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What Is Talent Management?
Talent management is the overarching human resources process of anticipating an organization’s hiring needs, planning to meet those needs and the strategy to retain and engage new hires once they are onboarded. The goals of talent management are broad but they can be simplified to how an organization leverages their people. Talent management is the central strategy for managing people within an organization.
Recruitment Versus Talent Acquisition Versus Talent Management
- Recruitment. The process of filling vacancies within a company. It is a short-term, finite process with an end goal to fill specific job requisitions. Recruitment is a function to source, screen and hire the best fit candidate for a given opening.
- Talent Acquisition. An ongoing, proactive strategy to plan for and meet the hiring demands of a company. Talent acquisition takes ownership over the strategy to attract, engage and hire top talent.
- Talent Management. The full scope of HR practices to forecast, attract, hire, motivate, retain and develop an organization’s talent. Talent management is similar to talent acquisition but it adds in elements beyond planning for and making the initial hire.
Components of Talent Management
Since talent management covers a broad scope of responsibilities, it is important to understand the core areas of focus that it spans.
Component 1: Planning
The most effective way to plan your talent management strategy is to proactively anticipate the hiring needs of your organization. Once you have anticipated your hiring needs based on your business’s forecasted plans, then you need to define predictors of outstanding performance. Having a clear definition of the expected competencies and outcomes of all of your anticipated roles will help you build a pipeline of qualified candidates well in advance.
Component 2: Attracting
Your strategy to attract the right talent for all of your anticipated roles will benefit significantly when you take your time on the first component, planning. The more specific you and your team get in defining the core functions, outcomes, expectations, responsibilities and competencies of a role the more specifically you will be able to target the right demographics.
Targeting the right demographics will transform your talent attracting processes from a wild shot in the dark to a genuinely valuable offer which will inevitably attract the right talent.
Component 3: Selecting
As you dedicate time and resources into the second component, attracting, you will build up a pipeline of qualified applicants and prospects will give you the luxury of selecting the very best fit for your open and anticipated roles.
The key to this component is producing structured and uniform criteria to grade applicants on. Using structured grading criteria will greatly improve your likelihood of accurately predicting top producing new hires. It will also direct your selection process, making it scalable and repeatable.
Component 4: Developing
This is the component that separates talent acquisition from talent management and it is also the component that separates average HR teams from industry changing HR business partners that have “earned a seat at the table.”
In this component you will be most successful if you collaborate and openly work with the leadership of other departments. Do not try to take on the entire development process of your entire organization. Strategically position yourself as a resource and as a partner. You may consider developing front line managers or other leaders on the processes they can then use for developing their own teams.
Developing new and existing talent will have several key benefits: it reduces turnover and reduces recruiting workloads due to lower backfill demands.
Component 5: Retaining
Many organizations focus on developing and transitioning as the core components to retaining their talent and skip a component dedicated solely to retaining.
Your strategy for retaining will definitely involve developing and transitioning your current talent, but in a mature talent management strategy you will build out a plan to retain your talent.
In this component you need to define the elements that promote job satisfaction as well as the elements that promote burnout and disengagement. There is not a one size fits all answer for this and it will be unique to your organization.
You will need to gather data from your people to understand their motivators and their pain points. To gather this data you can use a variety of methods like surveys, round table discussions and one-on-one sessions.
Here are a few potential areas you may uncover as areas that need a refresh: compensation, benefits, work-life balance, leadership and management style, employee assistance programs, career pathing and development opportunities.
Component 6: Transitioning
In today’s job market it is no longer reasonable to expect someone to stay in the same job or even the same career field for the duration of their career. The people working in today’s job market value growth, the ability to make an impact and the opportunity to learn and develop new skills. For this reason you need a plan to transition your workforce.
You need a plan for both where your current workforce can move as well as who will replace them when they move. A few sectors you will want to cover in your transitioning plans are promotions, transfers, cross training and specializations.
As with the other components, the key to this component is to set clear expectations and transparently define the qualifications for each type of transition. This will help you avoid pitfalls of less mature transitioning plans like nepotism, extroversion bias and tenure bias.
Why Is Talent Management Important?
Talent management is more than a new and flashy fad in HR. People can make or break an organization and there are many studies that back this up.
- The right talent in an organization links directly to revenue, productivity, quality and customer satisfaction. To put some perspective on how managing the right talent strategies can affect revenue, consider that top performers are 400% more productive than average performers.
- In tight economic conditions, optimizing employee performance is a perfect way to reduce costs. Studies show that improved performance management can save mid size businesses to enterprises around $6 million dollars per year in reduced labor costs.
- U.S. businesses are losing $1 trillion dollars annually in employee turnover. Losing people is about more than just losing money. When you lose your top performers you lose your most reliable people (innovators, problem solvers and game changers). The good news is that this is a fixable problem. Over half of interviewed employees in their exit interview said that prior to them leaving their direct manager never talked to them about their job satisfaction. Proper talent management practices like creating career pathing maps and developing employees can directly lower business costs.
How Do I Develop a Talent Management Strategy?
The goal of talent management is to hire top talent and nurture them into engaged and high performing employees which means that developing and maintaining a suitable talent management strategy is paramount. Read these next steps to understand how to build a strategy that will help you accomplish your talent management goals.
Not all companies have a talent management strategy, so anything you can do now to help develop this strategy could help revolutionize the way your organization views talent.
Step 1: Use your organization’s goals to create a talent need forecast
Your talent hiring goals need to match business goals so that you can keep up with growth without over hiring or making your team headcount too rich.
In this step you need to continually understand your organization’s changing needs so that you can proactively hire talent. If your hiring strategy is static you run the risk of getting out of sync with your business needs which can cause you to have to reactively hire if the business grows suddenly or sees increased turnover.
Step 2: Create outcomes based inclusive job descriptions
Outcomes based job descriptions give you, the hiring team, the right foundation for sourcing talent. Outcomes based job descriptions give candidates clear expectations of what will be expected of them in the role which empowers them to make informed decisions.
Inclusively written job descriptions help you attract diverse talent. Statistics show that the language you use in your job description can adversely affect the amount of women that apply for a role. Using inclusive language will help you attract more top talent.
Step 3: Clearly define metrics of success
Each role in your organization needs to have clearly defined, measurable and attainable metrics of success. These metrics of success need to tie directly to your organization’s mission and need to be structured in a way that each role clearly understands how the work they are doing contributes to your organization’s bottom line.
When people understand how the work they are doing impacts and drives the mission of the organization they are much more likely to be engaged in their work and find job satisfaction.
Defined metrics of success also help employees know where they stand. It can motivate underperforming employees to seek additional feedback to improve their performance and it can also function as a rewarding factor for top performers.
Step 4: Create a career growth map that invests in your employees
Don’t leave career growth up to chance. Make sure every employee in your organization understands the opportunities they can build toward.
These conversations can be part of a formal review process but they should be happening more frequently than that. Intentionally design your career growth map so that these conversations can happen organically.
Leaders should be holding regular discussions with their direct reports about where or how they want to advance their career. This can help an employee focus their goals and define what type of career advancement they are most interested in. This can also help a leader understand where to mentor and support their team to help them accomplish their personal career goals.
Write down your people’s career goals or allow them a place to write down their career goals that can be tracked and accessed by HR and other leaders.
Each type of career growth should have defined metrics of success to act as guideposts for how to get there.
Step 5: Check in with your people and adjust
Remember that over half of employees that left their job said in their exit interview that prior to leaving their direct manager had not spoken to them about their job satisfaction.
It is likely that in your role you are busy, constantly being pulled in multiple directions, and do not have time to check in with everyone. However, making time for this important process will separate you from your competition and make you a leader and business partner that truly drives impactful change.
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Tyler empowers Talent Acquisition professionals, HR business leaders, and key stake holders to develop and execute talent management strategies. He is igniting the talent acquisition process through: team building, accurate time to fill forecasting, driving creative talent sourcing, and fine-tuning recruiting team effectiveness.
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