Talent management strategy – the gateway to great performance
Apr 16, 2021
Talent management is not just about managing the people working for an organization – it has a significant bearing on organizational performance. Sample the following from a McKinsey survey:
- As high as 99 percent of respondents reporting very effective talent management say they outperform their competitors
- Just 56 percent of respondents not reporting very effective talent management say they outperform their competitors
This should mean everyone will focus on talent management as a means of driving organizational growth. But that is not the case, as only 5 percent or respondents feel their talent management has been very effective at improving company performance.
Why is a talent management strategy important?
Talent management covers the entire chain of HR activities dealing with attracting, onboarding, developing, engaging, and retaining high-performing members of the workforce. The aim is to sync the talent strategy of the organization with its overall business strategy, and thereby enable it to achieve its goals.
This implies that good talent management is key to helping a company win in the market. And that is where a talent management strategy comes in – it is a plan of action aiming at optimizing the performance of employees and boosting their engagement and productivity.
How does a talent management strategy work?
A talent management strategy shifts the focus of HR beyond just acquiring talent and managing performance. It facilitates a smoother HR function and allows management to plan how to recruit and retain top performers, employing them to work toward specific goals of the business and offering them better compensation than their competitors.
The right approach is essential.
A talent management strategy is not a standalone project – it requires an integrated approach, whereby this strategy is aligned with the future direction and vision of the business as well as its overall strategy. A well-developed talent management strategy comes about when the business strategy and the human strategy come together.
A talent management strategy is based on the understanding that if you provide the resources to do a job well, employees perform better. The belief is that:
- People are engaged when job demands are balanced with an equal or higher level of job resources
- Job demands reduce engagement, and lead to burnout and thereby lower organizational and personal performance
- The right job resources enable higher engagement and in turn better organizational and personal performance
To achieve the above, a talent management strategy needs to include the following key steps:
Talent management strategy must cover diverse yet critical areas.
Given how important it is to manage talent such that the organization gains in its market performance, a talent management strategy has a broad compass. These are its chief areas of concern:
Attracting and recruiting people: Getting the wrong person on board can often be significantly costly, which is why attraction and recruitment plans can be grueling. The Talent Shortage Survey by the Manpower Group suggested 72.8 percent of employers had a tough time finding skilled candidates.
Building and employing talent: The strategy must cover the particular aspirations and needs of the workforce while balancing them with short- and long-term organizational goals. This saves the cost of hiring replacements while keeping the employees faithful and motivated.
Retaining talent: The average organization bears the equivalent of 33 percent of its annual revenue when it loses talent. This attrition cost is a direct result of not considering the welfare and personal goals, which if taken care of, would ensure high employee retention.
Here is a template for a talent management strategy.
Every strategy for a particular operational area of a business starts with the overall business strategy. Accordingly, the following template is a good starting point for a talent management strategy:
Identify strategic priorities: From organizational goals, cull out strategic priorities and accordingly understand the skill areas required in new hires as well as to be developed in the current workforce.
Connect practices to priorities: Basis the identified strategic priorities, determine the requisite tangible talent management practices to be implemented. These could include, for instance, training consultants for knowledge partner roles, and other actions that impact branding and the value proposition for employees.
Establish HR processes to implement and maintain capabilities: Given that most strategies are not short term, key elements to put in place include new or redesigned workflows, proper software systems, training in the most impactful skills, and identifying and tracking the right metrics.
Several obstacles could trip up the pursuit of the right talent management strategy
Records are meant to be broken… and strategies, to be disrupted. Specific challenging elements include:
Insufficient talent for key positions
A talent shortage across the board
Suboptimal engagement of employees
Shortage of high-potential leaders
Talent lost to other organizations
Workforces and workplaces both are changing, with workers from different generations in the same workforce. Their expectations and needs differ, as does their readiness for a new way of work. From merely turning up at the job, they look to purposeful work aligned with their values yet beneficial for their company. All these diverse elements must align with and integrate with each other, as otherwise, the mere ‘checking the box’ situation will have people mechanically completing the requisite steps instead of truly valuing their work.
To sum it up……
The path to a game-changing talent management strategy is not smooth. An effective talent management strategy brings together quick talent allocation, a great experience for employees, and an HR team tuned to working in a strategic manner. Assess available and required talent, develop a global leadership pipeline, activate employees through development and engagement measures. With these key practices in place, the organization will be well placed to outperform its peers in the marketplace!