Your People, Your Potential
Let’s reimagine what your organization can achieve when people thrive. Discover how Virkware can elevate your employee experience and unlock the full potential of your workforce.
As an HR Leader, the benefits of adopting an internal talent marketplace are clear to you. But let’s face it, there are a multitude of initiatives and projects competing for a limited innovation budget.
In this article, we discuss how you can create a compelling business case that addresses the hard questions and the ROI metrics. We will discuss key components that you should include in your business case, along with some examples to get your thought process started.
There are 3 sections in this article:
It is tempting to think of business cases as something that’s largely financial or numerical in nature. Especially since senior management will often zoom in on the financial case when asked for approval. However, developing the non-financial part helps to establish a more robust target state while also helping provide data for a stronger financial case.
We recommend to focus on the following few key areas.
Start with analyzing and locking down the key improvement opportunities and pain points that the talent marketplace initiative would need to help with. We have listed a few standard challenges that you can tailor to your organization’s needs and business situation.
How does your organization’s industry context and business strategy impact the people strategy. Is it in a growth market with severe talent shortages? Is it facing significant disruption in industry competitive forces and requiring a mass re-skilling of its workforce? Understand the current context and your organization’s plan to compete in this context. Then analyze the possible ways that the internal talent marketplace can support the achievement of these objectives.
List down both the advantages and challenges in your current landscape. Perhaps your organization has a really strong internal mobility program or flexible work arrangement that employees love. Perhaps employees wish they could get more guidance in the form of mentoring and coaching. Think through how the internal talent marketplace can help to sustain the advantages and improve on the challenge areas.
Analyze the organization's skill gaps and future talent needs for key positions. Assess whether there are enough employees with the required skills and potential to fill critical roles in the future. Identify any succession planning challenges that may impact the organization's long-term sustainability. Or if you think that there is no reliable baseline of skills in order to determine the gap, capture that as an area that needs to be addressed
Gather feedback from employees through surveys, focus groups, or one-on-one interviews. Understand their perspectives on talent management, career growth opportunities, and things they either love or are frustrated with. Then analyze which of these could be potentially improved with an internal talent marketplace.
Assess the impact of digital transformation on the organization's talent needs. Consider your organization’s culture and track record in adopting automation, artificial intelligence, and other technological advancements. Think of the various capabilities of the talent marketplace and consider any phased rollout that may be necessary for increase chances of success.
Having completed the above analysis, you are now ready to establish the objectives and scope of your talent marketplace initiative.
Define the objectives of the talent marketplace and what your project aims to achieve. These objectives will guide the overall initiative and also drive the benefits and costs of this initiative. Some common objectives include:
Depending on your organization’s context and the talent marketplace solution you choose, you can address quite a number of the objectives above. We recommend though that you start with a few objectives balancing quick wins and impact.
It’s likely that most organizations will not have quantified baseline data around the above objectives. If that is the case in your organization, consider implementing a pilot of the talent marketplace. The pilot will generate data that can provide a well grounded basis for developing the quantified benefits and costs in rolling out the talent marketplace across the organization. The scope for your pilot roll-out should be focused on a well-defined and representative sub-set of your employee population taking into account:
You should plan for 1 to 3 months of pilot in order to get meaningful data that can feed into your case.
While this is an useful approach, this may not work for every organization. If you do not have the time for a pilot, reach out to other organizations or refer to publicly available case studies or white papers for data that you can tailor for your organization’s context.
Even though the HR function is likely to sponsor and drive the talent marketplace initiative, you will need to get the buy-in of all teams across the organization. Given that talent marketplaces are designed as being employee driven and focused on engagement and career development, stakeholders are more likely to have a strong view on talent marketplaces. Hence it is important to start engaging quite early with stakeholders across the organization and gather feedback and garner support.
You could start by identifying the executive sponsors, the key stakeholders who will be involved in your pilot roll-out, and the time and resources demanded from them. Ideally this section should also contain details about the project steering committee and a governance framework for decision making.
Test your objectives, proposed benefits, roll out approach and resource requirements with the stakeholders for their feedback. Incorporating this into your business case and / or eventual pitch will leave you better prepared to handle objections during the decision meeting.
At this stage, your plan as well as business case is built on projections - some reliable and some not. It’s worthwhile to build in a continuous evaluation mechanism to test the health of the internal talent marketplace especially as it relates to adoption and effectiveness.
Describe mechanisms for gathering feedback from users and how this feedback will be used to make continuous improvements to the platform. Here are some key actions that you will need to adopt and include:
Doing this exercise will also help you assess the talent marketplace solution for their analytics capability. And you could also ensure you build in a process for product enhancements over time that will help to increase adoption and effectiveness.
The financial part of the business case will cover 3 elements - the benefits, the cost and the return on investment (RoI).
We need to be able to quantify the positive financial impact of the benefits that will be realized through the talent marketplace. The quantifiable benefits typically cover the following:
Empowering employees to achieve their aspirations, democratizing access to mentoring and increasing connectivity with their colleagues leads to increased retention. Typically, expect that the average attrition rate will reduce by 15%. If, for example, the current attrition rate is 16% - you can model a decrease to 14%. You can assume that the cost associated to replace one employee is around 50% of their annual salary. Using an average annual salary assumption for your employees, you can quantify the impact of reduced attrition
Short term external hiring can be reduced by enabling managers to source available capacity anywhere across the organization. Strong internal mobility enabled by the talent marketplace can help fill some of the open roles with internal staff and reduce the need to hire externally. Start with the current baseline costs associated with the above and model a % improvement based on relevant assumptions, references and / or the pilot.
The talent marketplace will help to drive productivity gains across the organization. The skills framework and hands-on learning promotes up-skilling which will improve average employee productivity. The gig marketplace will allow the best resources to be assembled to execute business topics. Finally talent management teams and managers can reduce some of the manual workload (for e.g. skills matching, mentoring, succession planning, progress reports) resulting in productivity gains.
In addition to the above, there are other benefit areas that can be explored
With the talent marketplace, there is greater visibility and connectivity in your internal talent network. Hiring managers and their talent acquisition partners will be able to source candidates faster to fill open roles. The main benefits here is increase in productivity.
Metric: Average time to fill job openings from the posting date to the candidate's acceptance.
The internal talent marketplace can help employees increase their network within the organization and establish deeper connections with colleagues sharing similar interests, values and / or experiences. Also, the on-demand pulse capabilities can help managers to take proactive action in addressing employee concerns
Metric: Employee engagement score
Metric: Number of identified high-potential employees and their readiness for critical roles
Metric: Number of key roles with identified successors
Innovative & game-changing ideas see the light of day more often. This would result in new opportunities for revenue growth and cost savings
Metric: Number of innovation initiatives across the organization
Creating a cost analysis involves identifying and estimating all relevant expenses associated with building and operating the platform.
Common cost categories include:
Work with relevant stakeholders and teams to gather cost estimates for each category. Consult with IT experts, software developers, vendors and other department heads for inputs and reasonable estimates. Categorize the costs as:
Total Cost of Ownership (TCO): Calculate the Total Cost of Ownership by summing up the one-time setup costs and the projected annual operating costs over a specific timeframe, typically three years. The TCO provides a comprehensive view of the long-term financial impact of the internal talent marketplace.
Finally, quantify the potential return on investment (RoI) for the internal talent marketplace. The RoI is calculated using the benefits and the costs calculated above.
Here's a sample RoI calculation:
Assumptions:
ROI Calculation:
Benefits over 3 years:
Costs over 3 Years:
Calculate RoI:
In this example, the calculated RoI for the internal talent marketplace is 77%. A positive RoI would indicate that the benefits outweigh the costs over the 3-year period.
Depending on the benefits and costs you estimate in your model, the RoI could be positive or negative. It's important to note that RoI is just one aspect of the business case. There may be other intangible benefits such as improved employee satisfaction, better workforce agility, enabling a startup culture that contribute to the overall value of the talent marketplace.
Additionally, as the marketplace matures and adoption increases, the RoI can improve over time. When presenting the RoI calculation in the business case, make sure to provide a clear breakdown of the costs and benefits. This will provide a more comprehensive and insightful perspective on the financial viability of the internal talent marketplace.
Implementing an internal talent marketplace comes with a unique set of risks and challenges. Recognizing these risks and proactively developing mitigation strategies will be crucial for the successful adoption of your project. In this section, we have identified three common risks and corresponding mitigation strategies.
Employees (including hiring managers) may resist using the talent marketplace due to a fear of change and a perceived loss of control. The initiative may also be met with skepticism about its effectiveness.
Mitigation Strategy:
Engage stakeholders early: Involve employees in the planning and development process. Seek their input, address their concerns, and communicate the benefits of the talent marketplace.
Super user network: Create a network of super users across the organization and involve them right from the preparation phase. They will be the evangelists who will attract other users to join and engage on the platform
Provide training and support: Offer comprehensive training to ensure that employees understand how to use the platform effectively. Offer ongoing support and assistance.
The talent marketplace may not gain enough traction, leading to under-utilization and eventual failure to deliver the expected benefits
Mitigation Strategy:
Preparation: Prior to launching the talent marketplace to a wider user community, generate engagement activities on the platform. That way, users will have the ability to engage with each other as soon as they are onboarded
Marketing and communication: Develop a comprehensive internal marketing strategy to promote the benefits of the talent marketplace to employees and managers. Regularly communicate success stories and best practices to encourage adoption.
Incentives and Recognition: Offer incentives or recognition programs for employees who regularly participate in the talent marketplace, such as referring colleagues or mentoring others.
Employees may not possess the required skills or qualifications for the opportunities available on the marketplace, leading to disengagement with the platform.
Mitigation Strategy:
Skill development programs: Offer training and development opportunities to help employees acquire the necessary skills to be competitive in the marketplace.
Transparent requirements: Ensure gig / project / job postings on the marketplace clearly outline the required skills and qualifications to avoid mismatches.
Leverage analytics: Check that the platform is able to provide real-time insights to the talent teams so that they can
A well-structured and data-driven business case is essential to gain support from decision-makers and secure the necessary resources for building an internal talent marketplace within the organization. We hope that this article has armed you with the key points to help you make a strong case for the investment into a talent marketplace and express confidence in its potential success.
Let’s reimagine what your organization can achieve when people thrive. Discover how Virkware can elevate your employee experience and unlock the full potential of your workforce.
