Why the talent marketplace will be ‘central to HR tech’

As a result of the current and widespread disruption of the labour market, companies are heavily pushing internal development. And one key element of this strategy is the adoption of internal talent marketplaces.

When supported with the right technology, a talent marketplace helps employees find internal positions, projects, and mentors without going through their managers. In other words, it is a democratised way to allow employees to fulfil their aspirations, while at the same time, increasing the efficiency of developing people and moving them into new roles.

I have interviewed leaders from more than 50 companies using these talent marketplaces, and it is clear to me that the internal talent marketplace is one of the most successful innovations in HR. Every company that adopts this kind of solution sees almost immediate positive results, and over time, the system becomes hugely popular and widely used by employees and managers alike.

Given the enormous market potential, many vendors are eyeing this space. The market’s pioneers are Gloat and Fuel50, each of which has more than a million users on their platforms. But right behind them are offerings from Workday (which is connected to the Workday Career Hub and has more than 90 customers), Eightfold (connected to its Talent Intelligence platform), Hitch, iCims, Oracle, PeopleFluent, and the new Opportunity Marketplace from SAP. Vendors like Degreed, Cornerstone, and Phenom are also jumping in.

Talent marketplaces can be homegrown, as Allstate and Vertex have done. Or, companies can buy a specialised solution, many of which provide AI-based matching, skills taxonomies, and analytics out of the box.

Features offered by market leaders

While talent marketplaces often start as a career-planning or job matching systems, their benefits can quickly expand to help employees connect to mentoring, development programs, and job sharing and gig options. Hiring managers also can use these systems for filling job vacancies.

Robust solutions for talent marketplaces have many under-the-cover features that allow companies to expand the use of these systems in many ways. Following are some of the features that have proven to be valuable:

Skills taxonomy capabilities: The solutions have the ability to infer, analyse, and understand the skills of each employee. This means they have the sophistication of an LXP or HRMS just to operate well.

Compelling, approachable user interfaces for employees, managers, HR professionals and recruiters: Talent marketplaces are not just for job searching. They should also help employees explore career opportunities and manage gig work and help recruiters find internal job candidates.

Advanced analytics: Managers will want to know where high levels of mobility are taking place, which roles are in high demand and how people are trending in their personal reputations and growth.

Connections to your company’s training and career development offerings: One could argue that talent management solutions may eventually subsume or integrate with the LXP.

Organisational design support: Solutions from Gloat, Eightfold and Fuel50 include tools to analyse job architectures, identify organisational changes and help hiring managers to design the roles needed for upcoming projects.

Assistance with pay and performance management: Future approaches to performance and pay will be based on factors such as skills, experiences, reputation, and internal connections.

And there is much more yet to come. Leaders focused on future skills initiatives want to import data from external skills taxonomies, job architectures, and assessments into their systems. One client I just talked with uses Korn Ferry assessments for the company’s leadership development. As soon as the company implemented its talent marketplace, it then connected the solution to these assessments.

I believe talent marketplace solutions and the talent intelligence functionality they offer will become central to HR tech. As these systems grow in maturity and purpose, companies are going to rely on them for many purposes. Pioneers like Gloat and Fuel50 have really pushed the potential of these solutions. And with today’s highly competitive labour market, I think we will see nothing but accelerating growth in this market segment.

By Josh Bersin, a Global Industry Analyst and CEO of the Josh Bersin Company. This article was first published on Human Resource Executive.