What is talent management?
Talent managementis a holistic method of recruiting, hiring, and engaging high-performing people to achieve company objectives. An offshoot of HR management, talent management offers a strategic, integrated approach to attracting quality professionals and optimizing their competencies.
Talent management evolution
HR influencer Josh Bersin explains the evolution of talent management. Known as the Personnel Department in the 1970s, it focused on the rudimentary functions of hiring, paying, and offering basic benefits. In the 1990s, the department transformed into a more strategic form of HR, aiming to attract and engage desirable professionals. In 1997, McKinsey & Company coined the term “talent management.”
What does talent management involve?
Today, talent management strives to increase efficiency and productivity by sharpening its strategies and blending HR processes with business functions. Talent management encompasses:
- Sourcing and recruiting
- Succession planning
- Performance management
- Learning and development
- Compensation and benefits
Why talent management is important
Talent management enables HR leaders and managers to nurture a stellar workforce to promote and strengthen company performance. Effective talent management contributes to:
HR professionals are the leaders of the talent management process. HR advisor Sharlyn Lauby explains that HR leaders can develop a valuable strategy by studying the company’s industry, business processes, and workforce practices. As stakeholders in the business, it’s HR’s responsibility to ensure the company’s talent management strategy aligns with business strategy.
Talent management best practices
Developing and maintaining talent management is a continuous process. HR practitioners can integrate these practices to fuel a robust, dynamic, and agile talent management system:
- Develop a strategy. Align talent management with the company’s mission, vision, objectives, and business strategy to provide strategic direction. A key part of this is determining the competencies and roles necessary to drive company objectives and identifying methods to recruit, hire, and engage people.
- Invest in people’s growth. A learning and development program can provide team members with the resources they need to continue their upward journey and drive business achievements. Developing people’s competencies enhances their careers and promotes engagement and retention. Investing in managers is also beneficial, as they can leverage their crucial roles to coach team members, inspire engagement, and spur motivation.
- Build a positive culture. HR leaders can encourage a thriving work culture by incorporating a welcoming onboarding program, regularly recognizing people’s achievements, and offering attractive employee development opportunities. Increasing support, learning, and gratitude at work can nurture a healthy work community.
- Make data-driven decisions. Using key HR metrics to make educated decisions can support effective recruitment, increase retention, and boost engagement. Additionally, the heads of HR and the CFO should collaborate—combining talent management metrics with finance data can provide powerful insights into developing better talent management practices.
Global talent management challenges
Multi-national organizations have to develop HR talent management strategies that are effective throughout their branches around the world.
Global talent management presents a unique set of challenges. In particular, multi-national organizations have to navigate the diverse cultural landscapes where their businesses operate. Managing a globally dispersed team requires a deep understanding of cultural nuances, communication styles, work preferences, and aspirations.
Additionally, HR leaders who manage global talent will have to ensure HR processes are compliant with each country’s regulations.
In the wake of the Great Resignation, the competition for attracting and retaining talented professionals has become even fiercer. While recruiting globally provides a larger talent pool to choose from, the competition for top talent is present around the world, making talent acquisition and retention a formidable challenge.
Although these challenges are unique to global talent management, the solution remains the same: implementing strategies that take care of people and help them perform at their best. Nevertheless, how HR leaders apply a talent management program in each cultural context may vary.
How does talent management improve company culture?
A robust talent management system provides fertile soil for a healthy company culture to grow and flourish. Developing a strategic talent management system is key to nurturing high performance, job satisfaction, and employee wellbeing. When your people are happy, they’re more likely to infuse the company culture with enthusiasm and motivation, leading to a flourishing community of engaged individuals.
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Talent management trends
Several modern trends are shaping the way organizations attract, nurture, and retain their people. Staying attuned to these trends is crucial for organizations seeking to navigate the realm of talent management successfully.
Chief among them is the increasing importance of employee experience. As the workforce seeks meaningful and fulfilling work, organizations are focusing on creating environments that prioritize wellbeing, growth opportunities, and a positive workplace culture.
In the aftermath of the pandemic, this also coincides with the rise in remote and hybrid work. Companies are adapting to the changing expectations of team members, providing the flexibility to work from anywhere and creating new initiatives that contribute to maintaining productivity and collaboration, despite these changes. Offering flexible work styles is also key to attracting and retaining top talent.
Talent analytics is also gaining prominence, offering insights into people’s performance, engagement, and potential areas for development. This analytical approach enables organizations to make data-driven decisions about talent acquisition, training, and succession planning.
Additionally, diversity, equity, and inclusion are now integral to talent management and recruiting professionals, especially from the younger generations. Organizations are recognizing the value of diverse perspectives among their teams and are fostering inclusive workplaces to drive innovation and workplace satisfaction.
Talent management and HR tech
HR tech offers efficient talent management tools that affect every stage of the employee lifecycle. These solutions include:
- Talent management systems. A talent management system provides HR professionals with the tools to address the different aspects of the talent management cycle in one place—from recruitment to offboarding.
- Applicant tracking systems. An ATS makes the hiring process more efficient, allowing recruiters to identify and attract top talent swiftly.
- Performance management platforms. These platforms use data analytics to provide real-time insights into people’s performance, facilitating continuous feedback and development.
- Learning management systems. An LMS provides opportunities for team members to train and upskill, aligning individual ambitions for growth with organizational objectives.
- Employee experience platforms. An employee experience platform gives HR leaders the tools to create a positive workplace culture with happy people.
- Artificial intelligence. AI is now playing a central role in HR tech, from predicting candidate success to identifying patterns for retention.
As organizations increasingly embrace digital transformation, the relationship between talent management and HR tech is pivotal in cultivating a dynamic and agile workforce that drives success.