Introduction – the basics of talent management
Talent management is a process valued by most HR professionals today. That being said, it often misses a structured strategy and it can be difficult to implement the right practices that’ll make the most out of the vast possibilities talent management has to offer.
An organisation’s workforce – its talent – is the most valuable competitive advantage that sets them apart from the competition. Having a solid strategy in place will allow you to create processes that ensure you have the right talent available, now and in the future.
Companies that haven’t developed their talent management strategy as much as they could have, often run into trouble trying to recruit the most skilled workers, suffer from a higher percentage of employee churn and lower levels of productivity.
An organisation’s workforce – its talent – is the most valuable competitive advantage that sets them apart from the competition.
Whether you are looking for ways to boost the results of your recruitment efforts or get new ideas on how to manage the development of your employees’ skills, this guide will help you master your talent management strategy. Read through the entire guide, skip straight to the topic of interest, or simply get inspired to do some further research of your own – we hope the guide proves itself useful!
1. What is talent management?
Talent management is an overarching term that covers all people-related activities in an organisation and can be used to map out skills, develop capabilities and promote productivity. It can be seen as a comprehensive framework and strategic commitment that entails a wide scope of HR processes, HR solutions, and HR practices. In short, it’s a continuous process that requires constant attention and development.
Talent management consists of four key areas: attracting, developing, motivating, and retaining talent. In other words, it’s about investing in hiring and retaining the best possible people. They are the key to reaching the strategic goals of the organisation – be it productivity, customer satisfaction, growth, or all of the above.
Each member of the organisation plays their own part in the process, but managers and HR are crucial in laying out the groundwork for well-functioning talent management processes. They ensure that employees are motivated and committed to the company by taking an active part in discussing and developing the strategy for talent management.
Talent management in a nutshell
Attracting, developing, motivating, and retaining top-notch employees to increase business performance.
Some of the challenges that keep HR professionals busy can quite easily be solved by having a good strategy in place. What should we do in order to attract the best people to our organisation? How can we create the best possible candidate experience? How do we motivate talent once we have them in the organisation? How do we keep people invested in their development, the development of their team and the whole organisation? These are some of the questions that can be supported by talent management.
When used systematically, a good strategy helps employees unleash their full potential – which naturally helps the organisation reach its full potential as well.
2. A quick peek at terminology
As we have outlined, talent management is a comprehensive strategy entailing all processes and systems related to hiring, retaining, and developing employees. As an overarching term, it is often linked with many interrelated terms such as talent development, employee performance management, and competency management.
All of the above deal with the people within your organisation, but they represent slightly different parts of the spectrum. So how does it all come together?
The difference between talent management and talent development
The terms talent management and talent development are often used interchangeably, even though talent management is the broader term that includes talent development.
Talent development is a strategy that is focused specifically on developing the skills and competencies of employees. It refers to continuous learning and training opportunities – not only formal training programs, but also learning from colleagues on the job.
Talent development in a nutshell
Continuous learning, training, and opportunities for professional development.
Most people list opportunities for development, learning, and career advancement as their top motivators at work. Creating a working environment that encourages learning and helps employees to grow to their full potential keeps employees satisfied and committed, making talent development an important part of talent management.
What about performance management?
Performance management is another important part of talent management and describes the systematic measuring and developing of employee performance throughout their time at the organisation. Well-functioning performance management systems provide employees with clarity and transparency regarding what is expected of them and how they can continue to develop their performance.
Performance management in a nutshell
Measuring and developing the performance of employees in a systematic way throughout their time at the organisation.
Common ways to measure employee performance include appraisals, self-evaluations and other feedback processes, as well as measuring tools and forms.
Employee performance management is more than just the sum of its parts. Successful employee performance management requires monitoring and improving employee performance systematically, while creating and supporting a work environment where people can develop through continuous learning.
On top of resulting in the benefit of supporting each employee’s performance, a well-structured performance management process also increases employee retention.
What is competency management, then?
Also a part of talent management, competency management means identifying and optimising the competencies necessary for an organisation to reach its goals. In practice, it’s a process of cataloguing, managing, and developing employee skills and creating a competency architecture. At its core, competency management comes down to ensuring you have the right people with the right skills for any given job at hand.
Definition of competency management
Identifying and optimising the competencies required for an organisation to reach its goals.
Competency management provides a clear understanding of the competencies needed in the organisation. In contrast to talent development and performance management, that are mainly concerned with retaining current employees as discussed above, competency management also spreads to hiring and recruiting.
It helps, for example, in creating accurate job descriptions and advertisements, and helps visualise critical competences needed for business success are secured now and in the future.
3. The importance of talent management in an organisation
How important is talent management, really? As an HR professional you are undoubtedly aware of the positive impact talent management can have, or already has, on your organisation. To further help you with developing the initiatives in your company, or to convince others of its importance, here are the top benefits of giving your talent management strategy some extra thought.
The top reasons for having a talent management strategy in place
Improved recruiting and a stronger employer brand
- Most job seekers will look into an organisation’s reputation before applying. The right strategy and processes have a positive impact on the employer brand and help attract even the most sought-after candidates.
- A well thought out strategy also trickles down and improves candidate communication throughout the recruiting process, leaving a positive impact on every step of the way.
- Communicating your strategy helps candidates see the opportunities for professional development inside the organisation.
- It makes your hiring processes easier – whether it is a new hire, or someone hired from inside the organisation.
Smoother and faster onboarding
- The right practices ease people into new roles and make sure they are aligned with company goals and strategies.
- Smooth onboarding lowers the time it takes for people become fully productive members of the team.
- Well-functioning onboarding programs increase employee retention and improve employee performance overall.
Happy employees and lower employee turnover
- The right talent management strategy increases transparency, collaboration, and productivity within the organisation and helps build a supportive and engaging company culture.
- The opportunity to develop is a strong motivator– and often a reason for commitment to the job. This helps people to grow and lowers employee turnover.
- Development programmes help people build a career path inside the organisation, and in turn helps the company to identify the best internal candidates to fill open positions or create new roles where needed.
- It helps create motivation and makes employees feel invested in the company. Satisfied employees are more committed to the company and spread motivation and enthusiasm to those around them.
4. Creating a successful talent management strategy
Through the right talent management strategy, employees perform better, are happier, and ultimately help the organisation reach its goals. Sounds simple enough, right? To succeed with talent management, however, you’ll need a solid strategy for your efforts that aligns talent management with your company’s overall strategy and goals, defines leadership criteria, and cultivates growth.
A strategy doesn’t have to be overly complex. It’s your plan of action for taking the processes into practice, enabling HR and team leaders to follow a consistent path towards efficient talent management. As long as your talent management strategy is aligned with your company’s overall strategy, you are already far. Sometimes answering these three questions is enough: who do I need to hire, how will I hire them, and how will I develop and keep them in the organisation?
Creating and implementing a talent management strategy
There is no right or wrong way to draft your strategy. However, if you are able to make a start by using the tips listed below, you are more likely to succeed.
- Decide what areas you want to focus on. Prioritizing is crucial.
- Find the right tools and approaches for your talent management practices.
- Map the skills needed to implement your talent management strategy.
- Find your competitive advantage as an employer to set your organisation aside from competition.
- Identify and set measurable goals so you can track the success of the strategy.
- Measure and improve based on your findings. Choosing the right HR system is crucial for measuring the success of your talent management strategy.
Engaging team leaders and employees when creating the strategy, gathering feedback early on, and finally educating people on how to follow it will help them commit to your plans. Think of your strategy as a living tool and remember to review both the successes and failures.
To further help your strategy come alive, it can be visualised as a slide or a poster that lists the key tools or activities at each step of the employee lifecycle. It helps you implement your talent management strategy throughout the organisation, as it provides a common language for efficient and smooth communication between stakeholders.
5. Taking it into practice: establishing talent management processes
Having a strategy in place is great, but you also need to ensure the strategy is taken into practice. How do you create a winning formula for consistently executing your talent management strategy?
The talent management model
The talent management model is an organisation’s formula for how talent management is practiced consistently throughout the organisation. Each individual and each organisation is unique, so you should find and develop a talent management model that best works for you – your own template for successfully ensuring your organisation is on the right track.
That being said, there are some key areas of talent management that are included in most well-functioning talent management models.
Four example areas of a talent management model
Identify: Attract and select the right candidates
Retain: Engage, motivate, and compensate
Develop: Make talent increasingly valuable
Assess: Measure and track KPIs and metrics
For each step, you’ll want to list all of the specific activities your organisation should take. What should we do in order to attract the best people to our organisation? How can we create the best possible candidate experience? How do we motivate talent once we have them in the organisation? How do we keep people invested in their development, the development of their team and the whole organisation? These are some of the questions your model supports.
Step-by-step talent management process
Like the talent management model, the talent management process looks different for different organisations. Each organisation needs to find the right processes for them in light of their strategy. Bearing this in mind, here are some concrete examples of processes to include in your talent management strategy.
Your employer branding strategy. You’ll want to be an attractive employer. This is the basis that all of the next steps are built on. A strong brand attracts the best candidates in the market and enables your organisation to grow strong and stand out from competition.
Identify job criteria. Put a lot of thought into the key qualifications needed for each job to support the overall strategy. Competency management is a helpful way to catalogue, manage and develop employee skills. With the help of competency management, you’ll have a clear idea of the skills needed in your organisation and you’ll have the right people, in the right place.
Attract candidates. Find the right place for the job ad, make sure it’s the right time for your sought-after target job. In addition to attracting candidates, this step often also includes scouting or headhunting, meaning actively bringing candidates to your organisation by getting in touch with prospects who are not actively looking for new job opportunities.
Select the right employee. Interviews, tests, assessments, reference checks – the tools are plentiful. Remember to use available HR data to make a decision that support your current competency management strategy.
Onboarding program. Step-by-step programs make the onboarding smooth, get new employees on board with company goals, and make them productive team members sooner rather than later. Successful onboarding programs also make people feel more welcomed, making them committed and motivated, increasing the likelihood of them staying for the long haul.
Learning and development. Learning enables employees to perform better, thus helping the company in reaching its goals, while keeping employees motivated. Invest in continuous learning and development programs that include both formal learning and learning on the job.
Compensation. An important aspect of encouraging people to perform and stay committed to the company. The right salary level and employee benefits are still one of the primary motivators for employees. Thinking of your compensation practices help you set a clear and transparent compensation model.
Engagement and culture building. Company culture is a hard thing to describe and even harder to establish. Lead by example and nurture habits that bring you closer to a high-performing, empowering work culture.
How to measure performance. Performance management aims to measure and improve the performance of employees, making them as valuable as possible. Performance management offers people the right tools throughout their employment lifecycle so that they can develop their skills and reach their full potential.
Promotion and succession planning. It’s important to identify and promote people who will add value when given more responsibility. Succession planning is part of this. You need to have people ready to take on key responsibilities if and when needed.
Retention. When done right, retention is the sum of all the other steps. Employee turnover predictions and other statistical models have also proven effective. Always be on top of your employee turnover numbers to be able to diagnose what are the drivers that make people leave and to plan actions to increase retention rates.
Learn from exits. Some exits are undesirable, others desirable. What’s for sure though, is that they will happen. Try to learn from the exits through exit interviews so that you can improve in future. Learning from exits is an important part of retention management.
People truly make the business, and talent management is the number one tool for getting and keeping the best possible people. We hope this guide will help you get started with drafting a talent management strategy or recognise which parts of your current talent management strategy need development.
With well-functioning talent management practices, the people of your organisation will thrive and be more productive in a future where securing top talent is more crucial than ever. Good luck!