You’ll probably come across the term “talent management” soon after your first day in the HR department. On paper, it’s defined as the strategy of finding, obtaining, and growing talent. But what it actually encompasses is much more than that.
Betterworks found that companies with clear objectives outperform the competition by 42%. By understanding the ins-and-outs of talent management, you can utilize this framework to create measurable objectives for your People operations.
Continue reading below to find the definition of talent management, the different stages of the talent cycle, and how workforce planning can measurably affect your business goals.
Defining talent management
Talent management is defined as the process of strategically growing and maintaining a strong workforce to empower business objectives. It’s not just about talent acquisition, performance management, or employee engagement. It’s all those things and more.
The talent management process involves all stages of the employee lifecycle:
- Early Stage: Attracting, sourcing, interviewing, and onboarding.
- Mid Stage: Engaging employees, managing performance, and compensation planning.
- Late Stage: Succession planning and offboarding.
These stages break down further into the talent management cycle.
The talent management cycle
As you can see in this diagram, talent management is a never ending loop that feeds off itself.
Have a fantastic senior data scientist who has been in the company for 30 years? Probably good to plan for an internal successor. Someone in the marketing department filled out an unsatisfied employee survey? Accelerate hiring for that new marketing role.
Every portion of the cycle directly informs the next, creating a holistic picture of your organizational strategy. Let’s break down each individually.
Before you can do anything, you have to understand your business strategy. How do your talent management operations align with the entire organization’s? What gaps are you looking to fill company-wide?
Once you have a firm grasp on that, you can look back on previous efforts to identify room for improvement. What recruiting metrics were you excelling at? Where were you falling short? By recognizing strengths and weaknesses, you can analyze what parts of the process need to be changed.
Then you can use the information you gathered to develop a strategic workforce plan to fill those gaps.
After you’ve created your plan, defined your metrics, and discovered your talent gaps, you have to build candidate interest.
Let’s say you opened a new upper level role on your sales team. You can either fill this role by promoting an internal candidate or hiring an external candidate.
If you’re hiring internally, you have to plan further ahead. By promoting someone, you’re leaving behind an empty hole. How will you account for that gap? Can you fill it before the promotion goes through so you’re never understaffed?
For external candidates, everything front-facing is important. How compelling is your employer branding? Are you spending advertising money on job board posting? Are you tapping into passive talent pools? Your human resources team has to think like a marketing team to figure out what makes candidates want to work for you.
The develop stage involves everything from onboarding to upskilling to promoting. If one of the important parts of your plan is employee retention, then this stage is incredibly important.
It all starts with onboarding. A great onboarding experience can improve retention by 82% according to research by the Brandon Hall Group. Make sure all new hires have a smooth transition into your company with the appropriate levels of learning and mentorship.
Performance management is also key in this stage. 65% of employees satisfied in their roles noted they would also work harder if they were more recognized for good work. 73% of unsatisfied employees still said they’d work harder if they were recognized more.
Gallup found that those who received positive feedback had 14.9% lower turnover rates than employees who received no feedback at all. Therefore, consistent and positive feedback is the answer to developing great talent.
Much of the employee development carries over into the retain stage. After all, if you’re developing great talent, you naturally want to keep that talent in-house.
To retain the best talent, you need to focus on two things: culture and engagement. According to Jobvite, 28% of new employees who left a company in the first 90 days blamed bad company culture. How can you build a stronger culture?
SHRM says that most company cultures aren’t that different from each other, proving a couple examples of similarities. Most private-sector companies have similar business goals of increasing revenue and growing the company. They aim to be teamwork-focused and empathetic to employees. But companies differ in a lot of ways too. Some are very data-oriented, yet others lead by intuition. Some are stable and steady in their operations, while others like startups tend to be more all over the place.
Therefore, your company needs to nail down its mission statement, values, and operational strategy. Keeping consistent and finding talent that aligns with your culture will only help perpetuate it over time, building a stronger foundation for keeping future employees around longer.
Good culture boosts employee engagement and vice versa. Some ways to focus on engagement specifically include sending out employee surveys, creating opportunities for collaboration, allowing for peer recognition, and rewarding good work.
All employee life cycles come to an end. But if you focus your efforts correctly, the end result won’t be turnover. By doing a successful job retaining and engaging employees, you can focus on succession planning, internal mobility, and retirement.
Succession planning is the process of preparing a current employee to rise into a leadership role upon the retirement of a management figure. According to Harvard Business Review, only 54% of boards have a specific successor in mind for C-suite positions, so by putting a succession plan in place you’re already ahead of half the competition.
Internal mobility is a great sign of an engaged workforce, so you have to incentivize employees to follow an internal career path. If someone has been in a role for 2+ years, they will certainly be looking for a pay raise or a bump in responsibility. If they are doing a good job and you don’t reward them as such, they’ll take their talent elsewhere.
Putting it all together
Each distinct stage of the talent management cycle overlaps with another. Therefore, it’s important to approach talent management strategy holistically, while using the stage framework to separate out responsibilities.
McKinsey found that only 5% of employees believe their organizations’ talent management has been very effective at improving performance. So how can your organization improve?
Harness talent management tools to make the job easier
Talent management can be overwhelming, especially when you have a different software system for each stage. 57% of interruptions at work result from switching among disparate stand alone applications or social media, so having a single talent management suite becomes an effective way to make sense of it all.
Not sure where to look first? Check out our top talent management systems landscape. You’ll be able to find expert advice on benefits, pitfalls, pricing, ROI, and more to help you buy the best solution for your company.