The internal talent marketplace

No question, labour market shortages are a pressing issue for many Canadian companies. The demand for skilled workers will continue to be disruptive to essential services—especially across health care, manufacturing and infrastructure—and could constrain longer term growth and innovation.

One suggestion to create more capacity and improve worker productivity is to create a more dynamic talent model through an “internal talent marketplace.” A small handful of companies have implemented this type of workplace, and the concept has been widely discussed and debated.

In this post, I want us to dive into the concept’s promise—and its pitfalls.

The what
As a quick summary, an internal talent marketplace is a technology-enabled system that links employees to opportunities or projects. At its simplest, the talent marketplace creates mentorship programs, peer connections, supports talent development through projects that align to an employee’s career goals, or enables upskilling by providing experiential learning opportunities in other areas of the business.

More dramatically, a talent marketplace could change the workplace structure from a traditional, role-based organization to a series of dynamic, project-based teams. An internal talent marketplace has the potential to increase efficiency, break down silos, and respond quickly to the market and other external pressures.

For most workplaces, a talent marketplace would be transformative.

Creating a boundaryless business model, where employee knowledge and skills are used across the organization, would fundamentally change the talent model. No more org charts, hierarchy or long-term roles—the idea is to create agility.

Implementing a talent marketplace is not, however, a quick win. It requires a significant up-front investment in technology and organizational resources. Before making the investment, you should understand and identify the operational and legal risks.

The why
It’s easy to understand the buzz around this idea, as it has the potential to address talent gaps without requiring additional headcount. A well-designed talent marketplace will connect employees to opportunities, quickly find internal talent and redeploy employees between teams to meet critical deadlines.

There’s a “but,” though – it only works if you can recruit and retain employees who want to work this way, which means you need their buy-in.

Employees will get excited about a dynamic and flexible workplace only if they see the opportunity in it—increased autonomy, new skills, and access to opportunities to earn a better, more stable livelihood.

The purpose of a project-based workplace should be to create opportunity, not further inequity. Not all employees will be interested in continuous learning and change. If the only employees who thrive in a talent marketplace are those with the economic security, flexibility and bandwidth to continuously challenge themselves, diversity at the workplace will suffer.

To counter these risks, the talent marketplace could be designed to offer fair access to opportunities, address bias and ensure there is continued accountability for inclusion, diversity and belonging across the organization.

Implementing a talent marketplace requires a significant up-front investment in organizational design, technology and processes. The transition from a traditional, hierarchical workplace to a project-based team will take patience, time and extensive change management.

And, before making this investment, it’s important to understand and mitigate a number of legal implications.

Risky business
I have to admit, when I first heard about internal talent marketplaces, I was skeptical. Why? Because, as a lawyer, I know that Canadian employment laws are not designed for them.

Our laws are intended to protect workers from precarious working conditions, provide predictability and address the uneven bargaining power between companies and their workers. As a result, our laws increase the complexity of flexible, project-based work. Let’s consider the key legal considerations in turn.

Status, role and classification. Changing roles or job structure has the potential to increase the company’s liability for tax, overtime, wage and hours-worked compliance. For unionized workplaces, the changes could impact bargaining units and will require both consultation and buy-in from workers and the union.

Designing a talent marketplace requires a closer look at Canadian employment laws that are based on an employee’s role, status or classification, including employment standards laws, common law rights and labour relations laws.

Here are a couple of relatively straightforward examples of considerations that arise under employment standards laws:

• Managers and certain professionals are excluded from overtime, wage and hours-worked requirements. To qualify for a manager exemption, the employee can only perform non-supervisory or non-managerial tasks on an infrequent or exceptional basis. If a manager is moved to a project as an individual contributor, they may become entitled to overtime.
• Professionals such as lawyers, engineers and accountants are exempt from employment standards obligations, so long as they are carrying on the occupation governed by their regulating body. If one of these professionals joins an operational project—to learn a new skill set or gain insight into the business—they may become entitled to overtime, vacation, hours of work and leave periods.

The review of employee roles and classification becomes even more complex in a unionized environment, particularly where changes impact the bargaining unit. An employer cannot make unilateral changes to a unionized workplace, and any restructuring will likely require an adjustment plan, consultation and negotiation with the union.

All of the above isn’t intended to stop progress on a talent marketplace. Instead, it highlights the complexity and planning required to move forward. A flexible work model should address these statutory requirements in determining eligibility for a particular project or position and weigh the possibility that overtime and other minimum requirements apply to a wider group of employees, or that further consultation is required.

Compensation and benefits. If employees’ compensation and pay structure changes when assigned to a project, employment agreements should be amended, both to ensure clarity and to avoid future disputes. In addition, Ontario, Quebec and federal employers will need to consider whether increased agility and movement within teams impacts their approach to pay equity compliance.

Most workplaces in Canada are governed by provincial employment, labour, human rights and privacy laws that, while similar, are not identical. The applicable rights, policies and procedures depend on what jurisdiction governs the employment relationship. If employees perform work remotely, the location of their work becomes less clear, and you will need to reconsider the employee’s rights relating to hours of work, vacation, holidays, minimum pay and other statutory rights.

Classification of independent contractors. There are significant legal and tax differences between employees and independent contractors. Contractors, for instance, are not entitled to notice of termination or employment standards and are excluded from bargaining units. Employers do not deduct contractors’ income tax at source and are not vicariously liable for their misconduct.

If employees are given the opportunity to fill roles that would otherwise be classified as contract positions, an unintended consequence could be a reclassification of your independent contractors. To proactively address this risk, it is important to consider:

• What aspects of the work continue to differentiate contractors from employees
• How your organization would respond to questions about the classification of roles in an employment standards or tax audit.

Worker safety. Increasing flexibility and variability in the workplace could require more frequent updates to policies and procedures to ensure reporting, due diligence and safety standards are consistently met.

Also, under occupational health and safety legislation, managers and employees require specialized training, experience and supervision on tools, equipment and workplace hazards. All organizations have significant reporting and safety obligations, including to ensure employees have adequate training and supervision relating to stress, mental health, workplace violence or harassment.

In a networked or project-based work environment, identifying the manager(s) accountable for enforcing safety and other policies is an important aspect of legal compliance, particularly if the work is highly specialized and the site is safety-sensitive.

Discrimination. Employers are required to address the potential for discrimination and ensure that individual accommodation is available for employees in accordance with human rights and accessibility legislation.

For example, if an employee becomes eligible for flexible work based on a particular set of skills, the organization is responsible for ensuring that these skills are necessary and do not inadvertently remove certain candidates from qualification based on their gender, race, disability or other protected trait. If artificial intelligence is used to assess eligibility, the employer is responsible for any potential bias in the system.

Brave new world
Over the next decade, Canadian companies that explore innovative approaches to structuring the workplace and assigning work may have a competitive advantage. An internal talent marketplace has the potential to create a more flexible, technology-enabled and purpose-driven culture, and enable the organization to quickly deploy, motivate, develop and retain employees. But it has to be done right. The laws intended to protect workers are structured around traditional workplace practices developed over the past century. An internal talent marketplace could be a game-changer for your business—so long as you keep your people, and the law, on your side.

Questions? Our team of employment law, digital specialists and HR advisors can assist you.

Read the first post in this series: “On the frontier”