The Importance of Talent Management
Talent management is a continuous process that involves the following five steps:
- Talent Planning
- Talent Attraction
- Talent Development
- Talent Retention
- Talent Transition
Connected talent management is a systematic way of handling the above five categories so your business can thrive and your employees can fulfill the most important operational roles.
This isn’t just another fancy HR term. Talent management is the backbone of a company’s future. Whether it’s hiring new talent in the company, educating your current talent pool or succession planning for a new C-level team, talent management is crucial.
And last but not least, the bottom line is that talent management affects the company’s revenue streams and profitability. According to a McKinsey study, organizations with effective talent-management programs have a better chance than other outperforming competitors.
With that in mind, let’s see what talent management strategy encompasses and how you can create one for your company.
The five-step process for creating a talent management strategy
There’s plenty of talent management divisions out there, but every one of them boils down to the following five steps.
It’s important to understand the organizational and business strategy when it comes to planning the entire talent management process. You are not developing the talent management plan in a vacuum. You build up the plan according to your needs.
For that, you will need to evaluate, analyze, and measure the current talent capabilities, compare them to your business needs, and find the gap. The gap usually finds problems in these areas:
- reducing turnover rate
- employee engagement
- employee wellbeing
- productivity rate
- culture management
- leadership pipeline problems
These are the most common challenges you will deal with in your company where talent management can help you out.
The second step is to attract the right people to your company.
Attracting the right people
You need to attract the right people to your company if you want to achieve your business’ goals and needs. What usually happens is that companies pick one of these two options:
- Getting the best, but very expensive, talent out there to solve a problem quickly
- Getting the best, but inexperienced, growth talent out there to nurture them into rockstar employees.
The first scenario usually happens if you need to solve a problem fast and you don’t have time to teach, coach, mentor, and develop the talent. This is where you get talent that can immediately perform and solve your biggest burning needs.
The problem with this approach is that it’s costly and companies usually can’t afford a lot of these employees.
The second scenario usually happens if you have some time, but you’re constrained by your budget. So you find the best growth talent out there, get them in your company, and nurture, develop, coach, and lead them to become high-performing employees.
Both scenarios are valid. You just need to align your talent attraction toward your business needs. Coca-Cola used to hire middle and senior managers through mostly the first scenario, while Pixar focused on getting the best growth talent and then nurturing it to become high-performers.
Developing your people
Once you recruited your talent, it’s now time to develop them. It’s not just about the knowledge the employees bring. It’s about culture fit, handling peer-to-peer relationships, learning and development, leadership development, and job development.
Developing your people means investing resources in them. As the parable said,” The CFO asks the CEO,: ‘What happens if we invest in developing our people and they leave?’ And the CEO responds,: ‘What happens if we don’t and they stay?’”
Developing your people needs to be systematic and it’s a crucial part of talent management. Most of the engagement problems happen because people aren’t developing themselves in the companies where they work.
The employees’ job needs to be dynamic and just a little bit out of their comfort zone. That’s what will make them get “into the zone” or the famous “Flow.” Flow engages employees and makes sure that they are developing and learning at work while at the same time performing.
According to Gallup, only 34% of employees in the US are engaged at their work.
Most of the talent retention happens in the talent development phase. When it comes to talent retention, the two most focused aspects of it are culture and remuneration.
When it comes to salary, only 11% of employees leave their jobs because of a higher salary. According to a Gallup study, around 70% of employees leave their jobs to get away from their managers.
Using talent management strategically can deeply affect the turnover and retention rate of your company.
And the last step of talent management is the talent transition.
There are a couple of things to take care of when it comes to talent transition:
- Succession planning
- Internal mobility
- Knowledge management
- Exit interviews
Succession planning happens when you need to prepare a person to fit a new role at a company, usually for C-level or crucial operational positions.
But to have a person be ready for succession planning, you need to have an adequate leadership pipeline in the company. This means that you need to take care of your employees so they stay in the company long enough so they can fill the C-level positions when the time is right.
When your talent management is systematic, you know what it takes for an employee to fill a new position. It doesn’t matter if it’s succession planning, internal mobility or simply a new hire; knowledge management ensures that you can provide the knowledge, skills, and attitude for the new person filling the role.
When you systematically attract, identify, develop, engage, and retain employees who are of value for your company, you will fulfill the role of talent management in your company.
Successful organizations like Apple and Google attract employees that don’t just work for a salary. They attract employees who share the same beliefs, motivations, and visions for the world. Because of that, the employees invest more of their time, energy, and effort in achieving great results and contributing to the business’ success.
Make sure that your talent management system supports this.