Feature
The economy and budget pressures have pushed the labor market in favor of employers, leading workers to stick with their current company. As a result, managers and executives are looking for ways to better use their existing workforce. This has put a spotlight on internal talent marketplaces.
For years, employers regarded internal talent marketplaces as a useful component of their workforce strategy. HR leaders typically saw them as one of several tools, not one that could drive transformation on its own.
Increasingly, companies are turning to internal marketplaces to orchestrate work, rather than identify skills and opportunities.
Why Internal Talent Marketplaces Haven't Scaled
Lack of Skills Data
Organizations struggle to compile accurate, complete pictures of their workforce's skills. Companies want to understand what employees can do, what they’ve already done and what they could do in the future. Doing that requires data but, according to Deloitte’s 2024 Human Capital Trends report, few businesses have good enough data to drive effective matches.
Marketplaces aren’t perfect. They usually rely on self-reported information, job titles and incomplete HRIS records. At the same time, employees tend to update their profiles occasionally or not at all. Skills taxonomies tend to be static and not aligned with real work. The result has limited the potential impact of internal marketplaces.
Poor Adoption
Internal marketplaces have also struggled to achieve critical mass. While HR teams were excited and employees were curious, managers participated only inconsistently and often resisted posting opportunities. In fact, research from the Harvard Business Review found that talent hoarding is one of the biggest obstacles to internal mobility. Managers fear losing their top performers, but when they don’t post opportunities, marketplaces offer little value to either employers or employees.
Misalignment With How Work Operates
There is also the issue of practical alignment with the real world. Marketplaces often emphasize discrete projects, gigs or open roles. But internal work rarely organizes itself so neatly. A manager might need several hours of data cleanup, a sprint team member for a quarter, or a subject matter expert for two weeks. None of those neatly fit into a job description or even a limited project. Marketplaces often sit outside core collaboration and workflow tools, according to Gartner.,
For all the stories about marketplaces helping with employee retention or project timelines, many companies struggle to realize a lasting, program-wide return. Productivity gains are real but scattered. Mobility increases, but not at a meaningful scale. And as businesses tighten their budgets, such tepid results are hard to justify.
Today a new set of dynamics is developing that could reinvigorate taking advantage of internal labor. Generative AI, agentic workflows and increasing pressure for productivity are dissolving many of the earlier barriers and reshaping what internal mobility means.
The Next Step for Internal Talent Marketplaces
Large language models generate richer skills indicators based on actual work. They tease out an employee’s skills from documents, work samples, communications, performance data, learning histories and manager feedback. IBM's research found that although less than 50% of organizations trust the skills data they have today, AI-based tools significantly improve its reliability and timeliness. Other vendors, such as Eightfold AI, have published similar findings: skills inferred from work are more accurate and more dynamic than manually maintained profiles.
Another shift involves agentic AI, meaning systems that go beyond generating recommendations and carry out multi-step tasks. So, a system might parse a manager’s upcoming goals, break work into component tasks, estimate skills needed for each task and propose a staffing plan based on internal teams. Instead of managers posting projects themselves, agents detect emerging needs and identify relevant talent before a role or request is formally defined.
Finally, businesses now feel pressure to increase output without growing headcount. Productivity is among executives’ primary concerns, according to PwC’s 2024 CEO Survey. Gartner sees “effective talent utilization” as a core HR agenda item.
All of this hints at internal talent marketplaces evolving into something broader: a real-time workforce “operating layer.” The first round of internal talent marketplaces provided visibility and matching. Experts say the next round will deliver dynamic allocation, continuous optimization and an arrangement of work that reflects how teams actually operate.
Proactively Suggesting Work Opportunities
The result is the idea of a centralized internal talent marketplace is dissipating. Instead of going to a platform to search for opportunities, employees and managers will rely more on tools they already use to accomplish the same results. For instance, a developer using Microsoft Teams might receive an opportunity based on recent coding efforts. A vice president reviewing quarterly goals may see models showing where internal skills shortages will bottleneck progress and where lateral talent moves could mitigate risk. All of this indicates that internal mobility will become more of a proactive, rather than a reactive, proposition.
Internal mobility initiatives require secure data, governance frameworks and integration between HCM and collaboration platforms, and a continuous tuning of skills ontologies. The manager’s role will also evolve. Instead of being gatekeepers, managers will become more like orchestra conductors. They will need incentives that encourage mobility, such as metrics tied to talent development, internal placement rates and performance. Businesses that reward flexibility and invest in manager development will be the winners here.
For employees, internal mobility will feel more personalized and more continuous. Instead of browsing opportunities, they will receive tailored nudges, development pathways and suggested roles tied to their work. The system will help them not only understand what skills they have, but also what skills they could build through experiences. It might recommend rotations or assignments that strengthen their career paths.
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Going forward, internal mobility will be driven by richer data, better integration and AI that participates in a company’s workflows. HR and company executives must decide how internal mobility will integrate into work, how AI will influence workforce planning, how governance will support transparency and trust and how organizations will align incentives around more dynamic, skills-based deployment.
Internal talent marketplaces are moving beyond the idea of being a platform and into the structure of everyday work. As technology matures and corporate expectations shift, companies that succeed will be those that treat mobility as an operating principle powered by data, design and intelligent systems.
Editor's Note: Catch up on more takes on talent mobility below:
- AI Is Moving Skills Management Out of Spreadsheets and Into Action — Skills shape hiring, learning and knowledge management, but efforts are often fragmented. Can AI-powered solutions finally fix how organizations manage skills?
- From Ladders to Lattice: How Careers Can Engage and Retain Employees — Outdated career management practices and career ladders no longer suffice in our dynamic work environments. Career lattices offer an alternative.
- How 3 Companies Use Talent Marketplaces to Close the Skills Gap — Skills gaps are real — and only getting bigger. Here are three companies investing in internal talent marketplaces to close the gap.
