Companies that think they have a shortage of talent are often looking at their employees the wrong way, said Jeffrey E. Schwartz, a vice president at Gloat and author with Suzanne Riss of “Work Disrupted”.
“We only have a shortage in a world where we assume talent, skills and interests are fixed. Every leader today is looking at the skills and capabilities they need to deliver on their strategy. There continues to be a shortage of available talent to recruit in the tech sector. Companies are very focused on reskilling and helping people move internally.”
The Covid-19 Pandemic showed organizations that “what we thought our employees could do and what they can actually do has astonished us. For business, the issue is how do we create the talent we need using the people we have. And for the employee, the question is how do we make available to you opportunities in jobs and projects, and how do we show you the opportunities in our company based on the skills you have, the skills we infer and the interests you have. Looking at your interest and ambition, how do we fill the gaps and do it in a highly visible way inside of our company.”
With tools like LinkedIn and Glassdoor, employees often have a much clearer view of opportunities outside than they do of opportunities inside their own company.
“We tell companies how many of their employees are on LinkedIn, which is simple to look up. Often it is larger than their total payroll because contractors list themselves as employees.”
Most people tend to have three views of how they can advance their careers. The first is they can advance within the group where they are already located.
“That’s what everything is organized around today.
A second is lane switching, moving from one division to another.
“If I want to move from software to sustainability, is there a gap in the knowledge and experience that I have? What do I need to learn, can I find a mentor, can I get into a network to fill those gaps?”
The third path is moving to become a manager, what are the different levels of managerial opportunity?
“Most managers think their employees are what they recruited them to do — but that’s only the tip of the iceberg. By applying talent marketplace dynamics using AI, we give employees the opportunity to say here are my skills, not just the skills I have accumulated, here is my LinkedIn Profile, and the other question we asked explicitly is what do you want to do.”
Historically companies have focused on recruiting from outside, and many have rules that restrict mobility internally, such as saying an employee can’t change divisions within a certain time frame, such as one year or even three years.
“The challenge right now is that in most organizations we still think of talent mobility in a relatively normal way. In most organizations we see talent hoarding, there are real incentives for many managers to keep you in your division.”
So that can push an ambitious employee to move to a different company. Recruiting an outsider costs about 84% of their yearly salary, according to Deloitte. The numbers on opportunity cost are going to be squishy, but that doesn’t keep consultancies from making estimates.
Gloat cites Gartner on the cost of turnover due to a lack of career development and internal mobility to just an average-sized company is $49 million. Another study says that on average employees stay 41% longer at companies that regularly hire from within. Gallup says disengaged employees have 37% higher absenteeism, 18% lower productivity and 15% lower profitability, resulting in a cost of 34% of that employee’s salary to the business.
Deloitte says it takes two years for a new hire to learn an organization and its processes.
By recruiting existing employees for new positions, a company has the advantage of already knowing their work ethic, and has at least some assurance the employee knows the corporate culture and understands how to get things done.
Gloat helps companies develop internal talent marketplaces across many industries, but it works especially well with a large number of financial institutions. Financial institutions, after all, understand marketplaces, said Schwartz.
He thinks most companies are using a 20th century map to understand the very different workplace of the 21st century.
“When work was more stable and credentials had a longer lasting shelf life, then you could use formal credentials as a major indicator of whether people have the skills and capabilities you\’re looking for.
He sees two changes.
“One is the increased use of credentials that aren’t even relevant, like requiring that an administrative assistant needs a college degree, although there isn’t any relation to his or her work. The other change is that in areas like date science and social media, the credentialing process often lags behind the actual skills and capabilities we are looking for. That has led companies to start loosening up requirements and looking for the different ways we can identify people with the minimum skills, capabilities and interest.”
He admits to wearing out a metaphor — recruiters tend to look for a needle in a haystack but miss looking for a needle that wants to be a safety pin.
“Skills and interest represent a very important bundle.”
Recruiting in a bank might involve describing the type of people needed in an area, and explaining a project that is underway and encouraging interested employees to talk to people on the team so both sides can see if there is a fit.
Unilever and Schneider Electric were early adopters of talent marketplaces — they were implementing in the early part of 2020 he said. When Covid-19 hit, they went from having a minority on the Gloat platform to moving everyone to it. The changes required were more than HR departments were equipped to handle.
A talent marketplace is not the same as HR, although it may be adjacent to HR, Schwartz added.
“It is a whole new category of talent; it is not built on a compliance database model.”
And it is being deployed in a world where work has changed.
“We were educated in a world where the office or the factory or the is where the work was done, we associated every aspect of work with a location. Then with Covid, we went from 4% or 5% teleworking to 40% or 50% — that’s 10x. We almost never see 10x changes in our lifetime. For many executives, it continues to cut against the grain of how they think work should be done….What we have seen in the last year and a half is the workforce is unbelievably adaptable, and the workplace is more extensible than we had thought.”
At Standard Chartered, the bank’s goals were to have the right talent to support its business demands, break down silos and hierarchies, and introduce modern work methods such as projects in order to become an adaptable, future-ready, and nimble organization.
Tanuj Kapilashrami, Chief HR officer, said that by using Gloat the bank had matched over 12,000 employees to internal opportunities while boosting year over year employee satisfaction. Standard Chartered decided to go for a full roll out throughout 2021 and bring Gloat to all employees by 2022.
“We’re creating an inclusive environment where we can get diversity of thoughts from a variety of different people and introduce them into our projects, while uncovering hidden talent that we would never have known existed before,” said Watson Stewart, head of talent solutions at the bank.