Talent Management – What is it and why is it important?
Talent management is how employers recruit and develop a workforce that is as productive as possible and likely to stay with their organization for the long term. When implemented strategically, this process can help improve overall business performance and ensure it remains competitive.
What does talent management mean?
Simply put, talent management means investing in an organization’s most important resource: its people. To this end, employers can recruit candidates with highly desirable skills, provide opportunities for continuous learning and development, reward valuable team members and encourage them to progress within the organization.
An example of talent management
Real-life examples of talent management happen every day. Consider, for example, a clothing retailer that wants to shift its business model from simply providing clothing to providing customers with a truly service-based experience. To achieve this goal, the leaders of the organization know they will need a new breed of associates and managers. So they’re implementing candidate assessment and tracking tools to help them hire the right candidates and using real-time performance data to give supervisors the information they need to make more informed decisions.
Why is talent management important?
Companies that take the time to develop their employees and keep them engaged tend to be innovative and profitable. Conversely, those unable to find or retain talent typically have low customer satisfaction and limited growth potential.
What are the key elements of talent management?
To craft the kind of talent management strategy that moves an organization forward, employers typically need to:
- Align talent goals with broader business goals
- Meet employee expectations and keep hiring promises
- Leveraging data to make better workforce decisions
What does talent management include?
Equipping and engaging talent to optimize productivity and fuel growth is not a singular task. There are many employer responsibilities, such as the following, that must be fulfilled to excel in talent management:
- Workforce planning
Most talent management strategies begin by defining the skills that will be needed to achieve business goals.
Talent acquisition involves effectively representing the employer brand, determining where to find the right candidates, screening candidates and interviewing promising prospects.
A structured onboarding program that introduces employees to the workplace culture and helps them feel connected and comfortable with their team and organization is key to retention.
- Training and development
While it was once seen as the employee’s responsibility to seek out learning opportunities, many workers today expect their employer to provide them with the tools, guidance and support they need to advance their careers.
- Performance Management
Reviews and check-ins with team leaders help employees build on their strengths, increasing engagement and reducing turnover and enabling employers to achieve key business goals.
- Benefits and compensation
Fair compensation is important, but employers who want to attract and retain talent need to take a holistic view of the perks and benefits they offer beyond a paycheck.
- Succession planning
Preparing for the next stage of the employee journey – whether it’s a career move, retirement or resignation – can help people move quickly into new roles and limit disruption.
Benefits of talent management
When people thrive, businesses thrive. Employers who create a culture that empowers employees to perform at their best may be able to:
- Recruit in-demand talent
Companies are becoming employers of choice and attracting talent organically by making their brand a central part of their talent management strategy.
- Minimize disruption
Unplanned departures lead to gaps in coverage, but with a talent pool, vacancies can be filled quickly and operations kept running smoothly.
- Improve productivity
Ongoing strengths-based coaching helps employees develop their skills and reach their full potential, increasing their effectiveness.
- Lower the costs
Retaining valuable team members and keeping them engaged is usually more cost effective than recruiting and training new recruits.
Talented teams are more likely to develop new problem-solving methods and make the most of technological advancements.
What is the talent management process?
The talent management process is about finding the right people and helping them discover and apply their strengths so they can work and lead more effectively. Employers who do this well typically follow these steps:
Source candidates outside or inside the organization using the most appropriate method, i.e. employee referrals, social media, job boards, etc.
- To hire
Use analysis tools, screening questionnaires, skills tests and interviews to narrow down the list of candidates and make an offer.
Make learning and development resources accessible and tailored to employees’ expectations and needs so they can do their jobs more effectively.
- To hire
Keep teams connected and focused with engagement tools that help identify potential retention risks and retain the best.
- Carry out
Monitor employee performance and collect data to make more informed decisions.
- To acknowledge
Manage compensation fairly and reward the best.
Create succession plans that allow employees to advance their careers as positions become available.
The talent management model
ADP recognizes the pillars of a successful talent strategy:
Talent management strategy
Organizations today recognize the need for a mature talent management strategy that not only aligns with business goals, but also drives results. Here are some examples:
- Make corporate culture a top priority
When employees are happy and feel like they belong, they contribute more and stay in their jobs longer.
- Offer many growth opportunities
With very rare exceptions, employees will leave their jobs unless they have visibility into their career progression options and the proper support to pursue them.
- Ensure employees use their strengths
Understanding what each employee brings to the table and matching individuals to the roles and assignments where they can contribute the most helps improve engagement and effectiveness.
- Pay workers fairly
Having accurate, real-time benchmarks of compensation data specific to their industry and geographic region is essential for employers if they want to attract and retain in-demand talent.
- Hire diverse talent
By providing broader perspectives and new approaches, diversity can improve problem-solving and shows that an organization represents the community it serves.
Talent management planning and best practices
No matter where they are in their talent journey, employers can connect people and work better by following these tips:
- Make decisions based on data
Having reliable, accurate and timely data helps employers implement strategic talent initiatives, such as pay equity or workforce diversity, with confidence.
- rely on technology
Talent management systems make it easy to find talent, assess skills and qualifications, onboard new hires, manage employee strengths, and recognize and reward the best.
- Outsource payroll and HR
Relieved of administrative tasks, business leaders have more time to focus on their goal of becoming an employer of choice. Some HR outsourcing providers can also help with talent recruitment and strategy.
Talent Management Frequently Asked Questions
What is the other word for talent management?
Other words used to describe talent management are personnel management and human resource management, although there are nuances between the three terms.
What is the difference between talent management and talent acquisition?
Talent management deals with engagement and development throughout the employee lifecycle, from hire to retirement. Talent acquisition is the part of this process that focuses specifically on recruiting.
What is the difference between talent management and HR?
Talent management is usually an HR responsibility. It tends to be more strategic than tactical or transactional HR tasks, such as reporting or communicating with employees.
What is a Talent Management Framework?
A talent management framework is the blueprint for how an organization will execute its talent strategy. This typically includes recruitment, hiring, engagement, development, performance management, recognition and succession planning.
What is a talent management system?
A talent management system is software that streamlines talent management processes. Features vary by vendor, but many solutions can help create job postings, onboard new hires, track employee performance, and more.
What is the most important aspect of talent management?
No talent management strategy will be successful if it does not meet the real expectations and needs of employees. If an organization’s talent strategy falls flat, this is an indication of employer-employee disconnect.
This article is intended to be used as a starting point in analyzing talent management and is not a comprehensive requirements resource. It offers practical information on the subject and is provided with the understanding that ADP does not provide legal or tax advice or other professional services.