Talent Management: What It Is and Why It’s Important

A widening skills gap, low unemployment rates and rapid innovation have pushed the business landscape into a “war on talent,” with companies scouring the workforce for skilled employees. One of the best ways to fill organizational gaps is effective talent management.

What is Talent Management?

Talent management encompasses the human resources (HR) processes overseeing the employee experience from end-to-end: attracting talent, developing talent, motivating employees and retaining high-performers. Driving all these practices is the goal of increasing performance, beginning with an effective onboarding process, reinvigorating and motivating tenured employees, and effectively retaining top performers.

HR, Talent Acquisition and Talent Management

Lumping all HR activities into a single bucket may be commonplace, but it’s an inaccurate reflection of the relationship that exists between these specialized HR disciplines, according to Workable. First, defining “talent” is important, given the subjective nature of the term. In this case, talent is any employee with skills and values that meet an organizational need.

A strong HR department provides the necessary foundation for strategic talent management and talent acquisition, by ensuring the foundation is established for onboarding, training and reviewing employees. HR also creates the policies that govern training and promotion. When HR departments and talent teams work seamlessly together, they can establish a strategy for the business needs and proactively plan for existing and future needs.

Talent management professionals are responsible for managing the existing talent at a company, including:

• Providing employee training programs
• Coaching high-performing employees
• Establishing hiring and succession plans
• Mentoring, incentivizing and promoting employees
• Motivating employees and keeping morale high
• Providing engagement through career pathing options
• Identifying internal candidates for future or existing opportunities within the organization

Talent acquisition professions build the incoming pipeline talent for organizations, including:

• Establishing a company brand that attracts quality candidates
• Proactively sourcing applicants for both current and future needs
• Creating and maintaining relationships with previous candidates for future needs
• Strategically sourcing diverse talent

Why is Talent Management Important?

Talent management isn’t just important – it’s critical. Effective talent management can help organizations maintain a competitive advantage, and may even boost shareholder returns. In a recent Pulse of the Profession Study, 69% of high-performing organizations had talent management strategies in place compared to just 31% of low performers. Talent management also tends to have a snowball effect: promoting employee job satisfaction and retention makes your organization more attractive to future candidates as well. 

Talent Management Practices

Organizations can implement a wide variety of talent management practices to boost talent, including:

1. Begin with your brand. A strong brand, where people want to work, is attractive to high-quality candidates.
2. Manage your reputation. Although brand and reputation often go hand-in-hand, reputation is less in the organization’s control, as outside factors – like economic ones – can influence this factor. As part of this, a candidate’s experience with your organization can also affect this. (Think of all those anonymous reviews on Glassdoor.com, for example).
3. Encourage referrals. Outstanding employees know what makes them successful, and they can recommend others with similar skill sets.
4. Refine your selection process. Ensure your organization has a clear method to identify and select skilled candidates.
5. Craft accurate, insightful job descriptions. To reduce an influx of underqualified or poor-fit candidates, ensure the job description clearly outlines what is expected and required.
6. Develop valuable onboarding. Once your organization has talent in the door, it’s important to have them functioning as quickly as possible. Helping new hires become productive more quickly can support retention and engagement.
7. Provide training with promotions. Sometimes called inboarding, this process ensures promoted employees receive the training they need for their new role.
8. Practice succession planning. Organizations should have plans in motion to replace top talent, including identifying a pipeline of talent professionals who could step into critical roles.
9. Commit to continuous learning and development. Continue to invest in your workforce through ongoing learning and development programs. Not only does this refine your people, but it can also improve their engagement and prolong retention.
10. Establish clear career paths. Employees like to feel they have room to grow – and options to do so. Maintain a view of all organizational talent among the leadership team and strive to hire internally when possible.
11. Manage performance. Track employee performance and provide feedback and goals regularly to improve performance.
12. Apply HR Analytics. HR professionals can establish key performance indicators (KPIs) and monitor performance against those benchmarks by applying HR data.

Integrating Talent Management

Talent management should be a strategic value and plan within the organization – and the responsibility for talent management isn’t limited just to HR professionals. Instead, every member of the organization, particularly leadership with reporting staff, should participate in talent management. Leaders must understand and appreciate the value of talent management programs, and be held accountable for implementation. Organizations should maintain updated knowledge on top talent across departments, and track and manage career opportunities for employees.