A volatile labour market and rapidly changing skill needs are making it harder for businesses to keep pace with the workforce capabilities needed to perform and grow. This is forcing organisations to rethink their approach to future skill requirements.
Gartner research found 59 percent of HR leaders believe skill needs are evolving faster than their organisation can keep pace, creating growing pressure to build workforce capability in new ways.
The instinctive response is often to hire. When a gap emerges, bringing in external talent can feel like the fastest path forward. However, this approach is becoming harder to sustain, and the traditional recruitment model is becoming less reliable. Poor hiring decisions can affect productivity, customer relationships and team performance.
At the same time, attracting external talent remains costly, with 90 percent of talent management leaders agreeing that losing critical expertise creates a significant expense to fill the gap.
While many leaders focus on searching externally, they often underappreciate the opportunity that already exists within their own workforce.
Current employees are a known quantity. Their strengths, work ethic, adaptability and cultural fit have already been tested. They understand the business, customers, the way work gets done and, more importantly, have the potential to fill gaps that are difficult and expensive to source externally.
Developing and redeploying talent from within can be one of the most effective ways to build capability and strengthen workforce resilience.
Stop searching for unicorns
When businesses identify a capability gap, the natural tendency is to define exactly what the ideal candidate looks like. Job descriptions become an exhaustive wish-list of desired skills and hiring managers look for someone who can meet every requirement.
The result is an increasingly narrow talent pool. By focusing on finding the perfect match, businesses risk overlooking individuals with the potential to deliver impact immediately while growing into the more complex aspects of the role.
Instead, HR leaders should identify the fewest critical capabilities required for success and place greater emphasis on finding individuals with adaptability, the ability to learn quickly and apply existing skills in different contexts.
Unlock the hidden talent pool
Building capability often starts with recognising talent, even when candidates don't appear to be an obvious fit on paper.
Gartner research found the talent pool can increase by up to 82 percent when organisations consider an employee's willingness to move and eagerness to learn, rather than focusing only on existing skills.
Not only can this broader pool shorten time-to-fill, but internal transfers can also achieve productivity more quickly than an external hire as they come with so much organisational knowledge already. More importantly, lateral moves enable employees to develop broader enterprise-wide skills and experiences, making them more valuable employees and future leaders.
This broader view helps organisations to close capability gaps faster, in many cases with internal talent they simply haven't been recognised yet.
Remove barriers to movement
Even when capable employees are identified, internal mobility doesn't happen automatically.
Moving into an unfamiliar role can feel risky for many employees and raises their concerns about performance and career progression. Barriers can also emerge at a leadership level, as managers want to retain individuals who have a significant impact on team performance.
As a result, capable employees can remain stuck in place, even when opportunities exist elsewhere in the organisation.
Gartner research found 86 percent of employees would trade higher pay for stronger career opportunities. At the same time, employee intent to stay has declined recently, creating a risk that organisations lose capable people to external opportunities because they didn’t find internal ones for them.
Creating visibility around growth opportunities can be a powerful retention tool. When leaders actively support mobility, they create a more agile workforce and give employees a reason to build their future within the organisation.
Build capability from within
The good news is organisations have greater access to talent than they realise. By focusing on learning agility and the skills that are common across roles rather than unique to them, capability can be built faster with internal talent.
The organisations that succeed won’t necessarily be those hiring the most people. They’ll be the ones better at identifying lateral potential, developing capability and matching existing talent to emerging opportunities.
Before searching externally, take a closer look at the talent already within the organisation. The next critical capability may not need to be hired; it may just need to be developed.
Jonathan will be presenting at the upcoming Gartner HR Symposium/Xpo in Sydney, 16-17 November