The Benefits of Internal Talent Pools
In recent years, a well-executed talent management strategy has been regarded as an important foundation for achieving employee and business success. However, with the world of work experiencing such high-speed changes in recent years, businesses need to review their processes and account for the increased need to support rapid change. Being best prepared for the future should include adding robust and adaptable talent management tools to your frameworks. For example, following the global pandemic and the Great Resignation, more and more companies have been facing the challenge of talent and skill shortages. A way to combat this shortage and add to the more dynamic nature of your talent management strategy is through creating talent pools. What are talent pools? Talent pools are groups of top talent in your organization that are handpicked to be developed and move into future responsibility within your workforce. While there are two main types of talent pools, internal talent pools can help deliver many company benefits such as increased engagement and the ability to be better prepared for the future.
External vs Internal Talent Pools
External talent pools are closer to what many would think of as traditional recruitment and are made up of groups of people not currently working for your organization. These can include past employees, or sometimes talent will submit a resume to your company without a job position in mind. These applications often end up in a talent pool instead of in consideration for a specific role. These external talent pools can be a helpful reference for your recruiters when the time comes to begin the hiring process, however they still retain a high cost and more risk than internal talent pools.
Internal talent pools are comprised of current employees who align with your company’s mission, vision, values and have a proven track record of work history. Succession planning for critical roles is supported by these internal pools. Depending on the overall size of your organization, these talent pools can be notably smaller than external pools, however the value they can bring is potentially much greater.
The Benefits of Internal Talent Pools
The positive outcome of internal talent pools is multifaceted. Let’s begin with the benefits to your employees. Internal talent pools can help create a culture of internal mobility. If a company routinely hires internal candidates, employees are more aware that career opportunities exist within their company and won’t feel stuck in any given role. This helps build the trust of your talent as you take steps to promote and develop them from within. In the opposite example, the negative effects of using an outside hire from an external talent pool for a role can inadvertently hurt employee morale. This can occur in times where someone is passed up for a promotion and then they are expected to train the new hire on company knowledge that they already possess. When employees find themselves recognized for their commitment and see others alongside them reach success internally, employee engagement, motivation and retention can be increased.
For the organization, internal talent pools can save large amounts of time and money. Hiring is expensive from job listing to background checks. It is estimated that the cost of an external hire is up to twice as expensive as hiring internally. Additionally, retention gained by boosting employee engagement keeps companies from having to hire even more than they already needed to, therefore saving more money. Hiring outside your organization is also a large time investment. It can take weeks or even months to find the right talent, vet them and complete all the necessary negotiations and paperwork. Even after the new hire begins, there is still a way to go with training and company onboarding before they are fully ready to take on their new role. Internal talent pools offer companies a selection of talent who is already entered into company HR systems, familiar with the work culture and educated on the brand and voice of the organization. Additionally, well built out talent management strategies include a way of assessing and validating the skills of your internal talent pools. With external candidates, you could be unsure of the skills they truly possess and can actively deliver on. This creates a higher risk that a candidate is unqualified for their role and won’t work out long-term.
Why Internal Talent Pools Are Important to the Future of Work
Talent pools are crucial to organizations who are prioritizing strategic workforce planning, succession planning or long-term recruitment. They are also a marker of top performing organizations. Research from Deloitte cites that roughly three out of every four high-performing talent acquisition teams regularly utilize internal talent pools. This is because internal talent pools allow companies to develop core competencies, skills and values that aren’t tied to a specific job role like in traditional succession planning alone. Leaders are able identify and communicate to top talent that they are the future of the company instead of telling an individual, “You are the next manager.” This helps leaders create a talent and succession strategy that is ready for whatever the future of their company or industry may hold.
To begin utilizing talent pools within your organization, see how TalentGuard, a skills workforce management platform, can help provide and organize all the needed data to successfully manage all your talent initiatives. Check out our platform page here or request a demo today!
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