· Features

In-house recruitment: Don't overlook the talent in your own organisation

When it comes to filling vacancies, employees whose talents may have been overlooked can often be a better and more cost-effective bet than external candidates, writes Steve Hemsley.

In 2007 an octopus was hauled onto a fishing boat 60 miles from Seoul with 12th-century Chinese pottery attached to its tentacles. The find has been described as one of the greatest undersea discoveries of modern times and shows how hidden treasures can turn up in the most unexpected places.

Employers struggling to recruit people with the skills they need ought to be able to learn from this story. Unearthing existing talent can be a powerful and cost-effective solution when it is difficult to fill important roles because, according to research consultancy the Work Foundation, employers are already squandering their workers' talents. Its Knowledge Workers and Knowledge Work report claims 40% of employees have more skills than their jobs require and 20% of graduates feel they are in jobs requiring a low level of knowledge.

"Trapping workers in roles in which their skills and abilities are poorly matched with their jobs is a waste of economic potential and human possibility," says co-author Ian Brinkley.

Middle managers are one source of talent being under-used. Strategic management consultancy Cognosis Consulting believes they should be encouraged to provide insight into areas of the business they are unfamiliar with. "Managers have different thinking styles and most are willing to be challenged and to get involved in wider strategy decisions," says managing partner Richard Brown.

A common problem for businesses is that their talent pool is too shallow and focuses too much on top performers. Maria Yapp, director of talent specialists Xancam, cites a technology company that was struggling to recruit strategic account managers to run multi-million pound accounts. This role was crucial if the company were to retain clients and break into new markets. "We worked with the company to see who internally might be suitable," he says. "Between us we agreed individuals did not need experience, they just had to demonstrate they could do the job with proper training and coaching."

The company used Xancam's Xpotential talent management tool which employs coaching and psychometric testing to identify the needs of the business and match those with the aspirations of employees. The client achieved a 60% reduction in recruitment costs for its posts, a 10% sales increase and a 54% jump in customer satisfaction.

According to Rose Bevan, head of resourcing and talent management at design and engineering services group Mouchel, when the company switched to looking for the talent it had within, it was more than pleasantly surprised. With over 11,000 UK employees working for public and private-sector clients, it was struggling to fill divisional director, manager and team leader roles.

Mouchel now uses e-recruitment software by StepStone. This also takes staff through capability and performance assessments, which help with succession planning. About 200 Mouchel employees a year go through its Total Talent programme. "Now people realise they might be only a few months of training away from filling one of our key roles," says Bevan. The company says it has saved £4 million in recruitment costs since 2006.

It was StepStone that commissioned the Economist Intelligence Unit to produce a report on the state of talent management. In the resulting study, which questioned 484 senior executives last November and December, 36% said redeploying talent into different roles or offices was vital to future success.

Jim Cassidy, chief marketing officer at StepStone, says at a time when directors are concentrating on the bottom line, HR professionals can battle to remain strategic. "Organisations must discover much earlier what skills their business needs," he says. "Is the company entering new markets? If so, who already has the language skills or market knowledge that would be useful?"

The Co-operative Group is also using talent management software, signing a six-figure contract with software company Bond International. The Bond system has an online search facility to identify suitable internal candidates. A pilot scheme ran in the food division last year and the programme is being rolled our across the entire Co-operative Trading arm, including funerals, pharmacy and travel.

Many companies are also investing more in coaching and mentoring. Tim Hawkes, managing director of leadership development company Unlimited Potential, says: "An effective mentoring programme gives people the opportunity to excel and the freedom to experiment. How else will you find out who would be good at different tasks?"

Strategy leaders must be confident enough to delegate tasks. But Chris Howe, managing director of ChangeMaker International, a consultancy dedicated to developing potential, says managers should not be obsessed with doing jobs themselves in case things go wrong. "Someone may not do a job as well as you the first time but after a while they will do it better than you."

He says companies should create a pipeline of talent based on the skills and internal business relationships that exist and how both are applied in the workplace. "People learn from different situations and the secret is to spot individuals who are hungry to learn and are proactive in their self-development."

Research by think tank Tomorrow's Company warns against focusing solely on the top layer of talent, who could actually be to blame for a company's current difficulties. Its study, Tomorrow's Global Talent - How Will Leading Global Companies Create Value Through People?, says organisations must look closely at how they define talent, what more they can do to engage it and ensure talent management rises up the leadership agenda.

Tomorrow's Company CEO Tony Manwaring says: "It is important to maintain a community of talent and hold on to it so you can re-employ it when the upturn comes and employees work with passion and loyalty. Older workers might have an understanding and knowledge of the market that is not being utilised, while younger workers may have some fresh ideas."

Michael Jenkins, CEO of the management development consultancy Roffey Park, is a former vice-president, Asia Pacific, for the Center for Creative Leadership. He says encouraging people to step forward to fill skill gaps helps everyone to think about their strengths and to challenge themselves.

"Short-term projects where people are required to cross over functional lines so they work with people they do not usually have contact with can be a low-risk method of revealing how versatile people are," suggests Jenkins.

It can also be an effective way to discover some real hidden gems.

Hyatt Hotels and Resorts

Hospitality business Hyatt Hotels and Resorts is using its recruiting technology to discover, develop and retain talent within its organisation of 70,000 employees in 40 countries. It works with on-demand talent solutions supplier Taleo to find students to work in its hotels and provide structured careers in hotel management.

Hyatt felt it was not getting the cream of college talent, especially in North America, because many students found the application process cumbersome. Hyatt also relied too heavily on campus visits where it met with hundreds of students who its HR team had not had a chance to assess.

Taleo created a Career Preference Portal so any student can fill in an application and be screened before a campus visit. This helps the HR team decide who might be suitable for operational, management and customer service roles and who, with training, could benefit the business over the longer term.

Hyatt wants to retain its managers and the Taleo system enables its HR teams to share information on which managers want to move geographically or change careers. The technology also allows employees to enter and update their skill-based profiles.

"In a knowledge-based economy, keeping track of talent is crucial for operational growth," says Randy Goldberg, vice-president, recruiting for Hyatt. "The Taleo system brings different skills to different parts of the business."

Chris Phillips, VP of international marketing at Taleo, says the Hyatt experience is an example of where technology can unite the entire talent management system, including recruitment, internal mobility and succession planning.

"Companies can monitor the talent they have because building an employees' profile starts when a person is hired and should be added to at every appraisal stage," says Phillips.

Nurturing sales teams

Identifying and nurturing talent in a sales team is vital for any business, and a new book calls on line managers to do more to develop sales reps.

Peter Brook, author of Turn Your Sales Force into Profit Heroes, made his name as a consultant in the consumer goods sector and spent eight years at Diageo.

He says managers must be passionate and accountable for the development of their people and that structured leader-led coaching and training is essential. Poor succession planning means there will always be a dip in the performance of a sales team whenever a member leaves.

"I assess the level of skills required in an organisation and equip managers to make the most of the capabilities of their people," he says. "But everyone develops skills in different ways so managers need to create a core set of standards and then get the right level of skills development."

He cites the example of work he carried out for drinks brand Heineken across Eastern Europe, where different languages spoken within the sales force were making the team less effective. Talented individuals were also difficult to retain because, with so many national sales territories, employees felt it was difficult to build a career in the business.

"We set up account management standards and developed a team of master trainers to implement them in each country," says Brook. "They trained the area managers and the return on investment was measurable. The average sales person's skill level rose by 20%, there was a jump in sales and a 32% improvement in retention levels over an 18-month period."