily, as ‘stealing’ talent instead of sharing it. Therefore, a change in mindset will be necessary. At the same time, other managers could fear that losing their top performers will inevitably affect the overall performance of their team and their KPIs.

Another real risk is ending up with high-talent or high-performer concentrations — the best managers and the best employees ending up in the same high-performing teams since it’s natural for people to want to work with and learn from the best.

As for employees, they might worry, for instance, that they could be deployed (even if only for a period) to projects or roles that don’t necessarily align with their long-term career aspirations.

You’ll need to be aware of these concerns (and many others) and address them in order to help everyone understand how the other members of a team are impacted by the transfer of a colleague and what measures are in place to ensure performance and continuity will not be affected by the moves facilitated through the talent marketplace.

Explain how data from the talent marketplace will be used and made available

While this could easily be labeled as another concern, it deserves to be treated separately since it overlaps with larger and more important things like ethics, privacy, and, of course, the matching algorithm and AI used by the talent marketplace.

Organizations need to be transparent about what information is public and what is private on the platform (e.g. skills information and employee profiles) and what each type of user — administrator, manager, employee — can see from their end.

In this direction, you can organize Q&A sessions from the beginning and do them regularly, at least in the first few months after the adoption of the talent marketplace.

It’s also just as important to create resources (e.g., video tutorials, descriptions) or leverage those provided by your selected vendor to help employees adjust the settings and options available for their own profile in the marketplace.

Frequently Asked Questions (FAQs) about the internal talent marketplace

What is an internal talent marketplace?

An internal talent marketplace is a digital platform or solution that helps employers set up, speed up, and improve the (automatic) process of matching their existing employees with all the various training and development opportunities available internally — which can range from short-term gigs and cross-departmental projects to coaching and mentorship and even full-fledged L&D programs or part/full-time roles.

What is another name for talent marketplace?

In addition to internal talent marketplace and digital talent marketplace, you’ll also see talent mobility platform and opportunity platform used as synonyms for talent marketplace.

Why implement a talent marketplace?

There are many benefits and reasons to implement a talent marketplace, including the improvement and simplification of matching employees with internal opportunities, the ability to unlock and further develop hidden (employee) skills, the reduction of turnover rates, and the creation of a more flexible and resilient workforce.

How do you choose an internal talent marketplace?

Choosing a talent marketplace provider should start with establishing the main goals and targets or what you expect the platform to do for your organization. Here, it’s just as important to understand what an internal talent marketplace cannot do and to ensure key stakeholders are aware of both the benefits and the limitations of such a platform.

Then, it’s all about researching and evaluating different vendors (through ongoing discussions and demos) to see how their marketplace solution works and how well it aligns with your initial goals. During this step, organizations should look at things like scalability, security, user experience, and how well the marketplace can integrate with their current HR systems and tools.

The final step is usually a pilot program, which involves deploying a version of the talent marketplace to a smaller team or group of people so that they can test it over a given period. At the end of the program, decision-makers will gather feedback and determine whether the solution meets their needs — which is then followed by a strategic and gradual company-wide deployment.