The Importance of Talent Management

Your team members play an integral role in the overall success of your business. Effective talent management is a necessity to ensure your organization has the right people in place to grow and thrive.

Whether you’re looking to build a talent management strategy from the ground up, or to optimize what you already have in place, understanding talent management at a high level can help you develop a successful strategy.

What is talent management?

Talent management encompasses the strategies, processes, and tools an organization uses to attract, engage, onboard, develop, and retain workers. People are the heart of any company and significantly contribute to organizational culture, team collaboration, productivity, revenue growth, customer satisfaction, and other critical areas of the business. Because of this, talent management is essential to achieving long-term strategic business objectives.

Elements of talent management include, but aren’t limited to:

• Strategic workforce planning
• Recruitment and talent acquisition
• Hiring
• Onboarding
• Engagement and retention
• Training and development
• Performance management
• Compensation and benefits
• Data analysis
• Succession planning

The individuals responsible for talent management vary depending on a company’s size and organizational structure. While a business owner at a small company may oversee talent management before resources are available for a dedicated team, larger businesses usually have extensive talent management and human resources teams in place. These teams may include human resources generalists, recruiters, talent acquisition managers, and learning and development specialists, among others.

No matter the size of the organization, aligning the talent management strategy with overall business goals and leadership expectations across the company is a key to success.

7 ways effective talent management impacts your business

A Gartner survey of 400 senior business leaders found that, among respondents, workforce issues such as hiring and retention are a top business priority for 2023. An organization’s talent management strategy can significantly impact overall business success.

A strategic, proactive approach to talent management can help any company more effectively attract and engage talent with the skills needed to grow and scale, among other impacts.

1. Attract the most qualified talent

A comprehensive talent management plan includes an engaging employer brand and innovative strategies to attract top talent. By telling a compelling brand story through channels where prospective team members interact with your brand, your organization can capture the attention of qualified individuals who are motivated to help your company succeed.

On the other hand, if your organization’s talent management strategy lacks a focus on branding and what your team has to offer prospective workers, you may struggle to attract top talent—especially in today's competitive landscape.

Consider highlighting your brand across channels including job descriptions, your company careers page, social media content, and worker review sites, among others.

Information to highlight when promoting your brand may include:

• The business mission, vision, and values
• Company awards, accolades, and worker success stories
• Remote and flexible work options
• Career paths and talent development opportunities
• Corporate social responsibility and community service initiatives
• Details on the company’s commitment to diversity, equity, and inclusion (DEI)

2. Streamline recruitment, hiring, and onboarding

A seamless process for evaluating, engaging, and ramping up new team members is critical to the success of any talent management strategy.

According to a report from Greenhouse, 58% of job seekers surveyed expect to hear back from companies in a week or less regarding their initial application.The report found that 60% believe companies can and should improve the recruitment experience. If steps along the way are time-consuming or disorganized for prospective team members, they may abandon the process and look for work elsewhere.

In the absence of an effective process, filling open roles and skills gaps also takes organizations longer, which can pose risks such as declining productivity, burdening existing team members, and frustrating customers.

To streamline recruitment, hiring, and onboarding, implement a standardized process and leverage tools to automate specific steps that may take time to complete manually.

Some ways your team can simplify or automate steps include:

• Using candidate sourcing tools
• Embracing alternative staffing solutions including independent talent
• Simplifying the application process with AI-enabled recruiting assistants
• Encouraging mobile applications with QR codes
• Centralizing applications or proposals using an applicant tracking system
• Automating initial screening with talent assessment tools
• Implementing interview scheduling software
• Creating an interview scorecard to assess all candidates on an objective scale
• Initiating onboarding using digital paperwork once an offer is accepted  

3. Develop workers to address skills gaps

Encouraging workers to learn and develop their skills is an ongoing process that continues well beyond onboarding. Organizations with successful talent management strategies offer a wide range of talent development resources to workers throughout their time with the company.

Development resources may include an overview of career paths across the organization, stipends for professional development events, performance reviews or coaching sessions, and access to on-demand courses, learning resources, and assessments.

Encouraging workers to set aside time for development can help keep team members engaged, while also ensuring their skills remain relevant as the world of work evolves. A strategic approach to talent development also helps organizations more efficiently fill skills gaps as business priorities and customer expectations shift. Research from TalentLMS and the Society for Human Resources Management (SHRM) found that, of the HR managers surveyed, more than one in two said their companies are facing a skills gap, and half of them are addressing it by training existing employees.

One thing to note is that formal development resources and performance reviews are intended for in-house team members, while independent professionals receive feedback based on completed milestones and projects.

4. Improve team member engagement and retention

When an organization has a proactive strategy in place to attract qualified workers whose values are aligned with the company’s, team members are more likely to be engaged and motivated. This will help drive positive business outcomes. In fact, McKinsey research shows that 70% of workers surveyed strongly believe their sense of purpose is defined by their work, meaning individuals want to work for companies with values and a mission they believe in.

Similar to talent development, worker engagement is an ongoing process. If workers feel disengaged, they may look for opportunities elsewhere, leading to a decline in worker retention.

Consider the following actions to show team members that they’re appreciated and to help drive engagement:

• Distribute engagement surveys and address feedback
• Recognize team members for their contributions
• Encourage managers to schedule one-on-one discussions with each team member
• Provide training and coaching opportunities
• Offer remote and flexible work options
• Host departmental or company-wide meetings with opportunities for team members to ask questions
• Decrease meeting times and encourage asynchronous communication

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5. Increase customer satisfaction and loyalty

A team of engaged, passionate workers can have a direct, positive impact on a company’s ability to drive customer satisfaction and loyalty. According to global research from IDC, 85% of respondents agree that an improved worker experience and higher engagement translate to a better customer experience, higher customer satisfaction, and higher revenue for their organization.

When workers are engaged and satisfied, they are more likely to go above and beyond to establish trust, build relationships, and ensure customer satisfaction. They’re also more motivated to encourage product and feature adoption and identify ways to increase revenue by identifying customer upsell and renewal opportunities. Additionally, when you have a team of skilled workers, your business can be in a better position to quickly answer customer questions and resolve problems.

If your organization is short staffed or workers are disengaged due to an inefficient talent management strategy, it may lead to a frustrating experience. This can have a negative impact on customer satisfaction and loyalty, as a report from Zendesk found that 61% of individuals surveyed would take their business to a competitor after one negative customer experience with a company.

6. Drive efficiency and cost savings

When an organization streamlines talent management processes and builds a team of qualified, motivated workers, the business can improve efficiency and reduce operational costs. And given high inflation and talk of a possible recession, optimizing costs is a top priority among HR, talent management, and business leaders.  

To maximize efficiency and cost savings, consider regularly tracking and analyzing metrics related to your talent management efforts. Doing so can help your company make data-driven decisions by helping you to identify trends and areas for improvement, and to understand what’s working. Embracing data also helps talent management teams offer business leaders transparent insight into overall performance.

Some metrics to track include:

• Total time to fill open roles or projects
• Time spent in each hiring step
• Total cost per hire
• Cost per talent sourcing channel
• Worker retention and turnover rates
• Team member satisfaction and engagement
• Training and career development spend
• Talent management software investment, utilization, and ROI
• Individual and departmental performance
• Overall business performance

7. Support workforce and business agility

Between the global pandemic, The Great Resignation, and worries of an impending recession, in recent years HR and talent leaders have had to adapt quickly to significant shifts in the talent market. No matter the economic conditions, if your organization has a proactive, measurable talent management strategy—with room to evolve and adapt as needed—you can be better positioned to respond to disruption and support business agility.

Forward-thinking companies are incorporating innovative solutions into their talent management efforts to support workforce agility. For example, instead of exclusively relying on full-time, in-house workers, organizations are also embracing remote work and tapping into the skills of independent professionals.

With independent talent, your organization can access skilled professionals quickly and create a variable cost for talent, compared to the traditional fixed cost for full-time workers. This can help you more efficiently fill skill gaps and scale your team up and down as needed. According to our 2022 Future Workforce Report, 85% of hiring managers surveyed who leverage independent talent say they are confident in their company’s ability to respond to disruption, compared to 69% of those who do not use independent talent.

Find qualified talent for your team

Developing, implementing, and continually improving a successful talent management strategy requires thoughtful planning and consideration, but it doesn’t have to be complicated.

Consider engaging an independent talent management professional from Upwork to maximize the impact of your talent management strategy. You can use Project Catalog™ to search fixed-priced projects and one-on-one consultations to find a talent management expert whose skills and expertise align with your goals and budget.

Also access talent with more than 10,000 skills on Upwork to fill skills gaps, support workforce agility, and reduce operational costs as part of your broader talent management strategy. Get started—search for skilled independent professionals today.