Chess is a popular metaphor for talent management for good reason. They both involve complex strategies, thinking ahead and considering what moves the competition is making. And just like chess, talent management has desired outcomes — attracting and retaining high performing employees who fit in well with your company.
What Is Talent Management Strategy?
You need to keep your business competitive. And hiring, training and retaining high quality employees is a vital part of success. Developing a strategy for talent management involves every aspect of human resources. It includes finding gaps in your current workforce, recruiting employees, onboarding and training and helping them grow within your organization. Successful talent management strategies analyze and measure progress at each step of the employee’s life cycle to make sure you have the right workers to help your business succeed.
Successful talent management strategies meet similar criteria, and here are a few common attributes.
- They define quantifiable objectives and desired outcomes.
- They identify the needs and desires of your workforce.
- You can use metrics to track progress regularly.
- They find behaviors and traits of talent that lead to exceptional outcomes.
- They include tools, such as a human resource management system (HRMS), to formalize, organize and streamline talent management strategies.
Why Is a Talent Management Strategy Important?
Your overall business strategy will drive your talent management. Understanding what business objectives you want to achieve will help you find, train and develop the people needed to meet those goals.
Strategy is a guiding set of principles that can help you allocate resources. It informs decision making and maps the way to specific business goals. For example, if a business strategy is to corner a new, younger market, you can craft a talent management strategy that includes recruitment, training and retention tactics that build and reinforce that goal. Companies with thoughtful approaches to talent management consistently outperform their peers, boost productivity and face lower employee turnover rates.
There are a few drivers of a successful talent management strategy.
Rapid talent allocation
- Starting with recruitment, identifying skill or competency gaps in your workforce and filling them with qualified candidates is a vital part of any business.
- Efficient employee onboarding helps your employees reach full productivity quickly and makes the experience more positive for the new hires, as well as their teams.
- Adapting teams, training employees and keeping your workforce agile to meet new needs helps with your overall talent strategy.
Positive employee experience
- Do your employees want to work for your company? Clearly communicating goals, providing the resources to accomplish them and trusting your employees can help improve your employee experience.
- Employees who are engaged at work are more likely to stick around, stay motivated and produce the best results.
- It may take some trial and error to find the right initiatives to boost your employee experience. And it will take the work of not just your HR team, but individual managers, internal communications and others who impact the workforce.
Strategic HR team
- Consider a human resource management software solution. This can be the central hub not just for your HR team, but the entire workforce. It can help with everything from employee reviews to hiring and onboarding while providing workforce analytics to inform strategic decision making.
- Make sure your HR team understands greater business objectives. This will help them in decision making for which new hires to prioritize, onboarding tactics and training.
- The HR team can also track progress toward specific outcomes and goals for talent management including recruiting and employee turnover.
The Talent Management Process
Talent management isn’t a single moment in time or something that’s done once a year. Instead, it’s a process that includes recruiting, training, managing, supporting and compensating your employees as they create value and drive your business toward goals.
The process includes the following steps.
Talent strategy and planning: Talent planning considers factors to anticipate labor needs, such as voluntary turnover rate, workforce management, demographics, succession planning, business priorities and budget. This involves identifying the needs, considering changes in the structure of the organization, the strengths of the current staff and preparing people for future roles.
Sourcing and recruiting: Recruiters work to attract highly qualified people they think will be good fit for the company. The recruiters then vet the candidates, gather key information and pass on the best-fit candidates to the hiring manager and their team for further interviews.
Selecting and hiring: This step involves careful coordination between recruiting, human resources and the business function in developing and communicating compensation packages. Once an offer is extended and accepted, the onboarding (typically an HR function) and training (a business function) begins.
Developing: Training and developing the people you hired involves several functions working in concert. It begins at onboarding and includes immediate job-specific training but extends to developing competencies that advance individual career goals aligned to business objectives. Employee recognition programs are also helpful tools to help employees feel appreciated and allow them to thank and call attention to their peers.
Retaining and engaging employees: Managing performance and compensation is more than goal setting and performance reviews but encompasses ongoing communication between the employees and their managers to align work with strategic business goals. Engaging employees with challenging work while providing the support, tools and training they need to succeed can be a recipe for success. It keeps employees wanting to work for your company while they also have a high output. Compensation can be tied to performance management.
Transitioning: Think about succession planning and leadership development. Identify and train promising leaders for management tracks.
How to Create a Winning Talent Management Process
A talent management strategy is not easy to design. Each organization’s talent management strategy will be unique to their business goals. It should also be agile to adapt to changing business needs and environments. The best talent management strategies look at historical, current and future business needs and consider all aspects of the employee experience. Here are some common elements for your talent management.
Start with the business strategy: Make certain that all stakeholders understand the business objective. For instance, is the goal to increase sales in a certain region? What talent does the company need to accomplish that goal? What are the barriers to achieving objectives?
Conduct a regular talent review: Determine where gaps in your workforce could hinder your success.
Build and refine: Continually adapt and improve plans. Look for current employees with skills, competencies and potential to do the work. Create talent pools, establish dedicated training and development budgets and create policies that encourage growth and development. Be mindful that what works for some employees may not work for everyone. Segment and alter plans to adjust for employees from different backgrounds, skillsets and experience levels.
Attract the right candidates: If you need to hire new employees, think about external market forces. Is talent readily available? What incentives might you need to offer to attract the right talent? And what are competitors doing who are trying to attract new hires from the same talent pool? What does your employer brand say to prospective job candidates?
Put performance management processes in place: The authors of the book “One Page Talent Management” recommend simplifying this process as much as possible. As an example, many organizations use the “SMART” (specific, measurable, achievable, realistic and time-bound) acronym to track goals for individual bonus plans. The authors instead recommend using “SIMple” to track (specific, important, measurable) goals. List goals in order of importance and make performance management a regular interaction and not a once or twice a year event.
Help people perform at the best of their abilities: The best talent management strategies are agile. They can move people to projects as needs arise and quickly change focus when those needs aren’t there. Consider using contract or freelance workers for short-term or special projects.
Develop succession plans: Taking data from talent review processes, establish plans to train and replace key employees should they leave the company or retire. Cross-train on important tasks so knowledge isn’t lost when people leave.
Use data to drive talent management decisions: When forming your talent management strategy, build in key performance indicators (KPI) to track progress and the effectiveness of certain efforts. KPIs can be analyzed as one part of evidence-based talent management approaches. Evidence-based decisions tied to specific business outcomes make for the most impactful talent management strategies. Consider including data from your HR software, as well as other financial goals as key benchmarks.
The Key Elements of a Talent Management Strategy
Your company will be more effective and agile if you base your talent management strategy off the needs, skills and competencies of your employees. Here are some important principles in meaningful talent management strategies.
Strategy-driven: What you try to accomplish with your talent management should be informed by current and future business strategy and overall business goals. For example, increasing sales in a specific market may lead to hiring new salespeople in a certain region.
Skills and competency-based: Instead of focusing on the jobs employees have, focus on the skills they have and the skills your company needs.
Performance-based: Analyze the performance of individuals and teams to and identify gaps in performance or barriers to achieving goals. It could be productivity needs to be increased or maybe work should be better prioritized to meet the goals.
Agile: Talent management strategy must adjust to the business environment, the market for labor and business priorities.
Segmented and individualized: Talent management strategy should recognize that the needs of all employees aren’t the same. How you interact with your sales team might be very different from how you interact with software developers, for example.
Evidence-based: Base your decisions on data from your organization, such as output, performance and sales. Supplement it with information on industry best practices and benchmarking metrics where possible.
HR and Payroll
Talent Management Strategy Examples
Looking at the talent management process in its entirety is overwhelming. But focusing on a single area or making small changes can have a big impact.
Some employees and managers alike dread the annual or biannual performance review. Software company Adobe Inc. employees described the process as “soul crushing.” That general feeling was the impetus behind scrapping that whole traditional process and adopting a new process they called Check-In. Adobe employees no longer have performance reviews, but ongoing conversations between managers and employees that make feedback, goal setting and development timely and relevant. For instance, prior to a presentation, a manager will share tips with the employee, and give feedback after to keep things timely and relevant. The ongoing conversations keep goals in mind — desired business outcomes, team benchmarks and career growth.
Formal training and development programs are crucial to retention and career progression. AT&T has a flagship development and training program called AT&T University. It offers onsite and virtual job training, and by its own account, it has “shaped more than 100,000 AT&T managers and counting.” Focused on developing employees, it has classes on everything from building the skills to have crucial conversation and manage time, to bringing in leaders from inside and outside the company for leadership summits.
The best talent management strategies also take a holistic view of skills and deploy people to areas of need quickly. For the U.S. Army, whose “most important weapon is its people,” its new talent management system brings together all Active, Reserve and National Guard soldiers into an integrated pay and personnel system to give better visibility into the entire available force and manage knowledge, skills and behaviors. For instance, in the National Guard and Reserve, there are people with skills learned in their civilian jobs that may not be visible when looking at rank or military occupational specialty (MOS). Instead of just looking at rank and MOS, they can develop fuller profiles of knowledge, skills and behaviors and even their desires that can give a better picture of full talents that the person can contribute.
Free Talent Management Strategy Template
Download a free talent management strategy template to get you started, check in on the progress of existing plans and learn more about some of the fundamentals.
Make Your Talent Management Strategy More Effective With Software
Successful organizations are taking advantage of the benefits of human capital management (HCM) software and reevaluating recruiting, performance management and learning processes. Recruiting processes are shifting to passive candidate tracking, or finding people who are not currently looking for new employment. Other trends include social outreach, marketing campaigns and more efficient talent pool management. Performance management is no longer a once-a-year activity but continuous. And learning technologies need to shift accommodate personalization trends.
Software helps organizations have more agile talent management processes that are in line with current employee expectations.
Collaboration toward goals
For instance, NetSuite SuitePeople Performance Management functionality helps employees and their managers collaborate, set goals and track progress toward measurable outcomes. NetSuite provides many out of the box KPIs to tie goals to business performance metrics — such as sales win rate or billable hours.
KPIs and metrics
Employees can select from a list of industry-specific performance metrics or manually set goals. Communication is streamlined because everything is in one place — the manager and the employee are no longer passing back and forth a spreadsheet and managing performance through email.
Robust and useful performance reviews
Rather than providing a snapshot in time, performance reviews become dynamic and incorporate changes in the business environment or the company’s goals. Reviews become a tool to help employees progress in their careers and stay engaged.
And it’s easier for performance review committees to track individual progress and how that individual maps to others in their department or the company. What’s more, with HRMS software, HR leaders can easily track the performance review process by running reports to see overdue reviews, rating distribution and an employee’s performance review history.
Talent management systems provide the tools to bring in candidates with the right attitudes, skills and experience, validating from the get-go that are a good fit with the organization’s vision and culture. They help ensure that employees have the right environment to learn and grow in their careers, as well as align job performance goals with business performance goals. They help track and surface the individual motivations that will encourage someone to stay with the company. And they help drive consistently positive employee experience that encourages people to stay in their roles, mentor others within the business and prove long-term assets to the business.