Because people are the heart of any organization, having a strategy in place to attract, engage, and retain talent is key to long-term business success. An effective talent management strategy requires careful planning, is constantly evolving, and takes into consideration overall business goals as well as the latest workforce trends.
While every company has a unique talent management strategy, many of the foundational elements are the same no matter the business size or industry.
Table of contents:
- What is a talent management strategy?
- What to consider before creating your strategy
- Creating a talent management strategy
- The importance of a talent management strategy
What is a talent management strategy?
A talent management strategy is a proactive, adaptable process to manage an organization’s workers—including attracting candidates, optimizing performance among team members, planning for succession when individuals transition roles or leave the organization, and addressing everything in between.
Key components of a talent management strategy include:
- Strategic workforce planning. A successful talent management strategy starts with understanding your current workforce and outlining how to meet current and future staffing needs. Aligning this planning to overall business objectives is key to success.
- Talent acquisition and retention. Hiring and retaining top workers is central to any talent management strategy, but it can be challenging in today’s competitive job market. Research from The Conference Board found that talent attraction and retention is the No. 1 focus for CEOs across the globe in 2023.
- Career development. Throughout team members’ time with the company, your organization can offer development resources such as standardized onboarding and training, overview of career paths across the organization, on-demand courses, stipends for professional development events, and more.
- Performance management. This piece of the talent management focuses on helping team members achieve goals and improve in their roles. It includes steps such as feedback, performance reviews, and coaching sessions.
- Compensation and benefits. Compensating all workers fairly—and competitively—can help your organization attract and retain top talent. In addition to salary and wages, top companies offer team members a comprehensive list of benefits.
- Succession planning. This process involves supporting workers as they transition in their careers, whether they get promoted, move to a different team, or leave the company. It also means having a plan in place to fill roles when team members transition.
What to consider before creating your strategy
With the exception of sole proprietorships, every organization needs to bring on talent to help achieve business goals. However, research from The Predictive Index found that only 38% of executives surveyed have a talent strategy in place, a drop from 55% in 2021.
Developing and implementing a proactive talent management strategy helps support better worker experiences and contributes to business success as a result.
Whether you’re creating a defined talent management strategy for the first time or improving the one you have in place, develop a list of questions that should be addressed to drive success.
Questions can include, but are not limited to:
- What are the overall business objectives?
- Which roles or skills are required to achieve business objectives?
- What’s currently working with the strategy and what can be improved?
- Which areas or steps should be prioritized?
- How will the company’s workers benefit from improved talent management?
- How will the business benefit?
- What are the 30-, 60-, and 90-day goals of the strategy?
How will success be measured?
Creating a talent management strategy
Maintaining a strong talent management strategy requires thoughtful planning and is an ongoing process because any organization can always identify areas for improvement.
1. Understand overall business objectives
Gartner research shows that 70% of CEOs expect chief human resources officers (CHROs) to be key players in enterprise strategy. HR leaders can achieve this by aligning talent management strategy with broader business objectives. However, according to a survey from The Predictive Index, only 31% of executives believe their business and talent strategies are completely aligned.
Fostering this alignment starts by completing an in-depth analysis of your organization’s strategic and operational goals and objectives. Based on the results of this analysis, the HR team can partner with business leaders across the organization to outline how organizational priorities impact talent management strategy and planning.
By integrating the talent management strategy into overall business strategy, your organization can increase agility and be better prepared for any disruption that may come your way.
2. Take inventory of team member skills and skill gaps
As you map out the team you need to scale your business, make a list of the skills your organization needs to tap into to achieve business goals, along with any skill gaps you currently have.
When you create a skills inventory, include both hard and soft skills. Hard skills are job-specific, technical, measurable competencies such as coding, search engine optimization, or business analytics. Soft skills are self-developed traits that help individuals work well in a team, including communication, time management, and critical thinking.
Once you identify a list of skills needed, think about which skills require full-time, in-house workers and which might be required for project-based work, possibly using independent professionals.
3. Tap into outside expertise
A survey from Gartner found that a poor talent strategy is the No. 1 risk organizations face, with 78% of executives concerned about failing to meet worker expectations in 2022. To implement the best possible strategy, partnering with an independent talent management expert can be helpful.
An independent talent management professional will offer a fresh perspective on your strategy and share best practices they’ve learned through their experiences with other clients.
Engaging an independent professional also offers the flexibility for you to engage the expert as needed while you develop your talent management strategy, without needing to hire a full-time team member. This approach drives cost savings and can help you access the right expert within a matter of days, without having to complete a lengthy, traditional hiring process.
4. Write out the goals and priorities of the strategy
A core piece of your talent management strategy is setting actionable goals. Start by discussing overall short- and long-term talent management objectives and align key goals and priorities with overall business needs.
Before implementing goals, gain approval from key decision makers. If you’re not aligned on the goals of your talent management strategy—especially among business leaders across the organization—you may experience challenges with measuring success down the road.
Goals can include:
- Reduce hiring time and costs
- Automate administrative tasks
- Improve worker engagement score
- Increase worker retention
When you set goals, make them measurable, when possible, so you can track progress. Examples of quantifiable goals can include increasing worker retention by 5% or reducing hiring time by two weeks.
5. Implement technology to improve efficiency
Investment in talent management and HR technology is on the rise. Survey results from Sapient Insights Research Group show that HR technology spending increased 57% in 2021, after declining briefly at the height of the global pandemic.
Whether your organization is looking to speed up hiring, standardize onboarding, improve collaboration, measure team member engagement, or achieve other talent management goals, technology can help reduce costs and drive efficiency.
Here are a few examples of talent management technology:
- Applicant tracking system
- Payroll and benefits platform
- Engagement survey software
- Team collaboration tools
- Project management trackers
As part of the selection process, compare different talent management technology partners and vendors based on capabilities, customer reviews, implementation timeline, cost, and other key criteria. This will help ensure you choose the right solutions to best meet your talent management needs.
6. Track and analyze key metrics
Research from PwC found that the top challenge for HR leaders in 2022 is access to HR insights and data analytics. And a survey of business executives from Tableau and IDC found that 83% of CEOs want their companies to be more data-driven.
Understanding your talent management strategy’s strengths and areas for improvement can help you identify new ways to make your strategy more impactful. Regularly tracking metrics can also help your HR team provide your CEO and other executives across the business with insights into overall talent management strategy performance.
Metrics you can track include:
- Time and cost to hire
- Training and career development spend
- Worker satisfaction and engagement
- HR software utilization
- Individual performance
- Overall business performance
In addition to quantitative metrics, consider team members’ qualitative feedback when evaluating your talent management strategy. For example, your organization can leverage hiring process feedback, engagement survey data, and exit interview responses to improve talent-related processes and overall strategy.
7. Identify ways to improve company culture
Company culture refers to shared mission, values, goals, behaviors, and practices at an organization. According to a global survey from PwC, 66% of C-suite executives and board members believe culture is more important to performance than the organization’s strategy or operating model.
When building your talent management strategy, company culture should always be a focus. By prioritizing culture as part of your strategy, your mission and values can guide everyday decisions and actions.
Here are a few actions your business can take to improve culture:
- Hire team members who are motivated by your culture
- Listen to and act on worker feedback
- Communicate transparently
- Recognize employees for their work
- Encourage career development opportunities
- Support workplace flexibility
The importance of a talent management strategy
Implementing a talent management strategy and continuously identifying ways to improve it offers businesses many benefits. Engaging, developing, and retaining a team of qualified workers is critical to business success. On the other hand, lack of a defined strategy can lead to challenges such as difficulty attracting talent, lack of team member engagement, and dissatisfied customers.
Top benefits of an effective talent management strategy include:
- Improved recruiting and hiring. Top job seekers are highly selective about their career opportunities and are often hired out of the job market quickly. By building a strong employer brand and identifying ways to make the hiring process more efficient, your organization can engage quality candidates before they receive competing job offers.
- Streamlined onboarding experience. Other than any interactions during the hiring process, onboarding is a company’s only chance to make a positive first impression with new team members. Prioritizing standardized onboarding in your talent management strategy can help new team members feel a sense of belonging and start driving positive outcomes for the company sooner rather than later.
- Engaged team members and managers. With an effective talent management strategy, your organization can leverage team member feedback to understand what drives engagement and what might cause burnout and other frustrations. Based on this information, you can focus on continuously improving the worker experience, driving engagement as a result.
- Defined career development opportunities. A key way to engage workers is by offering opportunities for learning and growth. Setting aside budget in your talent management strategy for career development resources can help team members expand their skills sets, which will also help your organization fill skill gaps with team members you already have on board.
- Increased diversity. A successful talent management strategy incorporates practices to attract a more diverse workforce. Practices can include writing inclusive job descriptions, focusing on value-based hiring, posting roles on niche job boards, and hiring a diverse leadership team.
- Stronger business outcomes. Having the workers and skills you need in place in your organization and a strategy to develop and retain talent can have a direct positive impact on your progress toward achieving business goals.
Get expert help to create your strategy
Your talent management strategy is central to successfully scaling your business. Embracing outside expertise from an independent talent management professional can save your HR team time, reduce operational costs, and support business agility.
After gauging whether individuals’ skills will be the right fit for your team, recruiters deliver a hand-selected shortlist to you. Through Upwork, you can use built-in collaboration tools to seamlessly schedule interviews and extend offers.
Learn more about Upwork and get started today.
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