Untapped Talent

What Is Untapped Talent? A Complete Guide for HR Leaders

Untapped talent refers to individuals who possess valuable skills, knowledge, abilities, and potential that have not been fully recognized, utilized, or included in the workforce. This talent represents a reservoir of capabilities that could significantly increase productivity, spark innovation, and enhance business adaptability when properly leveraged.

Untapped talent typically falls into two primary categories:

1. Current Employees: Individuals already working within organizations who have skills or qualifications beyond their current roles, or whose capabilities have developed but remain underutilized. Research indicates that two out of three millennials believe they aren’t fully using their skills at work, while 42% said they’re likely to leave an organization if they don’t feel they’re learning.
2. External Labor Market: Groups frequently overlooked due to biases or barriers to employment. These include:
   • Veterans and military spouses
   • Individuals aged 60 or older
   • People with disabilities (physical, mental, or neurodivergent)
   • Those with criminal records
   • Non-student unemployed youth
   • Individuals with gaps in employment history
   • Family caregivers
   • People with few formal qualifications
   • Those requiring relocation (immigrants, veterans)
   • Individuals from disadvantaged backgrounds

These individuals are often termed “hidden workers”—people who are eager to work and possess or could develop the skills employers seek, if only those employers could find them. Unfortunately, many talented individuals from traditionally underemployed groups remain overlooked as job candidates despite their eagerness to enter the workforce.

The business case for tapping into this talent is compelling. Companies that hire hidden workers were 36% less likely to face talent and skills shortages compared to companies that do not. Additionally, employers report high performance from these workers, with the most common reason executives cited for hiring from untapped talent pools being that it helped them close skills gaps.

For employers to remain competitive and continue with a more equitable post-pandemic recovery, bringing untapped talent to the forefront of recruitment and hiring has become increasingly important. Furthermore, accessing and quickly deploying this talent to areas of greatest need is becoming critical in a rapidly changing economy that demands constant reskilling of workers.

Identifying and utilizing untapped talent is essential not only for fostering diversity and innovation but also for gaining competitive advantage in the workplace. Consequently, organizations that can recognize and leverage these overlooked talent pools stand to benefit substantially in terms of organizational capacity and performance.

Who Makes Up the Untapped Talent Pool?

The untapped talent pool encompasses various overlooked demographic groups with valuable skills and capabilities. These “hidden workers” represent individuals who possess desirable skills or could develop them with proper support, yet remain excluded from traditional hiring processes.

According to Harvard Business School researchers, hidden workers span numerous segments across different life circumstances and backgrounds. The long-term unemployed constitute one significant group, often filtered out by algorithms that screen for employment gaps in résumés.

Similarly, career changers frequently face barriers when hiring processes overemphasize industry-specific experience rather than transferable skills.

Specifically, untapped talent pools include:

• People with disabilities (physical, mental, neurodivergent) who bring unique problem-solving abilities and determination
• Veterans, military spouses, and caregivers who offer specialized training and adaptability
• Individuals aged 60 or older who contribute experience and institutional knowledge
• People with criminal records seeking reintegration opportunities
• Non-student unemployed youth with fresh perspectives and technological aptitude
• Boomerang employees who previously worked for a company and later return, offering familiarity with organizational processes and reduced onboarding time
• Return-to-work program participants such as parents re-entering after career breaks, who often demonstrate strong work ethic and willingness to adapt
• Remote workers who operate outside traditional office environments, with 34% of employeesworking from home some days as of 2022
• Individuals without university degrees who may possess valuable skills acquired through alternative pathways

Moreover, ageism affects both ends of the spectrum. While older workers face well-documented discrimination, younger adults equally report condescension and unfair workplace treatment based on age. A 2021 Journal of Experimental Psychology study noted that negative stereotypes propagated in media have “deleterious, real-world implications” for young workers.

The composition of untapped talent pools varies across industries and regions. Nevertheless, these groups share common characteristics: they typically possess diverse backgrounds, follow non-traditional career paths, demonstrate unique skills, and come from underrepresented communities.

Organizations that embrace this overlooked talent segments can substantially expand their talent pipeline. Companies report that hiring from untapped talent pools has helped them address skills gaps effectively.

Hence, recognizing the varied composition of untapped talent presents a strategic opportunity for organizations seeking competitive advantage through workforce diversity.

Why Untapped Talent Matters for HR Leaders

For HR leaders facing persistent talent scarcity, recognizing the value of untapped talent has become a strategic imperative. Talent acquisition teams continuously search for new sources of capable individuals, particularly as 78% of CEOs believe an impending workforce crisis looms due to skills shortages.

Harnessing untapped talent offers substantial business advantages that directly impact organizational performance. Companies that effectively employ hidden workers report being 36% less likely to face talent and skills shortages compared to organizations that do not. This advantage becomes particularly critical as internal hiring rates have declined significantly, dropping from 40% to just 24% since 2020.

The business case for investing in untapped talent extends beyond merely filling positions. Organizations gain multiple competitive advantages through:

• Enhanced retention and engagement – Research indicates that 93% of employees would remain with their company longer if it invested in their career development. Conversely, 42% report they’re likely to leave an organization if they don’t feel they’re learning or growing.
• Increased workplace productivity – Environments valuing diversity and inclusion consistently demonstrate higher productivity levels, as employees feel more valued and respected.
• Reduced operational costs – Lower turnover translates to decreased recruitment expenses, while untapped talent often requires less technical training due to transferable skills.
• Financial incentives – Hiring workers from untapped talent pools frequently comes with tax benefits and other financial advantages.

Beyond financial considerations, untapped talent addresses a concerning reality: two-thirds of millennials believe their skills aren’t fully utilized at work. This underutilization represents a significant missed opportunity, especially considering that organizations traditionally tend to box employees into specific roles with limited growth potential.

Identifying and developing internal talent remains an underutilized strategy, although it produces demonstrably better outcomes. External hires receive higher salaries yet score lower on performance reviews and are 61% more likely to be terminated than internal promotions. Furthermore, overlooking internal candidates for advancement can trigger additional turnover among those passed over.

The strategic importance of untapped talent has intensified in our rapidly evolving economy, which demands constant workforce reskilling. Organizations that can swiftly identify and deploy talent to areas of greatest need gain substantial advantages in adaptability and innovation. HR leaders who recognize this opportunity position their organizations for sustainable growth while simultaneously creating more inclusive and engaging workplace environments.

Challenges in Finding and Using Untapped Talent

Organizations face systemic obstacles when attempting to identify and effectively utilize untapped talent. Even though 77% of organizations reported difficulty recruiting for full-time positions in the past 12 months, 61% have no formal initiatives designed to recruit or hire untapped populations. These challenges prevent talented individuals from being discovered and integrated into the workforce.

Bias in hiring and promotion

Traditional hiring systems frequently screen out high-potential, nontraditional candidates through rigid filtering mechanisms. Unconscious bias in recruitment operates as a subtle yet powerful force that shapes hiring decisions without employers realizing it. These biases lead to unfair outcomes in several ways:

• Automatic knockout questions immediately disqualify candidates based on background or education criteria, regardless of their overall fit
• Applicant tracking systems often reject candidates with employment gaps, disproportionately affecting groups like military spouses
• Veterans’ experience may be described in terminology that hiring systems aren’t trained to recognize

Consequently, when these automatic responses guide hiring decisions, organizations risk building cultures that lack diversity and reduce innovation potential.

Lack of inclusive outreach

Many businesses frequently overlook members of underrepresented or marginalized groups when recruiting. This oversight occurs primarily because:

Employers predominantly use traditional hiring procedures and channels that inadvertently exclude diverse candidates. Job postings often contain language that discourages certain groups from applying. Furthermore, rigid criteria regarding qualifications create unnecessary barriers for qualified candidates.

This lack of diverse outreach intensifies the talent crunch that 50% of CEOs cite as the most formidable risk confronting their organizations.

Limited internal mobility programs

Internal talent mobility remains an underutilized strategy, yet organizations without effective internal mobility frameworks struggle with:

• Employee retention challenges, as 61% of employees report readiness to quit their current role if they can’t see potential for internal movement
• Skill utilization issues, as two-thirds of millennials believe their skills aren’t fully utilized at work
• Succession planning difficulties that affect organizational diversity at leadership levels

Throughout these challenges, the talent management systems at most organizations are built primarily to reduce risk rather than identify potential. Successful remediation requires re-engineering hiring systems, reimagining readiness criteria, and treating untapped talent pools as integral to workforce strategy rather than corporate social responsibility side projects.

How to Find and Support Untapped Talent

Developing effective strategies to identify and nurture untapped talent requires a systematic approach that addresses both recruitment and retention. Organizations that successfully tap into hidden talent pools employ multiple complementary methods that prioritize skills over credentials.

Use skills-based assessments

Skills-based hiring practices focus on evaluating candidates’ abilities rather than their background or educational pedigree. This approach helps level the playing field by emphasizing competencies over traditional credentials. Large companies including Boeing, Walmart, and IBM have embraced skills-based practices through initiatives like the Rework America Alliance and the campaign to Tear the Paper Ceiling.

The impact of skills-based assessments on recruitment is substantial. Companies participating in skills-based hiring programs report that restructuring job postings resulted in significant increases in qualified applicants. 

In one case, an employer quadrupled applications after making minor adjustments to their job posting. Another organization went from receiving one overqualified candidate to 18 appropriately qualified applicants after implementing skills-based hiring practices.

Encourage job rotation and mentoring

Job rotation represents a strategic approach to employee development where workers systematically move between different positions within an organization. This practice helps identify hidden abilities that may not be fully utilized in current roles.

The LEAD Connected program at HMH demonstrates the effectiveness of rotation programs. Employees are guided through three six-month rotations in various departments based on their interests and skills. Participants remain at their original salary while exploring new areas, often receiving multiple job offers afterward. As one participant noted, “What I love about the program is it’s given me a glimpse into places I didn’t know existed”.

Concurrently, mentorship programs significantly boost retention, with Gartner reporting that companies with mentorship programs maintain a 72% retention rate for mentees compared to 49% for non-participants.

Create inclusive job descriptions

Inclusive job descriptions eliminate barriers that discourage qualified candidates from diverse backgrounds. Key strategies include:

• Removing gender-coded language (words like “aggressive” or “nurturing” that subtly favor genders)
• Eliminating age-related terminology like “digital native” or “young and energetic”
• Focusing on outcomes rather than methods (e.g., “Moves equipment weighing up to 50 pounds” instead of “Must be able to lift 50 pounds”)

Partner with community organizations

Only 29% of organizations currently partner with advocacy or community-based programs related to employing untapped talent groups. Building connections with local organizations provides access to diverse talent pools while demonstrating social responsibility.

Effective partnerships can include educational institutions, workforce development programs, nonprofits focusing on specific demographics, and local government initiatives. These relationships create mutually beneficial outcomes that empower both companies and communities through structured programs like internships, apprenticeships, and mentoring initiatives.

The Role of Untapped Talent in Building Inclusive Workplaces

Organizations with greater diversity outperform homogeneous ones, making untapped talent essential for building truly inclusive workplaces. Companies integrating previously overlooked workers report substantial advantages beyond mere staffing solutions.

Fundamentally, untapped talent directly enhances workplace inclusivity. Employees from nontraditional backgrounds introduce different perspectives to challenges alongside heightened empathy that enriches organizational culture. This diverse representation creates environments where all employees feel valued, subsequently improving retention and engagement.

Yet despite recognizing these benefits, practical implementation remains inconsistent. In 2023, 62% of HR leaders planned to boost recruitment by focusing on diverse talent pools, yet 61% of organizations still lack formal initiatives designed for untapped populations. This disconnect represents a significant missed opportunity.

Forward-thinking companies approach this systematically by re-engineering hiring processes from the ground up rather than treating untapped talent as corporate social responsibility side projects. These organizations create inclusive infrastructure providing level playing fields where all applicants receive fair evaluation based solely on merit.

The workforce transformation extends beyond recruitment into workplace design. Flexibility options like remote work and hybrid models help attract talented individuals previously excluded due to rigid structures. Establishing support networks, eliminating unconscious biases, and creating sponsorship programs further strengthen inclusion.

Critically, successful organizations recognize that inclusive workplaces require ongoing commitment beyond initial hiring. Continuous learning opportunities, supportive mentorship, and genuine pathways to advancement ensure untapped talent remains engaged and valued throughout their career journey.

Key Takeaways

Understanding and leveraging untapped talent is crucial for HR leaders facing persistent skills shortages and seeking competitive advantage through inclusive hiring practices.

• Untapped talent includes both underutilized current employees and overlooked external candidates like veterans, older workers, people with disabilities, and career changers who possess valuable skills.

• Companies hiring from untapped talent pools are 36% less likely to face skills shortages and report higher performance from these workers compared to traditional hires.

• Skills-based assessments and inclusive job descriptions eliminate barriers that automatically screen out qualified nontraditional candidates based on background rather than ability.

• Internal mobility programs boost retention by 72% as employees who see growth opportunities are significantly less likely to leave their organizations.

• Systematic bias removal and community partnerships are essential for accessing diverse talent pools, yet 61% of organizations still lack formal initiatives for untapped populations.

The strategic integration of untapped talent not only addresses immediate staffing needs but creates more innovative, inclusive workplaces that drive long-term organizational success and competitive advantage.

FAQs

Curious about more HR buzzwords like privilege leave, casual leave, leave encashment, relieving letter, resignation letter or more? Dive into our HR Glossary and get clear definitions of the terms that drive modern HR.

Explore Taggd for RPO solutions.