Edie L. Goldberg, Ph.D., the President of E. L. Goldberg & Associates, is a nationally recognized expert in HR Strategy.
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The ability of a company to access talent is one of today’s toughest business challenges. According to a 2023 ManpowerGroup study, 77% of employers said they're having trouble acquiring the skilled individuals they need to execute on their strategy. That was the highest percentage in decades.
Given the difficulties in landing quality talent, it’s no surprise that managers are turning to contractors to fill the gap. A Sloan Management Review article indicated that, in 2022, external talent was responsible for at least 30% of work in around half the organizations surveyed. In some sectors, such as tech, that number was closer to 40% or 50%.
In response to this demand, digital talent platforms are becoming more specialized, with some focusing on the most in-demand skills. A tech-driven, global talent marketplace gives skilled individuals the freedom to create their own work experience, so those with coveted talents aren't always available as full-time employees. But savvy companies have found a way to leverage this pool of talent. In this open talent approach, companies create a reservoir of vetted, proven contractors they can assign to a project as needed to accelerate execution. This enables managers to flexibly acquire capability and capacity.
A parallel trend is internal talent mobility. Internal mobility allows your full-time employees to remain in their existing positions but opt in to projects that interest them or help them build new skills important to the business. Companies like Unilever are taking internal mobility a step further by implementing programs that allow employees to choose the number of hours they want to work and then focus on projects, rather than being assigned to a specific job.
A Skills-Based Approach
Talent marketplaces can unleash organizational productivity, agility, employee engagement and career growth and development. But to get the full value from open talent models and internal talent marketplaces alike, we must shift our mindset around how we organize work. It requires bringing together all of your talent, external and internal, in a holistic vision.
The key is to move from a jobs-based to a skills-based way of thinking. With this way of organizing work, projects are divided into tasks, then managers search for the precise skills they need to complete those tasks. Ideally, organizations can fully leverage the skills available within the company, but if the skills are unavailable internally, they can hire vetted contractors.
A skills-first approach widens pathways to talent. Skills are changing so quickly, we need both new ways of upskilling individuals and new frameworks for qualifying talented candidates.
3 Elements Of A Holistic Approach To Talent
How can your company harness all of the available talent—internal and external—to optimize productivity, speed and agility? These three elements can help shift you toward a more holistic view of your talent ecosystem.
1. Adopt one system for managing both internal and external talent.
A complete talent management model allows organizations to oversee their entire workforce ecosystem, both full-time employees and contractors. In many cases, however, HR manages internal talent, while procurement or individual team leaders manage external resources. Sometimes, managers even skirt their company’s established HR system to hire contractors. If managers are held accountable for execution but don't have the resources to accomplish their objectives, they're going to find a way to get the job done.
This ad hoc approach to talent management isn't efficient. As an HR leader, you need a line of sight into the full range of talent available to your company and how to optimally access it. It's vital to understand and manage all of the individual skills your employees possess, both what they are using in their role today and other potentially relevant skills. Next, you must understand what skills are in growing demand and where you can source them through online platforms. This is especially helpful if you're having issues hiring skilled full-time employees. This approach acknowledges that talent is a corporate asset that needs to be managed strategically.
2. Treat external resources as partners and part of the team.
When companies don't manage their internal and external resources as an integrated ecosystem, they may unwittingly create a two-class system that often causes friction. Full-time employees may come to envy contractors’ flexibility, while external talent is often doing work without sufficient context. These disconnects may hinder engagement and team performance, risking inefficiency and high costs.
You can manage the relationships between employees and contractors by providing transparent guidelines for their work. Managers should clearly explain to employees why they're turning to alternative resources, what these resources are going to do and why they’re being hired. If you must constantly acquire external talent to execute your business strategy, then leveraging contractors to help build internal capability should become a strategic priority.
3. Have a skills database that gives you a complete view of your talent.
You need robust skills data associated with both your internal and external talent. Implementing tech for talent management allows you to record and retrieve all the skills currently available, and it enables managers to find the skills they need. If you don't have a handle on your resources, it's difficult to assign people to projects in an effective, flexible manner.
Successful companies will be those that leverage talent flexibly by mastering the art and science of attracting and managing the very best talent through a holistic vision. By managing internal and external talent as a single ecosystem, you'll have the best chance of surviving the talent shortage. You can also keep your organization on track to reap the benefits of productivity, speed and agility.
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