A majority of companies around the world—87 percent to be exact—are already experiencing a skills gap or expect to have one within a few years. As a result, employers are struggling to find workers with the skills they need. 

What’s one of the most underrated solutions to fighting skills gaps and filling empty roles? Internal talent pipelines. 

Studies have shown that over 60% of future roles can be filled internally. Yet, when it comes to hiring, companies tend to look outside of their organization. Whether it’s due to urgency or the lack of internal candidates with the right skill set, the results are often the same: internal employees get left in the dust.

But internal talent pipelines don’t just help fill open roles. When utilized properly, they can help boost overall business performance and lead to future success—for you and your employees.

Table of Contents

1. What is an internal talent pipeline?
2. What is a talent pipeline?
3. Benefits of an internal talent pipeline
4. Considerations before building an internal pipeline strategy 
5. Creating an effective internal talent pipeline strategy
6. Picking the right talent pipeline tools

What is an internal talent pipeline?

An internal talent pipeline is a group of employees who are ready and qualified to step into new positions within the company.

Internal talent pipelines are typically made up of high-performing and high-potential employees who already work for the organization. The goal is to prioritize filling roles internally instead of looking outside of the organization.

These employees are then mapped to potential future roles—whether they’re new roles that are created as the company grows, or existing roles that will need to be backfilled. Internal talent pipeline strategies also include processes to upskill and prepare employees to step into those roles when the time comes.

But an internal talent pipeline doesn't just nurture employees looking to climb to the next rung of the career ladder. It can also include employees looking to make lateral moves between departments or across the organization.

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Of course, internal employees only make up a part of your overall talent pipeline.

What is a talent pipeline?

A talent pipeline is a group of candidates who are qualified, engaged, and ready to fill future open roles within your organization,

Unlike an internal talent pipeline, this pool can include individuals who don’t already work for your company. (A.K.A. external candidates.)

Talent pipeline strategies help open conversations and build relationships with top talent in the workforce. These candidates are already vetted and show potential for future opportunities. Nurturing those relationships in advance makes it easier to activate candidates and attract them to your organization when the right role becomes available. 

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While candidates in your talent pipeline may not be hired right away, they’re still an important part of your hiring funnel.

Benefits of an internal talent pipeline

Overall talent pipeline strategies are great solutions for improving your hiring practices. But investing in internal talent doesn’t just help you fill roles, it can also improve your employee experience and boost your bottom line.

1. Internal talent pipelines support employee career pathing 

Career pathing puts a formal plan in place for employee learning, development and professional advancement with the goal of helping them reach their long-term career goals.

With rapidly changing organizational structures, modern career pathing can be somewhat complex. But internal talent pipelines offer visibility into future opportunities for employees, making the exercise of career pathing a little easier.

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On the other hand, organizations can’t effectively curate an internal talent pipeline without insight into employee goals and development plans. This forces organizations to make both career pathing and internal pipeline strategies part of their resource management—empowering employees and building better-performing teams.

2. Internal talent pipelines play a role in succession planning 

Companies tend to fall into the trap of asking “What roles do we need to fill now?” instead of “What roles will we need to fill in the future?” This creates a vicious cycle of constantly scrambling to fill roles as they open up.

When your hiring needs are immediate, your options become limited. You’ll need to hire someone who A) already has the skills you need and B) is willing to make a change in their job. 

The perfect last-minute candidate can be expensive. Or on the other hand, you back yourself into a corner and end up hiring a less-than-ideal candidate.

That’s why the most successful companies engage in long-term workforce or succession planning. This includes looking at future organizational goals through a strategic lens, anticipating any potential skills or resource gaps and then creating an internal pipeline that can fill those needs.

Think of succession planning as career pathing but for the business as a whole.

3. Internal talent pipelines boost employee retention rates

Over half (57%) of employees find it easier to find a job elsewhere than in their own company. When employees feel like there’s no future for them at an organization, they’re likely to jump ship.

By establishing internal talent pipelines, you demonstrate your commitment to employee growth and development. It also makes it easier for you to prioritize internal mobility.  When employees feel like there are opportunities for them and that you’re investing in their careers, 94% of employees are more likely to stay with your organization.

4. Internal talent pipelines promote a culture of employee development and mobility

57% of employees feel that they are being overlooked for potential leadership positions. This tends to happen when employees constantly see roles being filled by external candidates. 

Having an internal talent pipeline strategy boosts your chances of filling positions from within the company. It also reassures your team that you're dedicated to giving internal candidates a fair shot rather than defaulting to external hires.

Plus, you’ll build a reputation for internal growth. You’ll have a solid track record of employee development and internal promotion, so when you do need to hire external candidates, you’ll stand out from the competition.

5. Internal talent pipelines improve your talent acquisition efficiency and performance

Internal talent pipelines can also help your HR and talent acquisition teams reach their hiring goals.

According to research from Deloitte, 3-out-of-4 high-performing talent acquisition teams regularly tap internal talent pools, as compared to only 13 percent of low-performing talent acquisition teams.

Internal hiring makes it possible for teams to hire better talent for less.

Hiring and onboarding external candidates can cost up to 1.7x more than an internal candidate. Internal candidates are also more likely to succeed in their new role, so hiring internally means you’re less likely to find yourself back on the hiring treadmill in a few months.

Considerations before building an internal pipeline strategy 

The clear benefits of an internal pipeline strategy might make you want to dive right in. But like most other strategies, there are some questions that should be answered to make sure you’re maximizing your impact.

• Who is responsible for managing your pipeline? You need someone (or a team) who is accountable for the outcomes of your strategy.

• How will you get buy-in from leadership? Everyone needs to get on board. Otherwise, leaders and people managers can intentionally (or unintentionally) end up being roadblocks in the process.

• How will you identify talent for your pipeline? While all employees benefit from development, your talent pipeline selection process needs to be fair and equitable. Otherwise, you run the risk of leaving underrepresented and diverse employees behind.

Creating an effective internal talent pipeline strategy

Creating an internal talent pipeline isn’t just about promoting internal employees. 

There are several steps and considerations before you can create a talent pipeline that helps you reach your future company goals.

1. Identify potential future opportunities

In a perfect world, we’d be able to create and offer every employee their dream job. But the reality is that every role in your organization needs to support your overall business strategy.  

When looking at future roles, you need to consider the core competencies that are needed to meet your organization’s goals.This includes prioritizing the most important roles and the timelines for when these roles need to be filled.

2. Understand individual employee goals

Gone are the days of the linear career path. Every employee has unique goals and an evolving list of potential career paths. What’s more, you can’t assume everyone wants to climb the career ladder. Make sure you sit down with employees early and often, so that you can better understand their career goals.

This offers a starting point for you to keep employees engaged and craft opportunities that will keep them satisfied with their career progress.

3. Identify skills gaps

Internal talent pipelines can help match employees with current open positions. But more often than not. they’re used to prepare your current employees for future opportunities. In many cases, you might identify employees who have the potential for future roles but aren’t quite there yet.

Internal talent pipelines are designed to close these skill gaps. But that doesn’t happen overnight. The right internal talent pipeline strategy helps you identify those areas of opportunity in advance. This way, you have time to create a development plan and prepare employees to take on future roles when opportunities open up.

4. Invest in an employee learning and development plan

The next step is to develop a plan to close any skill gaps that could prevent employees from stepping into their next role. 

Every learning and development plan is unique but might include:

• Skill-specific training programs
• Mentoring and coaching from experienced leaders
• Projects and stretch assignments

There’s often a misconception that investing in individualized employee development is expensive, leading to leaders resorting to hiring employees who already have the skills in place.  

But the truth is, you can save anywhere from 70-90% by upskilling a current employee instead of hiring a new one—even after factoring in the cost of development. And with a community-driven approach to career development, learning and development becomes second nature among employees.

5. Measure progress and track the impact

Fostering internal talent pipelines isn’t always easy. It requires significant resources on behalf of your organization and a commitment from your employees.

It’s important to keep a pulse on your progress to make sure everyone is on the same page and headed in the right direction.

For employees who are in your internal talent pipelines, schedule time to check in on their progress and provide updates on their development outcomes. Be clear about timelines and rates of improvement so that you’re setting realistic expectations. 

Otherwise, if employees aren’t reaching their goals or it’s taking longer than expected, they can lose interest, undoing the positive impacts of including them in an internal talent pipeline.

But internal talent pipelines aren’t just about individual employee development. A successful strategy should move the needle for hiring and employee experience. Some talent pipeline metrics to measure include:

• Time-to-fill: Is it taking less time on average for you to fill open positions within the organization?

• Employee mobility: What percentage of your employees are making internal role changes?

• Employee retention rates: Are you experiencing higher retention rates and lower turnover?

• Diversity and representation: Are you increasing diversity and representation in your workforce, particularly at the management level and above?

Taking the time to review and assess this data can help inform your decisions and identify if your internal pipeline strategies and initiatives are headed in the right direction.

Picking the right talent pipeline tools

Creating talent pipelines isn’t always easy—if it were, everyone would be doing it. Fortunately, the right tools can help you deploy and manage talent pipelines at scale.

• Mentorship: Your employees have potential but sometimes they need a bit of help to unlock it. Mentors can support your talent pipeline with everything from skills development to advice and support, so employees can make the most of their careers. 10KC helps you create unbiased mentorship matches for your talent pipeline in just a few clicks.

• Sponsorship: Take mentorship a step further with an employee sponsorship program. Sponsorship programs empower leaders within your organization to create opportunities and advocate on behalf of junior talent. Whether it’s skills development or recommending talent for a promotion, sponsors play a key role in uncovering hidden talent within your teams.

• Structured development experiences: Your team deserves tailored opportunities to help them succeed. From upskilling frontline staff for corporate roles to helping people managers lead with confidence, 10KC’s targeted development programs are designed to give your internal talent the resources they need to advance their careers.  

• Data and insights: Internal talent pipelines have a lot of moving pieces. As with many things, data can help you make better and more informed decisions when managing your internal talent pipeline. 10KC’s Data Dashboards help you measure your program’s success and make decisions in real time.

• Centralized solutions: Your team is busy, the last thing you need is more platforms. 10KC offers everything you need to build a pipeline of future leaders all in one place. Plus, we’ll bring it right to you by integrating seamlessly into the tools your team uses every day.

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Internal talent pipeline FAQs 

What is an internal talent pipeline?

An internal talent pipeline is a pool of internal employees who are ready to fill future roles within the organization. These may consist of net new roles or existing roles that need to be filled.

Internal talent pipeline strategies go beyond simply filling vacant roles. They also put a plan in place to identify skills gaps and development opportunities, creating a group of engaged employees who are prepared and qualified for future roles.

What are the benefits of an internal talent pipeline? 

There are many benefits to creating an internal talent pipeline, both for your employees and your organization. Some benefits of internal talent pipeline strategies include:

• Faster and more streamlined hiring and onboarding processes.
• Improved succession planning and skills gap analysis.
• A culture of internal mobility and employee development.
• Higher rates of employee retention and engagement.

How do you build an internal talent pipeline strategy?

There are 5 key steps to building an effective internal talent pipeline strategy:

1. Identify potential roles and opportunities based on your organization’s goals and future needs.
2. Work with individual employees to identify their career goals.
3. Assess and address skills gaps of employees in your existing pipeline.
4. Invest in employee learning and development to help close those gaps.
5. Measure employee progress and track key metrics including time-to-fill, employee retention, and internal mobility rates.

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