Demystifying Open Talent Market Part I

In the past few years open talent market has been both a buzzword and a focus area for HR departments of relatively larger and multinational companies. Even though the name itself carries some connotations of openness, transparency and fairness; open talent market promises more.

In these series of articles, I will explain the underlying definitions of open talent market, introduce the prerequisites and cover the potential pitfalls.

There are slightly different names for the same concept, open talent market is the most suitable one for what it represents, but Internal Talent Marketplace or Open Market Economy are also used. The definition is simple:

Open talent market is mainly aimed for employees in the organizations rather than external talent. Some platforms give both internal and external talent matches, for the leader to benchmark and rank the candidates. Talent market algorithms use skills and experiences as their primary source of matching.

There are a lot of concepts to unpack there, and when I say that open talent market is a platform, it is by no means only the technology. I will come to that in a minute.

Now that we unpacked some of the concepts in the definition, we will move to more deeper understanding of the prerequisites of open talent market. And then, I will talk about the mid term impact of open talent market to employees and the organization culture.

Open Talent Market relies on skills and capabilities. The difference between skills and capabilities are best captured by Josh Bersin Academy:

For the sake of simplicity, I will use skills and capabilities interchangeably, but it is important for the reader to know that skills are more granular and capabilities are a slightly broader concept.

Within Skills, the concept also has a bifurcation, clasically known as hard skills and soft skills. Hard skills are used to describe technical skills needed to perform a role, Network Security, Social Media Channel Management, Database Administration, Drilling Machine Operation etc. Soft skills are people related behavioural skills like adaptability, relationship management, conflict management, influencing. Lately, soft skills were renamed to “power skills” to emphasise their importance to be successful in any given role. It is a rebranding rather than a content change.

Challenge 1: Designing organization wide standard skill taxonomy

Since open talent market software will use skills and experience to match the best fit internal employee to the task at hand, the algorithm and also the organization need a standard way of outlining the skills needed in every role. This is one of the most challenging tasks HR departments are facing now. Different units, leaders within a particular unit have a different take on what skills are needed in a role, and also have different wording to describe roughly the same skill. Power skills are easier to standardize and even buy ready from the market, however technical skills are more difficult to standardize in organizations with different business areas and a variety of product and solution portfolios. Another challenge is the short half life of a hard skill, that is now down to 18–24 months in some businesses, which requires constant update for those skill inventories.

A common approach is to have a defined dictinary of power skills company wide, and leave the technical skills to the interpretation of the leader and the unit, using sector standard terminology from the software or LinkedIn.

Challenge 2: Defining the proficiency level descriptions

Continuing the challenge of designing a standardised skill inventory, the proficiency level in any given skill should also be broadly defined so that assessment of the employees in that skill is more accurate and consistent. Some organizations use a generic level description like “novice, proficient, expert, master” leaving the interpretation to the assessor or the employee. Some companies put some more rigor and come up with more detailed definitions, only to refine the definitions every time skills evolve. There is no easy solution to this, as we will see also in assessment prerequisite.

Even if the organizations could find a way to have a standardized skills inventory (taxonomy), which is a big challenge on its own, the problem of assessing the skill levels of the employees still remains.

There are two different aspects of this problem, first is to determine if the employee / candidate has the specific skill and second is the determine if the level of the skill is at the required level. Here are some alternative ways organizations utilize:

a. Self Reported Skills: At the very basic level, companies let the employees define the skills and the skill levels they possess. Many companies put a control mechanism with manager approval for the reported skill and its level. Few companies put some more rigor in it and have a stakeholder / peer review in there. This is very similar to what we have all seen in LinkedIn skills. People could report themselves as having a certain skill and let their contacts vote. Needless to say, self reported skills are far away from being accurate and most of the time gets a rightful skepticism from the hiring managers.

b. Assessing Self Reported Skills: A more advanced approach to self reported skills are putting in place a simple assessment layer, where the software would ask you a set of questions and assess the level of your skill. LinkedIn is moving in that direction. Learning Management Systems (LMS) like Degreed are also putting in place similar assessments. They are simple and far from ideal, but makes the evaluation slightly more credible.

c. Skill Scraping Software: With the significant leap that the HR tech is making, a few startups are moving to the area of defining skills of employees from their already existing information. A good example to those companies is Techwolf, which promises to build a skills inventory for your company in eight weeks, scraping CV’s, LinkedIn profiles and job descriptions. The software use NLP (Natural Language Processing) and AI. Another advantage is that those solutions will be standardised and quick. As of 2021, these technologies are at their infancy stages. They are somewhat good at pinpointing the skills that a particular employee might have, but it is still nearly impossible to asssess the skill level of the employee. HR departments should not overestimate the power and accuracy of these software, but keep an eye on the few companies. This is a very promising field of HR tech.

d. Proper assessment tools and interview: Especially behavioural competencies are much easier to assess with standardised psychometric tools. The accuracy would be pretty high and the time investment will be under an hour from the employees. Some technical skills, especially for developers, also have standard assessment methodologies or software like Codility. However, most of the technical skills continue to be difficult to assess in an automated way, as they are specific to the companies and roles. In those cases, I advise organizations to use structured interviews from technical experts in the company. This fourth and last alternative to assess skills is the most investment heavy one, considering the time it would take from the organization.

Naturally, organizations will use a combination of these alternative solutions, I foresee significant progress in the second and third alternatives where software based fully automated assessments will be more and more utilised.

I have covered the fundamental definitions and concepts of open talent market in this first part of a series of articles. The main building blocks and also two most difficult challenges to tackle towards an open talent market are skills inventory definition and assessment of those skills, which I shed some light here as well. I will continue discussing other prerequisites in Part II of this series and mentions some of the pitfalls that the open talent market holds.

Burak Bakkaloglu

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